Everything You Need to Know About the Australia Modern Slavery Act

What is the Australia Modern Slavery Act?

The Australia Modern Slavery Act, formally known as Modern Slavery Act 2018, is a disclosure-based statute that predates the Uyghur Forced Labor Prevention Act (UFLPA). Enacted January 1, 2019, the law requires business entities to report on their potential exposure to forced labor, also known as modern slavery, as well as steps they’ve taken to assess and address those risks. Australia’s definition of modern slavery includes slavery, servitude, child labour, forced labor, human trafficking, debt bondage, slavery like practices, forced marriage, and deceptive recruiting for labour or services.

Although the Australia Modern Slavery Act currently applies to all entities conducting business in Australia and generating a consolidated worldwide revenue of more than $100 million Australian dollars, that threshold may be reduced to $50 million as part of a set of proposed changes. Authorities may also introduce a due diligence obligation, along with civil penalties for non-compliance. The act also empowers the Anti-slavery Commissioner, the NSW Procurement Board and Auditor-General to oversee efforts to remove products of modern slavery from public procurement.

Businesses must describe the risk of modern slavery and the actions taken in the reporting year. Joint statements are permitted for corporate groups, but all reporting entities need to be consulted to prepare the statement. The reporting criteria outlined in the Australia Modern Slavery Act are:

1. The identity of the reporting entity;
2. The structure, operations and supply chains of the reporting entity;
3. The risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls;
4. The actions taken by the reporting entity and any entity that the reporting entity owns or controls, to assess and address those risks;
5. How the reporting entity assesses the effectiveness of such actions;
6. The process of consultation with any entities the reporting entity owns or controls or is issuing a joint modern slavery statement with; and
7. Any other information that the reporting entity, or the entity giving the statement, considers relevant.

Why is this law important?

Stopping forced labor and modern slavery has become an increasingly important international priority. The Australia Modern Slavery Act has been around since 2018, but with the passing of the UFLPA in 2021 the world’s focus has turned to forced labor, particularly in the Xinjiang Uyghur Autonomous Region (XUAR) of China. 

Since 2017, some 1.8 million people have been subject to political indoctrination, forced labor, physical violence, forcible drug intake, sexual abuse, and torture at the hands of the Chinese national government. Chinese authorities have been relocating and detaining Uyghurs en masse in purportedly abolished “re-education through labor” (RTL) facilities. Those who remain outside these camps suffer discriminatory surveillance technologies and coercion through “arbitrary administrative and criminal provisions,” many of which aim to curb Uyghur birth rates. In January 2021, China’s treatment of ethnic minorities in Xinjiang had officially been declared a genocide by the U.S. Secretary of State. The UFLPA has received an immense amount of funding as it represents a political determination on behalf of the United States to acknowledge and deter the use of Uyghur forced labor.

As forced labor becomes an increasingly high-profile compliance challenge for multinational corporations, compliance teams are working to meet regulatory requirements not only for the UFLPA and the Australia Modern Slavery Act, but also for sister regulations like the Canadian Modern Slavery Act, German Supply Chain Due Diligence Act, EU Forced Labor Ban, and others.

>> Download our cheat sheet to learn all about the global forced labor laws <<