Australia: Call for submissions: an opportunity to shape NSWs anti-slavery framework

There are many views on how State and Federal legislation should address the scourge of modern slavery. In an effort to address the inconsistency, and in some cases confusion, between the Modern Slavery Act 2018 (NSW) and the Modern Slavery Act 2018 (Cth), the NSW Legislative Council's Standing Committee on Social Issues is inviting stakeholders to comment on a draft Amendment Bill and Regulations.

Engaging in this consultation process is an important opportunity for businesses to seek clarification and provide feedback on the operation of NSW's anti-slavery scheme.

In many ways, Australia is at the forefront of global efforts to eradicate modern slavery. In June 2018, the Modern Slavery Act 2018 (NSW) (NSW Act) passed Parliament with bi-partisan support. NSW was the first Australian jurisdiction to legislate for a modern slavery reporting regime (which includes penalties of up to $1.1 million for non-compliance), and the second jurisdiction in the world to introduce the office of an Anti-Slavery Commissioner.

Six months later, the Commonwealth passed its own Modern Slavery Act 2018 (Cth) (Commonwealth Act) which essentially requires entities based or operating in Australia with a consolidated revenue of more than $100 million to report annually on the risks of modern slavey in their operations and supply chains, and on the actions they take to address those risks. The idea behind the Commonwealth Act is to work towards the eradication of modern slavery through supply chain due diligence.

Commencement of the NSW Act has stalled, in part due to complications arising from potential inconsistencies in how the NSW Act would operate alongside the Commonwealth Act and other federal legislation. The NSW Legislative Council's Standing Committee on Social Issues (Committee) is currently considering these questions under broad Terms of Reference, including whether the NSW Act is even 'necessary' in light of the Commonwealth Act. 1

Key features of the NSW Act

A key objective of the NSW Act is combatting modern slavery through a number of measures, These include:

  • providing for an Anti-Slavery Commissioner;
  • providing assistance and support for victims;
  • raising community awareness;
  • education and training about modern slavery; and
  • encouraging collaborative action.

The NSW Act also provides for mandatory reporting on the risks of modern slavery occurring in the supply chains of government agencies and certain commercial organisations through preparation of an annual modern slavery statement (Statement).

Commercial organisations that are required to report under the NSW Act are those that meet all of the following criteria:

  • they have one employee in NSW;2
  • they have an annual turnover of over A$50 million;
  • they are a business which supplies goods and/or service for profit;3 and
  • they are not a government agency.

The NSW Government estimates that there are at least 1,650 commercial organisations headquartered in NSW which will be required to report under the NSW Act.4 Entities must comply with the Act and there are penalties of up to $1.1 million if a Statement is not prepared, or if it contains any false or misleading information or is not made public.5

Review of the NSW Act

As mentioned above, the NSW Act was referred to the Committee for consideration along with the Amendment Bill and Regulations. As a result, the Committee is taking submissions on the matters listed in its Terms of Reference with particular reference to issues such as:

  • operability of the proposed anti-slavery scheme;
  • the effect of the anti-slavery scheme on business, including the supply chain reporting obligations;
  • the intended application of the anti-slavery scheme with respect to charities and not-for-profit organisations, State Owned Corporations and local councils;
  • the appropriateness and enforceability of Risk Orders;
  • the unintended consequences of drafting issues with the NSW Act, including with respect to the Human Tissues Act 1983 (NSW) and the sale and supply of human tissue;
  • the risk of constitutional challenge due to inconsistencies with the Criminal Code Act 1995 (Cth);
  • whether the passage of the Commonwealth Act renders all or part of the NSW Act unnecessary, or requiring of amendments to address inconsistencies or gaps;
  • the preferred course of action to address the issues identified in the Terms of Reference; and
  • any other related matter.

Additionally, the Commissioner is seeking feedback on a range of matters raised in the Regulations which are designed to:

  • provide certainty for businesses on their obligations under the NSW Act;
  • take into account community expectations; and
  • complement the reporting requirements under the Commonwealth Act.

Proposed changes to the NSW Act

The Amendment Bill and Regulations aim to 'enhance the legal clarity, constitutionality and operation of the NSW Act'.6 Some of the key changes relate to the interoperability of the NSW and Commonwealth laws.

There are also significant clarifications in respect of the supply chain reporting framework.

First, the Regulations specify that the Commonwealth Act is a corresponding law. 7 This confirms that where an entity is subject to the requirements of the Commonwealth Act, it will not be subject to the NSW Act requirements in respect of supply chain reporting and transparency.

Further, if an entity voluntarily reports under the Commonwealth Act, or reports as a subsidiary of a Commonwealth reporting entity, the entity can comply with the NSW Act by notifying the Commissioner of those facts and providing a copy of the statement made under the Commonwealth Act to the Commissioner. However, despite reporting under the Commonwealth Act, penalties will still apply for providing information in a Statement that the persons knows, or ought reasonably to know, is false or misleading.8

Importantly, the reporting regime will mirror the requirements in the Commonwealth Act by allowing for joint Statements,9 ,matching the six month time frame for reporting,10 and mirroring the content requirements of Commonwealth Statements.11

In terms of penalties, the position remains that where entities are covered by the NSW Act, but not the Commonwealth Act (i.e. those with a NSW employee and a turnover between $50 million and $100 million), they are subject to penalties, but entities with a turnover of $100 million or more are not.

However, the Amendment Bill clarifies that no criminal or civil liability attaches (apart from under the NSW Act) to a person who:

  • provides a Statement in good faith in compliance with the NSW Act; or
  • voluntarily reports to the Commissioner.12

The Amendment Bill also clarifies that if a Statement contains defamatory information, no defamation or other civil liability is incurred.13

For further information regarding the proposed Amendment Bill, see the NSW Government's Submission here and Explanatory Paper here.

How to have your say on the NSW Modern Slavery Framework

Submissions on the NSW Act, the Amendment Bill and Regulations can be made to the Committee here by 4 October 2019. Submissions can be made the Committee on a confidential basis and not made public.

The Commissioner is also taking submissions. These are due before 13 September 2019, and can be submitted here. Submissions can be provided to the Commissioner on a confidential basis and not shared to the NSW Government at all, or to the Commissioner and shared with the NSW Government without identifiable information if you'd prefer.

Footnotes

1 NSW Legislative Council Standing Committee on Social Issues, Terms of Reference (2019), full terms of reference are available here. The Committee consists of the Hon Shayne Mallard, MLC (Liberal Party, Chair); The Hon
Daniel Mookhey MLC (Australian Labor Party, Deputy Chair); The Hon Ben Franklin MLC (The Nationals); The Hon Rose Jackson MLC (Australian Labor Party); The Hon Taylor Martin MLC (Liberal Party), Revd the Hon Fred Nile MLC (Christian Democratic Party), Mr David Shoebridge MLC (The Greens) and The Hon Natalie Ward MLC (Liberal Party).

2 Modern Slavery Act 2018 (NSW), s 4.

3 Modern Slavery Act 2018 (NSW), s 24(1)(a)-(b) (definition of 'commercial organisation').

4 NSW Department of Premier and Cabinet, Submission to the NSW Standing Committee on Social Issues, Inquiry into the Modern Slavery Act 2018 (NSW) and associated matters, June 2019, available here, p 6.

5 Modern Slavery Act 2018 (NSW), s 24(2), (6) – (7).

6 NSW Department of Premier and Cabinet, Submission to the NSW Standing Committee on Social Issues, Inquiry into the Modern Slavery Act 2018 (NSW) and associated matters, June 2019, available here, p 3.

7 Regulations, cl 9.

8 Regulations, cl 10(1)-(2).

9 Regulations, cl 6.

10 Regulation, cl 4(a)(2); 8(2)(a).

11 Regulations, cl 7(1)(a) – (g).

12 Amendment Bill, Item [10].

13 Amendment Bill Item [10].

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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