Dennis Kwok, a member of Hong Kong's Legislative Council, has sent the Chief Executive a draft Modern Slavery Bill 2017 ("Draft Bill") for consideration. The Draft Bill is in similar terms to the Modern Slavery Act 2015 (UK) ("UK Act") and follows proposals for similar legislation to be introduced in Australia.
If passed into law, the Draft Bill would impose annual reporting requirements on certain commercial entities, in addition to creating new criminal offences and a civil cause of action against persons or entities committing or benefiting from such offences. The proposed criminal offences would fall within the definition of "indictable offence" under the existing scope of the Organised and Serious Crimes Ordinance (Cap. 455) ("OSCO") with the result that those offences could be regarded as predicate offences for a "money laundering" charge.
The Draft Bill proposes to amend the Crimes Ordinance (Cap. 200) by repealing the existing offence of trafficking for the purpose of prostitution (s129) and inserting a number of broader offences.
Slavery offence: It will be an offence to knowingly hold a person in slavery or servitude, or knowingly require a person to perform forced or compulsory labour. An offender would be liable, on indictment, to life imprisonment or, on summary conviction, to a maximum 12 months imprisonment and a HKD 100,000 fine.
Human trafficking offence: It will be an offence to arrange or facilitate the travel of another person with a view to that person being exploited. 'Travel' includes entering or leaving any country or travelling within any country. 'Exploitation' is defined broadly to include:
- slavery, servitude and forced or compulsory labour;
- sexual exploitation;
- removal of organs;
- providing services or benefits by force, threats or deception; and
- using, or attempting to use, a person to provide services or benefits because that person is a child, is mentally or physically ill or disabled, or has a particular family relationship.
As with the slavery offence, an offender would be liable, on indictment, to life imprisonment or, on summary conviction, a maximum 12 months imprisonment and a HKD 100,000 fine.
Secondary offence: Committing any offence with the intention of committing human trafficking, would constitute an additional separate offence under the Draft Bill. An offender would be liable, on indictment, to a maximum10 years imprisonment or, on summary conviction, a maximum 12 months imprisonment and a HKD 50,000 fine.
Forced marriage offences: This includes two separate offences. The first is for causing another person to enter a forced marriage, and is punishable, on indictment, to a maximum seven years imprisonment. The second is for being a party to a forced marriage (other than the victim), and is punishable, on indictment, to a maximum seven years imprisonment or, on summary conviction, to a maximum 12 months imprisonment and a HKD 50,000 fine.
Sex tourism offences: These offences would prohibit any person entering of leaving Hong Kong to engage in specified 'illicit sexual conduct' such as rape or child pornography. They would also prohibit Hong Kong residents from engaging in this behavior in a foreign country. Anyone facilitating the travel of a person they know to be travelling for such a purpose will also commit an offence. For any of these offences, an offender would be liable, on indictment, to life imprisonment and a HKD 3 million fine or, on summary conviction, to a maximum four years imprisonment and a HKD 500,000 fine.
Some of these offences, such as being a party to a forced marriage, can only be committed by natural persons. Where the offence is capable of being committed by a legal person (eg a company), we expect the company to be liable to a fine as the court sees fit.
SLAVERY AND HUMAN TRAFFICKING STATEMENT
Bodies corporate and partnerships conducting business in Hong Kong whose turnover exceeds a threshold amount would each financial year be required to publish a slavery and human trafficking statement. The turnover threshold is proposed to be set by regulation. The threshold under the UK Act is £36 million worldwide turnover. In Australia, the Joint Standing Committee on Foreign Affairs, Defence and Trade has suggested a turnover threshold of AUD 50 million.
Similar to the UK Act, the Draft Bill requires that the slavery and human trafficking statement must:
- detail the steps taken that financial year to ensure that slavery and human trafficking is not taking place in any part of the organisation's business or in any of its supply chains. If no steps have been taken, the statement would have to state that;
- be approved by the board of directors (or equivalent) and signed by a director (or general partner); and
- be published on the company's website with a link to that statement appearing in a prominent place on the homepage.
OSCO IMPLICATIONS - DEALING WITH THE PROCEEDS OF SLAVERY OR TRAFFICKING
Each of the proposed new offences (including the secondary offence) would fall within the definition of "indictable offence" under section 25 of OSCO with the result that those offences could be regarded as predicate offences for a "money laundering" charge. Further, section 25(4) of OSCO provides that references to an indictable offence include a reference to conduct which would constitute an indictable offence if it had occurred in Hong Kong. The consequence is that persons or organisations in Hong Kong could be prosecuted for money laundering if they deal with the proceeds of slavery or trafficking taking place outside Hong Kong.
CIVIL CAUSE OF ACTION
The Draft Bill also establishes a civil cause of action, which would allow a claim to be brought against a person who:
- has committed one of the new offences against the claimant; or
- has benefited financially (or has received anything of value) by participating in a venture they knew or should have known would violate one of the above offences.
The Draft Bill states that this would be done through civil proceedings 'in like manner as any other claim in tort'. This particular provision does not appear in the UK Act and is based on US legislation, specifically §1595 of 18 U.S. Code Chapter 77 (Peonage, Slavery, and Trafficking in Persons).
A formal response to the Draft Bill from the Chief Executive has not yet been received. As such there is not yet a clear timetable for the consideration of the Draft Bill by the Legislative Council. However, it is intended to be discussed at the Panel of Constitutional Affairs this year. We would expect that, if progressed, the Draft Bill would be opened to public comment. We will continue to monitor the progress of the Draft Bill and provide further updates.
The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2020