01 October 2020
The New South Wales Government (Government) has responded to recommendations made by the NSW Legislative Council’s Standing Committee on Social Issues’ (Committee) inquiry into the Modern Slavery Act 2018 (NSW) (NSW Act).
The Government reaffirmed its commitment to implementing a modern slavery regime in NSW and achieving greater harmonisation with the Commonwealth Modern Slavery Act 2018 (Cth) (Commonwealth Act).
The first recommendation proposed by the Committee was that the Government amend the NSW Act in line with the recommendations of the report and with the aim of the Act commencing on or before 1 January 2021. The Government supported this recommendation in principle, while noting that the following principles would guide amendments to the NSW MS Act:
The Government noted that amendment of the NSW Act and its commencement would occur after the conclusion harmonisation talks with the Commonwealth. It is unclear whether it is feasible for this work to be completed on or before 1 January 2021 which was the timeframe proposed by the Committee, but this seems unlikely.
Many of the recommendations relating to supply chain reporting for business have been noted and are subject to the outcome of those harmonisation discussions.
One of the most critical issues for business is the lower threshold proposed by the NSW Act, which stands at $50 million in contrast to the $100 million reporting threshold currently in the Commonwealth Act. Perhaps remarkably, the Government supported-in-principle Recommendation 5 of the Committee’s report that the reporting threshold should ideally remain at $50 million consolidated revenue. Harmonisation at this threshold would require a significant ‘key reform for a national standard approach to modern slavery’ and require many more entities having to undertake the necessary due diligence to identify, assess and address modern slavery in their operations and supply chains.
Further recommendations to strengthen the Act are noted and dependent on harmonisation discussions with the Commonwealth. The recommendation to identify a relevant authority who would be responsible for conducting prosecutions for breaches of the NSW Act is likely to be adopted provided penalties survive the harmonisation process. To date, the Commonwealth has been disinclined to introduce penalties, relying instead on a ‘race to the top’ and reputational pressure to drive compliance.
Recommendations regarding criminal offences in the Act were all noted, again subject to harmonisation discussions with the Commonwealth. The final three Recommendations in the report were on the subject of victim support and were all supported-in principle. These included:
The Government’s positive response to the Committee’s report will be welcomed by modern slavery advocates. The commitment to encouraging a lower reporting threshold, the penalties for non-compliance and an inclination to use these higher standards to encourage reform at a Commonwealth level could serve to strengthen Australia’s already relatively strong supply chain transparency regime. Developments will be interesting to follow.
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