While the Commonwealth Modern Slavery Act 2018 is in force, the future of the NSW Modern Slavery Act hangs in the balance. As we reported in our previous article, due to concerns including constitutional issues and duplication and inconsistency with the Commonwealth Modern Slavery Act, the NSW Modern Slavery Act will be referred to the Standing Committee on Social Issues for its inquiry and report – with opportunity for submissions.

Last week, Interim NSW Anti-Slavery Commissioner, Professor Jennifer Burn, gave a briefing on the status and future of the NSW Modern Slavery Act for the Property Council of Australia.

During the briefing, Professor Burn reiterated that this inquiry will take place with many issues on the table (including whether the Commonwealth Modern Slavery Act renders the NSW Act redundant). She also gave some insights into how the NSW Modern Slavery Act is intended to operate (subject to the results of the inquiry and the question of whether the amendment bill and draft regulation in relation to the NSW Modern Slavery Act will be passed).

What are the plans for the NSW Act?

Ultimately the fate of the NSW Modern Slavery Act will depend on the outcomes of the inquiry and how the NSW Government responds.

However, Professor Burn reported at the briefing the intention is for the NSW and Commonwealth Acts to be complementary. The NSW Modern Slavery Act requires organisations that have employees in NSW, supply goods or services for profit and have an annual turnover of at least $50 million but less than $100 million, to provide a modern slavery statement.

The NSW Modern Slavery Act reporting threshold differs from the $100 million consolidated revenue threshold that applies for the Commonwealth Modern Slavery Act. The details of the NSW scheme will be contained in the draft regulations, with some guidance materials also to be provided. These materials have not yet been released but the draft regulations are expected to be available for public comment through the Standing Committee on Social Issues inquiry.

What will an organisation reporting under the NSW Modern Slavery Act need to put in its modern slavery statement and when will it need to provide the statement?

According to Professor Burn, the proposal is for the NSW Modern Slavery Act to have the same seven mandatory criteria as the Commonwealth Modern Slavery Act. For details on these seven mandatory criteria, please see our Practical Guide.

Like the Commonwealth Modern Slavery Act, Professor Burn said that the intention is for the reporting organisations in NSW to provide their modern slavery statement within six months after the end of their financial year or accounting period.

What if an organisation is covered by both the NSW and Commonwealth regime?

According to Professor Burn, the intention is for organisations with a consolidated revenue of over $100 million to only report under the Commonwealth Modern Slavery Act. Under the current form of the NSW Modern Slavery Act, for such organisations to be exempt from reporting under the NSW regime, the NSW Government would need to recognise the Commonwealth Modern Slavery Act as a ‘corresponding law’. However, this issue is subject to the outcome of the Standing Committee on Social Issues Inquiry. Organisations who meet the reporting threshold for the Commonwealth Modern Slavery Act should continue to develop a compliance strategy consistent with the draft Guidelines released by the Commonwealth Government.

Can an organisation that is within the NSW Modern Slavery Act reporting threshold of $50 million to $100 million volunteer to report under the Commonwealth Modern Slavery Act?

One of the major differences between the current drafting of the NSW Modern Slavery Act and the Commonwealth Modern Slavery Act, is the proposed NSW Modern Slavery Act has provisions for financial penalties for non-compliance, whereas the Commonwealth Modern Slavery Act, already in force imposes no such sanctions.

According to Professor Burn, volunteering to comply with the Commonwealth Modern Slavery Act does not prevent exposure to the penalties under the NSW Modern Slavery Act. She also stated organisations who volunteer to comply with the Commonwealth Modern Slavery Act, but are captured by the NSW Modern Slavery Act, will also need to copy their modern slavery statement to the NSW Anti-Slavery Commissioner. While such an organisation would not risk being liable for a penalty under the NSW Modern Slavery Act for a failure to prepare or publish a modern slavery statement, it could still be liable for a penalty under the NSW Modern Slavery Act if its statement was false or misleading.

What about NSW government agencies?

NSW government agencies are exempt from providing a modern slavery statement under the current form of the NSW Modern Slavery Act, which is subject to review by the Standing Committee on Social Issues Inquiry. However, according to Professor Burn, the intention is for the NSW Modern Slavery Act to address government procurement. The NSW Modern Slavery Act in its current form provides that the NSW Anti-Slavery Commissioner must consult with the Auditor-General and NSW Procurement Board to monitor the effectiveness of due diligence procedures in place to ensure that the procurement of goods and services by government agencies are not the product of modern slavery. The intention is for the Auditor-General to be able to conduct an audit of the activities of a NSW government agency to decide if the government agency is ensuring that goods and services procured are not the product of modern slavery. Further, it is proposed that NSW government agencies be required to take reasonable steps when procuring goods or services to ensure that they are not the product of modern slavery and to report on these steps annually. The intention is for the Procurement Board to be able to issue directions on what constitutes 'reasonable steps'.

What about the hotline for modern slavery victims?

In line with the overarching objects of the NSW Modern Slavery Act to provide support for victims of modern slavery and detect modern slavery cases, the NSW Modern Slavery Act in its current form states that the NSW Anti-Slavery Commissioner will provide a hotline to give advice and assistance to people who may be victims of modern slavery.

What's next?

There will no doubt be future interesting developments when the NSW Modern Slavery Act, amendment bill and the draft regulation are referred to the Standing Committee on Social Issues for its inquiry. Watch this space.

How can we help?

While the state of play for NSW is still in flux, we can help by:

• conducting threshold assessments regarding which Act or Acts apply to your organisation;
• advising on the operation of the Commonwealth Modern Slavery Act and the NSW Modern Slavery Act as it currently stands;
• developing end-to-end Modern Slavery compliance programs;
• assisting with drafting contractual clauses which deal with the issue;
• assisting with responses to questions about Modern Slavery in tender documents;
• drafting complementary policies and procedures (such as a Supplier Code of Conduct, Modern Slavery and Human Rights Policies);
• developing educational materials for staff and/or boards (who need to be informed given they are required to sign off on reports); and
• keeping you informed about developments in this space and the potential impact on your organisation.

^Disclaimer

^{This Article details non-binding remarks made by Professor Burn. They are her views and comments only. Ultimately, the actual legal obligations under the NSW Modern Slavery Act will be decided by the NSW Government and NSW Parliament following the Inquiry.}

^{Those potentially impacted by the NSW Modern Slavery Act should put in place steps to monitor the development of the NSW Modern Slavery Act.}

^{Organisations covered by the Commonwealth Modern Slavery Act should be well on their way to understanding their obligations under the Commonwealth Modern Slavery Act and putting in systems and processes to comply with that regime. Please see our Practical Guide for more information.}