Illegal Logging Report Card shines light on high levels of noncompliances
A statutory review of the Illegal Logging Prohibition Act 2012 was issued in November 2018. This noted:
• Despite the department’s efforts to raise awareness and understanding of the Act, the compliance audit process has shown that there continue to be high levels of noncompliance in the regulated community.
• Between 2015-2017 during soft compliance period, there were 500 audits done. These assessments found that around 60 per cent of the importers assessed were noncompliant with some or all of their due diligence obligations.
• However during the same period, approximately 71 per cent of customs declarations for the illegal logging CPQ that they had complied with their due diligence requirements.
Put bluntly it seems that something does not add up, the industry is generally not complying either out of ignorance or deliberately and the department knows this. The report says “The department may increase its assessment and audit rates for these entities until compliance with the Act can be established”.
Since the CPQ is often answered by customs brokers acting on behalf of their clients, the broker community has had a strong interest in the due diligence requirements.
They are trying to work with the industry by encouraging and prompting compliance while responding to noncompliance in a way that is commensurate with the behaviours involved. But in the report the department said they will “respond to deliberate acts of noncompliance with the full force of the law”. So continuing to do nothing carries big risks.
“Big Risks” in this are penalties from five years’ imprisonment and/or 500 penalty units ($105,000 at current penalty rates) for the most serious offences to 100 penalty units ($21,000) for less serious offences.
Notably in November 2018, the same month the review report was published, a Queensland-based importer was served with the first infringement notice issued under Australia’s illegal logging laws.
“Not responding is a response – we are equally responsible for what we don’t do.” ― Jonathan Safran Foer
On 29 November 2018, the Modern Slavery Bill 2018 (Cth) (Bill) was passed in the House of Representatives, heralding a new statutory modern slavery reporting requirement for larger companies operating in Australia.
The press release accompanying the Act said:
“It is crucial that reporting entities begin reviewing their supply chains and collecting data ahead of the introduction of reporting obligations”.
For Australian corporations over $100 million turnover, the first reporting year will be 1 July 2019-30 June 2020. Entities with an international financial year may have to report earlier.