The NSW Modern Slavery Act 2018 (NSW Act), consultation draft of the Modern Slavery Amendment Bill 2019 (Draft Amendment Bill) and consultation draft of the Modern Slavery Regulation 2019 (Draft Regulation), were referred to the Standing Committee on social issues on 6 August, as was foreshadowed in our previous article. In parallel, the NSW Department of Premier and Cabinet has released an Explanatory Paper: Supply Chain Reporting Requirement for Business explaining the intentions of the NSW Act and the Draft Regulations.
What is the Inquiry going to consider?
The Inquiry will consider the following key issues as outlined in the Terms of Reference:
- the operation of the NSW regime, including the effect on business and the intended application of the NSW regime to charities and not-for-profit organisations, State Owned Corporations and local councils
- whether the Commonwealth Modern Slavery Act 2018 (Commonwealth Act) renders parts or all of the NSW Act redundant or amendments are needed to address gaps or inconsistencies
- the risk of constitutional challenge to the NSW Act due to inconsistencies with the Criminal Code Act 1995 (Cth)
- unintended consequences of the NSW Act, including the Human Tissue Act 1983 (NSW)
- the appropriateness and enforceability of the modern slavery risk orders that courts would be able to make to prohibit a person from engaging in modern slavery conduct under the current form of the NSW Act.
Key aspects of the Draft Amendment Bill and Draft Regulation
There are numerous proposals outlined in the Draft Amendment Bill, Draft Regulation and Explanatory Paper. The key aims of the proposed Draft Amendment Bill and Draft Regulation are to:
1. Clarify the application of the NSW Act to organisations required to, or volunteering to, report under the Commonwealth Act
As previously reported, there has been confusion as to whether organisations which are required to or volunteer to report under the Commonwealth Act, would also have an obligation to report under the NSW Act. It is proposed under the Draft Regulation for the Commonwealth Act to be prescribed as a ‘corresponding law’ under the NSWAct. The practical impact is that commercial organisations with a turnover of between $50 million to less than $100 million will need to report under the NSW Act while organisations with at least $100 million consolidated revenue must report under the Commonwealth Act but not the NSW Act.
There is a separate exemption proposed under the Draft Regulation for organisations who choose to voluntarily report under the Commonwealth Act. It appears an organisation will not be subject to the NSW Act’s financial penalties for failure to prepare a modern slavery statement or failure to make such a statement public provided it complies with the Commonwealth Act and has given a copy of its Commonwealth modern slavery statement to the NSW Anti-Slavery Commissioner. Notably, it is proposed they will still be subject to the financial penalty in the NSW Act if they knowingly provide false or misleading information.
2. Introduce exemptions and clarify position for NSW owned corporations
Other exemptions are planned for:
- corporate Commonwealth entities or Commonwealth companies under the Public Governance, Performance and Accountability Act 2013
- state-owned or controlled corporations or agencies in another state or territory
- certain charities and not-for-profit organisations
- organisations with less than 20 employees.
The Draft Amendment Bill proposes to bring NSW owned corporations into the reporting regime for ‘commercial organisations’ under the NSW Act.
3. Create consistency with the Commonwealth Act
The mandatory criteria of the NSW modern slavery statement and the deadline to prepare and provide the NSW modern slavery statement proposed under the Draft Regulation are the same as under the Commonwealth Act.
The NSW Department of Premier and Cabinet has stated it will release guidance materials to businesses.
Interested stakeholders may now make submissions to the Standing Committee on social issues. For information on how to make a submission, click here. Submissions are due by 4 October 2019.
Interested stakeholders may also make separate submissions to the Department of Premier and Cabinet into the technical design of the supply chain reporting scheme as outlined in the Draft Regulation. Submissions details are here. Submissions are due by 13 September 2019.
As the Commonwealth Act is already in force, organisations caught by that regime should be well on their way to developing a compliance strategy. Our Practical Action Plan provides details on steps your organisation should be taking for compliance and we have been helping our clients with these steps.
The Practical Action Plan may also be helpful for organisations caught by the proposed NSW regime given the proposal to align the NSW and Commonwealth Acts under the Draft Regulation and Draft Amendment Bill.