Key Modern Slavery Act Statement Submission Deadlines to Remember in 2021

Back to Normal for Companies Subject to Australia’s Modern Slavery Act

Companies around the globe have reopened or are beginning to reopen after pandemic-related lockdowns. As we reengage in more pre-pandemic activities, news articles abound with titles such as “Ten Signs that Things are Getting Back to Normal” and “Three Ways Your Business Can Thrive in the New Post-Pandemic Marketplace.” One thing that may not be included in those lists, but should be on your company’s list, is the next deadline for submission of your annual modern slavery statement to the online register maintained by the Australian Border Force (“ABF”).

Background

The Modern Slavery Act (“MSA”) requires companies to submit their annual modern slavery statements to the ABF within six months after the end of their reporting periods. Your company’s reporting period is based on the financial year or other annual accounting period used by your company.

Due to the pandemic, the Australian government extended the first statement submission deadline by an additional three months for companies that used either a foreign or Australian financial year (collectively, the “First 2 Reporting Groups”). Although this temporary extension changed the deadline for submission of modern slavery statements, it did not change the applicable reporting periods. The Australian government did not grant an extension of the first statement submission deadline for companies with reporting periods that ended after June 30, 2020 (the “3rd Reporting Group”). As a result, a company that uses a calendar financial year, for example, must submit its first annual modern slavery statement to the ABF by June 30, 2021.

Future Framework

The Australian Government did not permanently extend any of the statutory reporting deadlines so those companies in the First 2 Reporting Groups that have already filed their first annual modern slavery statement will have less than a year before their second annual statement is due. Companies that use a foreign financial year should have submitted their first annual modern slavery statements to the ABF by December 31, 2020. These companies must submit their second statements to the ABF by September 30, 2021. Companies that use an Australian financial year should have submitted their first annual modern slavery statements to the ABF by March 31, 2021 and their second statements will be due by December 31, 2021.

The table below highlights the common reporting periods and applicable submission deadlines in 2020 and 2021 for companies in the First 2 Reporting Groups and impacted by the temporary one-time deadline extension:

As noted in the chart above, companies in the 3rd Reporting Group were not impacted by the temporary measure so their first submission deadline remains the statutory deadline of June 30, 2021. The table below sets out the applicable submission deadlines for companies in 2022 and beyond:

Next Steps

The temporary deadline extension for companies in the First 2 Reporting Groups was granted by the government in recognition that the global pandemic had significantly impacted these companies and their global supply chains in 2020. The ABF also noted in its Modern Slavery Update published in November 2020 that:

Good-practice statements directly consider the impact of the COVID-19 pandemic on the entity’s operations and supply chains, including by recognising where modern slavery risks have increased and explaining how the reporting entity is responding to these increased risks.

A number of companies in the First 2 Reporting Groups, however, failed to substantively consider and address in their first modern slavery statements how the pandemic may have increased the vulnerability of workers in their operations and supply chains to modern slavery practices. Many companies included only very brief and overly general pandemic-related observations or failed to even address the pandemic in their first statements. This content gap leaves a lot of room for these companies to show measurable improvements in their second-year statements.

For companies in the First 2 Reporting Groups, a significant portion of their second reporting period falls after the mid-March 2020 pandemic-related shutdowns began impacting many companies and their suppliers. As such, these companies should continue to address pandemic-related issues in their operations and supply chains and outline the company’s observations and actions taken in more substantive detail in their second annual statements. The first statements from companies in the 3rd Reporting Group cover the reporting period from January 1 to December 31, 2020. As a result, these companies should have more information and data to help them provide more thorough and substantive discussions and analysis of pandemic-related risks in their first statements due by June 30, 2021.

The ABF’s good practice tips on pandemic-related reporting released in November 2020 remain applicable to all companies, even as we begin to see signs of normal returning around the globe. Although we may still be using hand sanitizer, companies should not sanitize the descriptions of the actions they took to ensure that modern slavery risks did not increase in their operations or supply chains during the height of the pandemic and throughout their reporting periods in 2020 and 2021. Actions may speak louder than words, but words thrown on paper cannot hide a lack of action.

As we all learn to navigate the new normal in 2021 and beyond, it is important for companies subject to the MSA to continue their compliance efforts so they can continuously improve their programs and meet the deadline for submission of their next annual modern slavery statements. In fact, companies that use an Australian financial year must draft and file two statements in 2021, but that current normal will not be the permanent normal. The MSA’s annual reporting deadlines and publicly available online register create powerful incentives for companies to develop proactive and novel solutions to identify and assist those trapped in modern slavery to escape these practices and thrive in a new permanent normal. The MSA may prescribe reporting periods and submission deadlines, but the mission to eradicate modern slavery practices in Australia and around the globe has no prescribed duration.