Update from down under: understanding upcoming changes to Australia’s Modern Slavery Act 2018

Home » Update from down under: understanding upcoming changes to Australia’s Modern Slavery Act 2018

Australian companies need to be aware of pending changes to the Modern Slavery Act 2018 (Cth) and start preparing for more scrutiny as part of their ESG reporting.

The 2022 Global Estimates of Modern Slavery stated that close to 27 million people are subject to some form of modern slavery, with more than 15.1 million people in the Asia-Pacific region considered ‘enslaved.’ Those in Asia-Pacific amount to almost 55% of all enslaved people around the world.

In August this year, the Australian Government released an issues paper on the effectiveness of the Act for public consultation. Public debate closed in November and the recommendations will be published in March 2023. The Albanese government has pledged in 2023 it will significantly enhance the Act and meaningfully extend its reach.

Key proposed changes include:

  1. Introducing mandatory due diligence obligations, including supply chain certification.
  2. Significantly lowering the reporting threshold (currently at AUD 100 million in annual consolidated revenue).
  3. Expanding the basis of reporting.
  4. Introducing financial penalties for non-compliance.
  5. Defining the role, function, and powers of the proposed Anti-Slavery Commissioner.

What will it mean for Australian companies in Thailand?

If you are an Australian company based in Thailand, you may have already been subject to a supply chain review. Your own review obligations under S 16(1)(d) of the Act means you simply have to describe the “due diligence and remediation processes,” not report on compliance.

It’s likely the 2023 changes will move closer to the mandatory reporting required in Europe which means you will need to explain how you made certain that modern slavery is not happening in your specific industry or line of work. This means more Australian companies will need to annually review their supply chains and operations, and take action to manage any risks identified.

Currently anti-slavery statements are submitted to the Australian Border Force for publication on an online register.

Supply chain reviews are part of the general trend to enhanced ESG statements. These reviews take time and resources, and travel restrictions in some neighboring countries make verification difficult. Nevertheless, Australian companies that think they will be impacted by the changes to the Act should start a verification process early. It’s not only the proposed financial penalties, but also the reputational and investor risk that needs to be considered.

Even if operating a small or medium Australian company, you will need to consider if you will be part of a review by your buyers or partners and get expert help early to develop your own compliance processes.

Silk Legal consists of associates who are highly experienced in matters related to Australian law. We have assisted numerous Australian businesses address matters related to both Thai and Australian compliance matters. If you require expert help on Australia Modern Slavery Act, please contact us via [email protected].


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