NSW Modern Slavery Act to commence operation in the new year

On 19 November 2021, the New South Wales Parliament passed the Modern Slavery Amendment Act 2021 (Amendment Act). It received assent on 29 November 2021 and will commence on 1 January 2022.

Most significantly, the Amendment Act repeals the modern slavery reporting obligations for NSW businesses contained in the Modern Slavery Act 2018 (NSW) (NSW Act). This means there will continue to be one supply chain transparency regime for Australian businesses as prescribed in the Commonwealth Modern Slavery Act 2018 (Cth) (Commonwealth Act), which notably does not impose financial penalties for non-compliance.

Background

The NSW Act was originally passed in June 2018, three weeks prior to the Commonwealth Act’s introduction to Commonwealth Parliament, but did not enter into force at that time. In late 2019, in response to concerns about inconsistencies between the NSW Act and the Commonwealth Act, the NSW Government commissioned a report by the NSW Legislative Council Standing Committee on Social Issues (Standing Committee) into the NSW Act and associated matters

In its final report delivered to the NSW Parliament in March 2020, the Standing Committee made 17 recommendations that included “that the NSW Government work with the Australian Government to seek harmonisation of the reporting threshold, ideally at $50 million consolidated revenue, as a key reform for a standard national approach to modern slavery”. On receipt of the report the Government stated its commitment to implementing a modern slavery regime in NSW, and supported this recommendation in principle and made it clear they would enter into discussions with the Commonwealth with a view to achieving this harmonisation.   

The Amendment Act was finally introduced in June 2021 and after further amendments was passed on 19 November 2021. It received Royal Assent on 29 November and will commence on 1 January 2022.

Repeal of modern slavery reporting for commercial organisations in NSW

One of the most significant amendments to the NSW Act is the repeal of section 24 – the requirement for commercial organisations to prepare modern slavery statements and report on steps taken to assess and address risks of modern slavery in their supply chains and operation.

There are two key features of this section of the NSW Act that were inconsistent with the Commonwealth Act.  The first of these was the reporting threshold which in the NSW Act was $50 million annual revenue, significantly less than the Commonwealth $100 million consolidated revenue requirement. The second related to criminal penalties, with the former provisions of the NSW Act including fines of up to $1,100,000 for failing to publish a statement or providing false or misleading information while the Commonwealth Act does not include financial penalties.

Although the Standing Committee had recommended the NSW Government push for harmonisation with the Commonwealth Government,  the Government has withdrawn the supply chain transparency requirements altogether.  As a result, the only supply chain transparency regime currently in place in Australia is under the Commonwealth Act.  

Key features of the amended NSW Act

While the amended NSW Act does not require supply chain transparency reporting, it does require NSW State-owned corporations who are otherwise not required to report under the Commonwealth Act to volunteer to do so in accordance with section 6 of the Commonwealth Act.

The remaining key features of the amended NSW Act include the establishment of an Anti-slavery Commissioner (Commissioner) and its functions, some of which include:

• promoting public awareness of, and advising on, modern slavery and its effect on victims (s 12(a));
  
  
• encouraging reporting of instances of modern slavery, including through the establishment of a hotline (s 12(c), (d));
  
  
• monitoring reporting of modern slavery risks occurring in the supply chains of government agencies (s 9(1)(e)); and
  
  
• monitoring the effectiveness of due diligence procedures against modern slavery in government procurement (s 25).

Alongside these features, the amended NSW Act also provides the Commissioner with enhanced access to information by:

• removing civil liability for whistleblowers who submit information or documents to the Commissioner (whether the liability arises under contract or otherwise), or who are exposed to liability by complying with a requirement under the NSW Act (s 16); and
  
  
• empowering the Commissioner to request information relating to modern slavery or victims of modern slavery from the Police Commissioner (s 35).

Looking ahead

While NSW businesses with a turnover of $50 to $100 million will not need to prepare a modern slavery statement under the NSW Act, those with an annual consolidated revenue of over $100 million will remain subject to the modern slavery reporting obligations under the Commonwealth Act.

NSW State owned corporations will need to volunteer to report under the Commonwealth Act and, if they have not already, should commence the work to identify, assess and address risks of modern slavery in order to equip themselves for reporting.

For those not required to report, consider in any case that where the NSW government is procuring goods and services, businesses are likely to be subject to ongoing modern slavery risk due diligence and monitoring by the Commissioner.