Legal Insights

COVID-19 increases risk of modern slavery and complexity of compliance – Government extends the deadline to report

By Sonia Sharma & Emily Lau

• 14 May 2020 • 5 min read

In response to the impact of COVID-19, the Department of Home Affairs via the Australian Border Force has released guidance for reporting entities on how to tackle COVID-19 issues in their modern slavery statements. Separately, the Government has also extended the deadline to report, giving reporting entities some much needed breathing space to meet their compliance obligations.

The impact of the COVID-19 pandemic on workers, government, civil society groups and organisations has been significant.

Increased risk of modern slavery

Unfortunately, the COVID-19 pandemic has increased the number of people around the world who are at risk of becoming victims of modern slavery. According to the International Labour Organisation, global unemployment is set to increase by almost 25 million due to increased poverty and financial stress pushing people towards risky or exploitative employment.

Government and civil society stretched

Meanwhile as government and civil society respond to the COVID-19 crisis, they have reduced capacity to combat modern slavery.

Reporting entities grappling

Organisations have also had less time and resources available to address modern slavery risks due to the need to deal with the immediate consequences of COVID-19 on their business. In some cases, organisations may not be able to implement their full modern slavery compliance strategy or risk assessment as originally envisaged due to staff changes, travel restrictions, reduced budgets, less resourcing or other impacts due to COVID-19.

Extended reporting deadlines

The good news is that the Australian Government has recognised these additional challenges and temporarily extended the reporting deadlines under the Modern Slavery Act 2018 (Cth) by an additional three months for all entities whose reporting periods end on or before 30 June 2020.

This extension of time issued by the Department of Home Affairs recognises that many organisations have been adversely affected by COVID-19 in their efforts to prepare and submit their modern slavery statements and may need more time. The new deadlines are below:

Reporting period

Original deadline for submission of modern slavery statement

New, extended deadline for submission of modern slavery statement

1 April 2019 – 31 March 2020 (Foreign Financial Year)

30 September 2020

31 December 2020

1 July 2019 – 30 June 2020
(Australian Financial Year)

31 December 2020

31 March 2021

Reporting periods ending after 30 June 2020.

The 6-month deadline for reporting periods ending after 30 June 2020 remains unchanged.

How to address increased risks of modern slavery during COVID-19

In terms of how to address the increased risks of modern slavery during the COVID-19 pandemic, the Department of Home Affairs via the Australian Border Force has released guidance for organisations that are required to report under the Modern Slavery Act. This guidance sets out the Department of Home Affairs’ expectation that organisations take steps to protect vulnerable workers in their global operations and supply chains as part of their broader response to the pandemic. Things your organisation should consider doing:

  1. Ask your suppliers for information: What steps have they taken to protect their workers from COVID-19? Do their workers have access to sick or carers leave? Do they provide their workers with protective equipment?
  2. Avoid purchasing practices that may increase modern slavery risks: Organisations requesting short production time-frames, seeking excessive discounts or fail to pay for completed work could be increasing modern slavery risks.
  3. Ensure workers continue to have access to grievance mechanisms.
  4. Collaborate with suppliers as well as workers, industry and civil society organisations to identify best practice approaches to protect vulnerable workers.

Importantly, the Department of Home Affairs via the Australian Border Force encourages reporting entities affected by COVID-19 to clearly explain in their modern slavery statements how COVID-19 has impacted their capacity to assess and address modern slavery risks during their reporting periods. This might include explaining:

  • how your organisation was not able to attend to planned factory visits
  • reduced auditing of modern slavery risks
  • how you have deferred particular measures such as staff training or more comprehensive group-wide consultation to a later date.

What your organisation should be doing now

If you are required to report, your organisation should:

  • take advantage of the additional time, if required
  • take steps to be in a position to submit your first modern slavery statement when it is due, including revising your compliance program if required due to COVID-19
  • take steps to assess how modern slavery risks have changed due to COVID-19
  • clearly explain in your modern slavery statement how COVID-19 has impacted your capacity to assess and address modern slavery risks during their reporting periods (e.g., reduced ability to audit suppliers).

Maddocks has produced guides on legal issues raised by the coronavirus which may be of interest, and we encourage you to share these with colleagues who may also find them useful.

Still need help?

We appreciate that many organisations have had a lot on their plate right now and have developed a number of modern slavery compliance tools which are easy to deploy to assist clients with their compliance obligations. Our modern slavery law specialists can also assist you with auditing, training, risk assessment and drafting your modern slavery statement, including to deal with COVID-19 impacts.

Maddocks has produced guides to a range of legal issues raised by COVID-19.

By Sonia Sharma & Emily Lau

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