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Modern Slavery Bill 2018

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2016-2017-2018

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

SENATE

 

 

 

MODERN SLAVERY bill 2018

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

Amendments to be Moved on Behalf of the Government

 

 

(Circulated by authority of the Assistant Minister for Home Affairs,

Senator the Honourable Linda Reynolds)

                                                                                                        



 

Modern Slavery Bill 2018

 

OUTLINE

1.       The purpose of these amendments to the Modern Slavery Bill 2018 (‘the Bill’) is to improve the operation of the Bill by: establishing an appropriate mechanism to address non-compliance; strengthening Parliamentary oversight of the implementation of the Modern Slavery Reporting Requirement; and providing a clear pathway to future civil penalties if initial compliance rates are inadequate.

2.       The amendments will:   

·          empower the Minister to require suspected non-compliant entities to explain why they have not complied with the Modern Slavery Reporting Requirement and/or to undertake specified remedial action

·          require the Minister to report annually to the Parliament about the implementation of the Modern Slavery Act (‘the Act’), including compliance trends, and 

·          specifically require the three-year review of the legislation to consider the necessity and timing for future reviews and whether amendments are needed to include additional compliance mechanisms, such as civil penalties.  

3.       These amendments form part of the Australian Government response to the Senate Legal and Constitutional Affairs Legislation Committee’s report on the Bill of 24 August 2018.

4.       These amendments also ensure that the Modern Slavery Reporting Requirement will be subject to ongoing monitoring and evaluation. As international responses to modern slavery continue to evolve, it is important that the Modern Slavery Reporting Requirement remains consistent with international best practice and emerging trends.

 

Financial impact statement

5.        The amendments to the Bill have no financial impact on Government revenue.

 

Statement of compatibility with human rights

6.       The statement of compatibility with human rights for these amendments appears at the end of this explanatory memorandum.

 



 

AMENDMENTS TO THE MODERN SLAVERY BILL 2018

 

NOTES ON AMENDMENTS

 

Amendment 1                        Clause 11, page 10 (after line 13)

7.       Amendment 1 would amend the simplified outline of Part 2 of the Bill set out in section 11 to include information about the operation of new section 16A . The simplified outline is not intended to be comprehensive and readers should rely on the substantive provisions. For an explanation of the operation of section 16A, refer to amendment 2.

Amendment 2                        Page 13 (after line 27)

Section 16A: Explanations for failure to comply etc.

8.       Amendment 2 would insert a new section 16A into Part 2 of the Bill. Section 16A would empower the responsible Minister to give a written request to an entity to provide an explanation or undertake specified remedial action, where the Minister is reasonably satisfied that the entity has not complied with a requirement under section 13 or 14. If an entity does not comply with a Ministerial request, section 16A also provides that the Minister may publish the identity of the entity and other details. 

9.       Section 16A provides an appropriate mechanism to deal with suspected non-compliance with the Modern Slavery Reporting Requirement over the first three years of implementation. The Government expects that most cases of non-compliance over this period will be due to lack of awareness about the Modern Slavery Reporting Requirement or a lack of understanding about how to comply. In these instances, the strongest driver of compliance will be through dialogue and support for entities, rather than imposing punitive penalties.

10.   Section 16A also provides a mechanism to deal with serious cases of non-compliance by empowering the Minister to publicly identify entities that do not comply with a request made under this section. Publicly identifying a non-compliant entity is likely to cause reputational damage to that entity. This risk of reputational damage will incentivise compliance with the Modern Slavery Reporting Requirement. Importantly, section 16A provides that any decision by the Minister to publicly identify a non-compliant entity could be subject to merits review. 

Request for explanation or remedial action

11.   Subsection 16A(1) provides that the Minister may request an entity to explain why they have not complied with the Modern Slavery Reporting Requirement where the Minister is reasonably satisfied that the entity is non-compliant. Non-compliance involves a failure to comply with any of the requirements set out in section 13 or section 14, which deal with requirements to give Modern Slavery Statements. For example, this could include a failure to provide a Modern Slavery Statement within deadline, have the Modern Slavery Statement approved at board level and/or a failure to address each of the mandatory criteria set out in section 16.

12.   Subsection 16A(1) also provides that where the Minister is reasonably satisfied that an entity is non-compliant, the Minister may request that entity to undertake specified remedial action. The example clarifies that remedial action could include a requirement to give a Modern Slavery Statement to the Minister. Remedial action could also include revising a Modern Slavery Statement to address all of the requirements set out in section 13 or section 14.

13.   Subsection 16A(1) also requires that any request made under this section must be made in writing and must provide the entity with at least 28 days to respond. This minimum deadline ensures that the entity is aware of its obligations and has an appropriate time period to formulate a response and/or take remedial action.    

14.   Subsection 16A(2) enables the Minister to extend, or further extend, the deadline for response to a request made under subsection 16A(1) by providing written notice to the entity. An extension may be given at any time, including after an initial deadline for response has expired. The provision also does not limit the number of extensions that may be provided or the time periods for these extensions. It also does not limit an entity from applying for an extension of the deadline. However, it does not require the Minister to automatically grant all requests for extension made by an entity.   

15.   Subsection 16A(3) requires the Minister to include certain information in any written request made under subsection 16A(1). This information must include a statement of the effect of subsection 16A(2), which allows the Minister to extend the deadline for response to a request. This information must also include a statement of the effect of subsections 16A(4) to (6), which empower the Minister to publicly identify an entity that fails to comply with a request, and provide that any decision to identify an entity may be subject to merits review. These requirements ensure that the entity is made fully aware of the process for complying with the request, including the consequences for non-compliance with the request.

Publication of information about failure to comply with a request

16.   Subsection 16A(4) provides that the Minister may publish the following specific details about an entity that fails to comply with a request or requests made under subsection 16A(1):

·          the identity of the entity

·          if the request or requests relates to an entity’s failure to provide a joint Modern Slavery Statement under subsection 14(2), the identities of the reporting entities covered by that statement

·          the date and details of the request or requests made, including the period or periods for response and any extensions given, and 

·          the reasons why the Minister is satisfied the entity has failed to comply with the request or requests.

Subsection 16A(4) provides that these details could be published on the Modern Slavery Statements Register established under section 18, or in any other way the Minister considers appropriate. For example, this could include publication in the Minister’s annual report to the Parliament on the implementation of the Act under new subsection 23A(1).

17.   Subsection 16A(5) clarifies the circumstances under which an entity has failed to comply with a request made under subsection 16A(1). These circumstances are limited to two situations. The first situation is where an entity fails to provide an explanation in relation to a request made under subparagraph 16A(1)(a). The second situation is where an entity fails to take remedial action in response to a request made under subparagraph 16A(1)(b). This ensures that the Minister is only able to publicly identify non-compliant entities in situations of serious non-compliance.     

Review of decisions

18.   Subsection 16(A)(6) provides that any decision by the Minister to publish information about an entity under subsection 16A(4) may be subject to merits review by the Administrative Appeals Tribunal. This ensures that an entity that considers it may have been incorrectly publicly identified by the Minister is able to seek a formal review of the decision, upon application to the Administrative Appeals Tribunal.   

Amendment 3                        Clause 19, page 14 (line 22)

19.   Amendment 3 would amend subsection 19(2) of the Bill to provide that the Minister may register a Modern Slavery Statement given for the purposes of compliance with section 13 or section 14, including where the statement is given as a result of a request made under section 16A. This amendment is consequential to the addition of section 16A proposed in amendment 2.

Amendment 4                        Clause 21, page 16 (line 8)

20.   Amendment 4 would amend the simplified outline of Part 4 of the Bill set out in section 21 to include information about the operation of new section 23A and amended section 24 . The simplified outline is not intended to be comprehensive and readers should rely on the substantive provisions. For an explanation of the operation of section 23A and section 24, refer to amendments 5 to 8.

Amendment 5                        Page 16 (after line 24)

                                                Section 23A: Annual reports about implementation

21.   Amendment 5 would insert a new section 23A into Part 4 of the Bill.

22.   Section 23A will require the responsible Minister to report annually to the Parliament about the implementation of the Act. This requirement for annual reporting is intended to ensure that the Bill is subject to ongoing monitoring and evaluation and to provide a mechanism to identify any amendments to the Bill that may be required before the three-year review. This requirement will also contribute to the development of a detailed evidence base about the operation of the Bill and compliance trends to support the three-year review of the Act.

Requirements for annual reports about implementation

23.   Subsection 23A(1) sets out requirements for the timing of the annual report. Subsection 23A(1) requires the responsible Minister to prepare an annual report for each calendar year, including the year in which the Bill enters into force. The Government expects a majority of reporting entities will report on an Australian financial-year cycle, which means that their Modern Slavery Statements will be due by 31 December each year. Requiring the responsible Minister to report to the Parliament on a calendar year cycle ensures that the report can consider these statements.

24.   Subsection 23A(1) also sets out minimum requirements for the content of the annual report. Paragraph 23A(1)(a) provides that the annual report must include an overview of compliance by entities with the Act. This is intended to ensure the annual report includes general information about compliance trends, such as the number of entities that have published Modern Slavery Statements. Paragraph 23A(1)(b) provides that the annual report must also identify best practice modern slavery reporting. This could include identifying entities that have submitted Modern Slavery Statements that demonstrate best practice and/or identifying best practice trends in reporting, such as the inclusion of information about particular issues.           

25.   Subsection 23A(2) provides that the annual report must be commenced as soon as practicable after the end of the relevant calendar year and must be completed before the end of the following calendar year.

26.   Subsection 23A(3) provides that the Minister must table the annual report in the Parliament within 15 sitting days of its completion. This requirement ensures that the Parliament will have oversight of the implementation of the Act.   

Amendment 6                                    Heading to clause 24, page 16 (line 25)

                                                            Section 24: Three-year review

27.   Amendment 6 changes the wording of the heading of section 24 in the Bill from ‘Review of this Act’ to ‘Three-year review’. This change ensures that the review of the Act required under section 24 is clearly differentiated from the requirement for the Minister to report annually on the implementation of the Act under new section 23A.

Amendments 7 and 8                        Clause 24, page 17

28.   Amendments 7 and 8 amend section 24 of the Bill to clarify the scope of the three-year review of the Act. Section 24 requires that the Minister must prepare a report to review the operation of the Act and any rules over the first three years, and determine whether any amendments are needed.

29.   The requirement for a review of the Act set out in section 24 is different from the requirement for the Minister to report annually to the Parliament on the implementation of the Act set out in new section 23(A). The annual reports required by section 23(A) are intended to provide factual information about the implementation of the Act. In contrast, the three-year review of the Act must evaluate the operation of the Modern Slavery Reporting Requirement more generally and determine whether amendments are required. 

Requirements for the scope of the three-year review

30.   Amendment 7 amends subsection 24(1) of the Bill to explicitly require the three-year review to consider:

·          compliance with the Act and any rules, including whether additional measures such as civil penalties are required to improve compliance,

·          whether a further review of the Act is required and, if so, when the further review should be undertaken, and

·          whether any other actions are required to improve the operation of the Act.

31.   Amendment 8 amends paragraph 24(1)(b) of the Bill to add the following new words: ‘to implement review recommendations.’ The revised wording of paragraph 24(1)(b) reads ‘whether this Act or any rules should be amended to implement review recommendations.’ This amendment does not substantively alter the operation of this provision.  

32.   These amendments ensure that the three-year review must consider compliance rates and the need for civil penalties or other compliance mechanisms. This provides a clear pathway to future penalties if compliance rates over the first three years are inadequate. These amendments also provide for future reviews of the Act if required. They also ensure that the necessity and timing for future reviews is considered after the Modern Slavery Reporting Requirement has been in operation for three years, rather than by providing for rolling reviews at fixed time periods.    



 

STATEMENT OF COMPATIBILITY FOR AMENDMENTS TO A BILL THAT RAISES HUMAN RIGHTS ISSUES

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Amendments to the Modern Slavery Bill 2018

 

The amendments to the Modern Slavery Bill 2018 are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the amendments

1.                   The Modern Slavery Bill 2018 (‘the Bill’) establishes a Modern Slavery Reporting Requirement to strengthen Australia’s approach to combating modern slavery. The amendments improve the operation of key aspects of the Bill, including by providing a clear pathway for future civil penalties if compliance rates are inadequate. 

2.                   Amendments 1 to 3 establish a mechanism to respond to cases of potential non-compliance. These amendments empower the responsible Minister to require a suspected non-compliant entity to explain why it has not complied with the Modern Slavery Reporting Requirement or to require the entity to undertake specified remedial action. If the entity does not comply, the Minister may publicly identify the non-compliant entity.

3.                   Amendments 4 to 6 require the responsible Minister to report annually to the Parliament about the implementation of the Modern Slavery Act.

4.                   Amendments 6 to 8 clarify the focus of the three-year review of the legislation, including by explicitly requiring the review to assess whether additional measures to improve compliance with the Modern Slavery Reporting Requirement are necessary. These amendments implement recommendation four of the Senate Legal and Constitutional Affairs Legislation Committee’s report on the Bill. 

Human rights implications

5.                   The objective of the Bill is to strengthen Australia’s approach to modern slavery by equipping and enabling Australia’s business community to respond effectively to modern slavery and develop and maintain responsible and transparent supply chains.

6.                   The amendments support this objective by improving the operation of key aspects of the Bill. The amendments do not substantively modify existing measures in the Bill and do not directly promote human rights beyond the extent detailed in the explanatory memorandum for the Bill, which was tabled in the Parliament on 28 June 2018.

7.                   The amendments (amendments 1 to 3) may also engage the right to privacy and reputation in Article 17 of the International Covenant on Civil and Political Rights (ICCPR) to a limited degree by empowering the responsible Minister to publicly identify non-compliant entities. An analysis of the impact of amendments 1 to 3 is set out below.

Human rights limited by the amendments

Legitimate objective of the amendments

8.                   Under international human rights law, any limitation on rights and freedoms must be reasonable, necessary and proportionate for the pursuit of a legitimate objective. For an objective to be legitimate, it must address a pressing or substantial concern, and not simply seek an outcome regarded as desirable or convenient.

9.                   The Modern Slavery Bill 2018 has a legitimate objective, to strengthen Australia’s approach to modern slavery by equipping and enabling Australia’s business community to respond effectively to modern slavery and develop and maintain responsible and transparent supply chains.

10.               Amendments 1 to 3 directly support this objective by providing an appropriate mechanism for the responsible Minister to respond to potential cases of non-compliance. This will contribute to the overall effectiveness of the legislation by ensuring incidences of non-compliance can be addressed.    

Right to privacy and reputation

11.               Article 17(1) of the ICCPR states that no one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation. The United Nations Human Rights Committee have interpreted the right to privacy as comprising freedom from unwarranted and unreasonable intrusions into activities that society recognises as falling within the sphere of individual autonomy.

12.               The right to privacy may be limited where the limitation is lawful and not arbitrary and where it is reasonable, necessary and proportionate to achieving a legitimate objective.

13.               Amendments 1 to 3 may limit the right to privacy by empowering the responsible Minister to publish the identity of non-compliant entities. Information about businesses can be considered personal information if information can be linked to an individual. In some cases, an individual’s personal information can be so interconnected to information about their business or company, that information about that business or company can constitute personal information about the individual.

14.               This potential limitation to the right to privacy is reasonable and necessary because it does not require the disclosure of identifying information beyond the extent already required by the Bill and justified in the explanatory memorandum for the Bill. In order to fulfil its objective, the Bill requires all reporting entities to provide information about their identity, operations and supply chains. 

15.   The amendments also contain a number of safeguards to ensure that any limitation to the right to privacy and reputation is reasonable and proportionate. These safeguards are described below and provide important protections for reporting entities, including by:

·          ensuring entities are aware of the potential consequences for non-compliance

·          providing entities with an opportunity to explain and/or rectify their non-compliance, and

·          ensuring an entity is able to seek a review by the Administrative Appeals Tribunal of any decision to publish its identity.   

16.   Importantly, the Bill specifically provides that the Minister may only publish information about a non-compliant entity where that entity has failed to comply with a request to explain its non-compliance or has failed to undertake remedial action.

17.   The Bill also provides that such a request may only be made by the Minister if the Minister is ‘reasonably satisfied’ that the entity has not complied with the Modern Slavery Reporting Requirement.  This means that a request will only made by the Minister in situations where there is evidence to suggest an entity should have complied. For example, where an entity may not have published a Modern Slavery Statement despite its annual report indicating its annual revenue is above the $100 million threshold. 

18.   The amendments also require that any request must explain the potential consequences of non-compliance, as well as the scope for the Minister to extend the deadline for response. This process will ensure that that an entity that has been identified as potentially non-compliant or has already taken remedial action is able to explain the circumstances. For example, the entity may explain that it does not meet the revenue threshold for a reporting entity, and is not required to comply with the Modern Slavery Reporting Requirement.   

19.   In addition, the amendments provide that entities will have at least 28 days to comply with a request. This timeframe can be extended at any time if required, including at the request of the entity. This ensures that entities are provided with an appropriate time period to comply with a request. 

20.   The amendments also provide that a decision to publish information about a non-compliant entity may be reviewable by the Administrative Appeals Tribunal.

Conclusion

21.   The amendments are compatible with human rights because they support the legitimate objective of the Bill, which is to strengthen Australia’s approach to modern slavery by equipping and enabling Australia’s business community to respond effectively to modern slavery and develop and maintain responsible and transparent supply chains.

22.               To the extent that the amendments may limit the right to privacy and reputation, those limitations are reasonable, necessary and proportionate to the legitimate objective of the Bill.