How Australian construction companies engage in procurement and multi-national transactions is set to come under the spotlight as the Federal Government considers whether to enact an Australian equivalent of the UK's Modern Slavery Act 2015 (the Act).
The Act aims to tackle issues such as human trafficking and forced labour in the modern world, implementing unprecedented new reporting requirements for transparency in supply chains which now apply to certain companies engaging in business in the UK. In particular, the Act requires that all businesses operating in the UK with a turnover of £36 million prepare a slavery and human trafficking statement approved by its board of directors which must then be prominently displayed on the organisation's website. The statement must include information regarding the steps the company has taken to inform itself of and abolish the practice of slavery and human trafficking within its supply chain.
Failure to comply with any of the requirements under the Act may leave a company subject to a potential injunction or order of the High Court, with any subsequent failures leading to a finding of contempt.
While the Act applies to all companies engaging in business in the UK, those in the construction industry will need to pay particular attention as supply chains become increasingly global. This will be particularly important for those engaging in large scale infrastructure projects, or those with complex supply chain networks. No longer is ignorance an excuse for non-compliance, as all failings will become public knowledge.
Consequently, consideration will need to be given as to when a company is considered to be "engaging in business" within the UK, and the administrative consequences of falling within the ambit of the Act. This is because any organisation which fails to consider the issue of modern slavery will likely face not only legal consequences, but public relations challenges too.
Earlier this year, the Attorney-General requested the Foreign Affairs and Aid Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade (the Committee) inquire into and report on establishing a Modern Slavery Act in Australia.
The Committee's inquiry will consider the following issues:
- the nature and extent of modern slavery within the Australian context
- the best practice models for combating modern slavery
- the effectiveness of the UK legislation in meeting its stated aims
- the implications of such legislation on Australia's visa regime and conformity with Australia's obligations at international law
- generally, whether a need exists for the introduction of a modern slavery act in Australia.
The Committee has defined modern slavery as including: slavery, forced labour, wage exploitation, involuntary servitude, debt bondage, human trafficking, forced marriage and other related behaviours.
We will keep you updated on how this inquiry progresses.
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