Australia Proposes Modern Slavery Reporting Requirements For Multinationals – An Overview And Comparison To Existing Corporate Modern Slavery Disclosure Legislation

The Australian Government has released a consultation paper proposing the adoption of legislation that would require many multinationals operating in Australia to publicly report on modern slavery risk in their business and supply chains and their related compliance practices. "Modern slavery" includes human trafficking, slavery and slavery-like practices such as servitude, forced labor and debt bondage, which have been found to exist to varying degrees in many supply chains across a large number of countries. If adopted, Australia would join the United Kingdom and California in adopting similar reporting requirements. In this Alert, we discuss the proposed legislation and provide a comparison to the UK and California modern slavery reporting requirements.

The Proliferation of Corporate Modern Slavery and Related Legislation

Over the last several years, legislation addressing corporate responsibility for modern slavery has been adopted in several jurisdictions. California was first out of the gate when it adopted the California Transparency in Supply Chains Act, requiring companies to make disclosures concerning their efforts to address modern slavery. This Act took effect in 2012. The UK Modern Slavery Act, which was based on the California Act, was adopted in 2015 and required disclosures beginning last year. The U.S. Federal Acquisition Regulation anti-human trafficking provisions, which among other things require U.S. federal contractors to put in place specified compliance procedures, also were adopted in 2015. And last year saw the repeal of the consumptive demand exception under the U.S. Tariff Act.

This year has been especially active for corporate human rights legislation. Early in the year, France adopted a corporate duty of vigilance law that requires large French companies to take steps to identify and prevent serious human rights impacts, which would include modern slavery, in their supply chains. At around the same time, the Dutch Parliament adopted child labor due diligence legislation, which is awaiting Senate approval. In addition, the Welsh Government released a Code of Practice for Ethical Employment in Supply Chains that businesses involved in Welsh public sector supply chains are expected to sign on to. Next year, many EU companies will begin making disclosures under the EU non-financial reporting directive, which for some companies are expected to include modern slavery-related disclosures.

Shifting over to Australia, corporate human rights legislation has been under discussion for some time. In 2013, a Parliamentary committee recommended that the Australian Government adopt legislation to improve supply chain transparency. In 2016, a multi-stakeholder working group convened by the Government recommended that it consider adopting a modern slavery reporting requirement. Last month, on August 16, the Commonwealth Minister for Justice announced the Australian Government's proposal to enact an Australian Modern Slavery in Supply Chains Reporting Requirement and released a Consultation Paper outlining the proposed regulation. That Paper and the public consultation process are discussed below.

The Proposed Regulation

Definition of Modern Slavery. "Modern slavery" will encompass slavery, servitude, forced labor, debt bondage and deceptive recruiting for labor or services. The Australian Government proposes that the definition incorporate conduct that would constitute a relevant offense under existing human trafficking, slavery and slavery-like offense provisions contained in the Commonwealth Criminal Code. The definition will exclude practices...