On 1 January 2019, the Modern Slavery Act 2018 (Cth) (Commonwealth Act) commenced, creating a modern slavery reporting requirement for certain companies operating in Australia.
Entities will need to report under the Commonwealth Act if they have a:
- consolidated revenue of at least $100 million per annum, and
- arean Australian entity or foreign entity carrying on business in Australia.
A Modern Slavery statement must be submitted within six months after the end of the reporting entity’s financial year. The reporting period is the entity’s first full financial year that commences after 1 January 2019.
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Entity’s annual financial reporting period |
First reporting period under the Commonwealth Act |
Due date for statement |
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1 July to 30 June |
1 July 2019 to 30 June 2020 |
31 December 2020 |
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1 January to 31 December |
1 January 2020 to 31 December 2020 |
30 June 2021 |
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1 April to 31 March |
1 April 2019 to 31 March 2020 |
30 September 2020 |
Image courtesy of Norton Rose Fulbright.
As of 2018, the Department of Home Affairs (Home Affairs) estimates that the Commonwealth Act will apply to approximately 3,000 entities. The Commonwealth Act aims to combat modern slavery in global supply chains, where the United Nations estimates 40 million people are victims of modern slavery worldwide.
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What the FSC been doing?
The FSC ESG Working Group (ESG WG) has been meeting with the Responsible Investment Association Australasia (RIAA) to work on a Due Diligence Questionnaire (DDQ) designed to provide asset owners comfort that fund managers are investing their funds in line with Modern Slavery reporting requirements.
The goal is also to create a consistent and streamlined approach across the industry for reporting Modern Slavery requirements and develop a standardised method of reporting across the investment industry. The benefit of working with both asset owners and investment managers is that fund manager members are able to provide early feedback on whether the expectations of asset owners are feasible and practical.
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Promoting industry-wide adoption
Since the draft DDQ has been completed, the FSC and RIAA have circulated the DDQ for road testing and consultation within their respective member companies. The ESG WG has since met with the RIAA Modern Slavery Working Group to share the member feedback and to further edit the DDQ.
Overall, there were minimal changes made from both the FSC and RIAA to the latest draft DDQ due to the positive member responses. In addition, the DDQ was also shared with the Australian Institute of Superannuation Trustees (AIST), the Association of Superannuation Funds of Australia (ASFA) and the Australian Council of Superannuation Investors (ACSI). RIAA and the FSC have agreed to half-yearly meetings to continue the evolution of the DDQ.
If you want would like to learn more about Modern Slavery in an investment context, please you can contact Vincent So on This email address is being protected from spambots. You need JavaScript enabled to view it..
OPINION PIECE - by Vincent So, Policy Manager, Investments and Global Markets
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