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NSW acts against Modern Slavery
On 21 June 2018, the NSW Parliament passed the Modern Slavery Bill 2018 (Bill) to combat modern slavery. The Bill seeks to do so by a number of means, including by providing for an Anti-slavery Commissioner and providing for mandatory reporting of risks of modern slavery in corporate supply chains.
Under the Bill, “modern slavery” is defined by reference to particular existing criminal offences set out in NSW and Commonwealth law, including forced labour, human trafficking and debt bondage.
The Bill creates the position of an Anti-slavery Commissioner, who will have a primarily public advocacy role in combating modern slavery. Importantly, the Commissioner has no power to investigate particular complaints directly and is only partially independent from government. The focus of the Commissioner’s function is to promote advice and public awareness.
Reporting obligations for private sector in NSW
The Bill imposes annual reporting obligation on commercial, private sector organisations that have employees in NSW and which have an annual turnover of $50 million or more. At a minimum, these reporting obligations require organisations to publicly disclose their due diligence processes regarding modern slavery in their business and supply chains, as well as the steps taken to address any identified risks of modern slavery. The full scope of the reporting requirements for organisations will be promulgated under regulations, presumably after the Commissioner has been appointed. Penalties of up to 10,000 penalty units ($1.1 million) apply to organisations that do not comply with these reporting obligations.
The government has indicated that, during the implementation process for the Bill (presumably in regulations), it will ensure that small businesses with less than 20 employees who have annual turnover of $50 million or more will be given 18 months to comply with the new laws.
The potential overlap between NSW’s reporting requirements and those foreshadowed in the Commonwealth act, as well as those in other states and territories, is addressed by the Bill. The Bill relieves organisations who are subject to similar reporting obligations under the laws of other jurisdictions (as specified in the regulations) from having to comply with the NSW reporting requirements to avoid duplication of the reporting burden.
In connection with these reporting obligations, the Bill establishes a public register which will identify those organisations who have disclosed existing modern slavery practices or recognised risks of modern slavery in their supply chains.
Critically, the Bill does not require organisations to eliminate or minimise the risk of modern slavery in their supply chains, nor does it impose penalties on organisations that fail to act on modern slavery. The risk of reputational damage is the main form of deterrence. That said, under the Bill, the public register is only required to set out the modern slavery risks that are disclosed by an organisation voluntarily or through their reporting obligations.
Obligations on public sector in NSW
Public sector agencies are exempt from the reporting obligations. It falls to the NSW Procurement Board (through procurement policy) and the Auditor-General (through modern slavery audits), to ensure that public sector agencies address the risks of modern slavery in their supply chains.
In terms of next steps, once the Bill receives assent, the government is to appoint a commissioner and introduce relevant regulations setting out the scope of the annual reporting requirements, including any exemptions for small businesses.