AU, Commercial disputes, Litigation

NSW modern slavery regime will change in the new year (2022) – here is what you need to know

NSW Modern Slavery Act 2018 – background

Parliament passed the NSW Modern Slavery Act 2018 (Act) on 21 June 2021

but delayed commencement due to concerns about inconsistencies between the NSW regime and the Federal modern slavery regime (Federal Regime). Following various amendments and a report by the NSW Legislative Council Standing Committee on Social Issues, the Modern Slavery Amendment Act 2021 (Amendment Act) received royal assent on 29 November 2021. The Amendment Act and Act are set to commence on 1 January 2022.

Key changes in the Amendment Act

Reporting obligations for private companies

Most importantly, the Amendment Act repeals sections of the Act under which private entities with a turnover of more than $50 million would have been obliged to prepare a modern slavery statement. Consequently, private companies will no longer be obliged to publish modern slavery statements under the NSW regime (as was previously contemplated under the Act). This means only the Federal Regime will contain reporting obligations for companies, thus reducing any inconsistency between the Act and the Federal Regime (in particular, the different reporting thresholds).

The Federal Regime places reporting obligations on companies with an annual consolidated revenue of more than $100 million. These reporting obligations require companies to give an annual modern slavery statement (Statement) to the Minister for Home Affairs concerning (amongst other things):

  1. The risks of modern slavery in a company’s operations and supply chains
  2. The actions a company takes to assess and address any such risks
  3. The process for assessing the effectiveness of such actions
 

Companies with an annual consolidated revenue of less than $100 million may voluntarily report on their modern slavery risks, but they are not obliged to do so.

Penalties for failing to report

The Act previously contemplated criminal penalties and fines of up to $1 million for failing to comply with reporting obligations. The Federal Regime does not impose financial penalties for failing to provide a Statement.

Key features of the Act and Amendment Act

Organisations subject to the Act and Amendment Act

As companies will no longer be required to report under the Amendment Act, the Act will apply only to the NSW government, councils and state-owned entities. The Act will focus on uncovering and removing modern slavery practices from the supply chains of government entities.

Establishing a NSW Anti-slavery Commissioner (Commissioner)

The Amendment Act reaffirms the establishment of the Commissioner and its functions. The Commissioner will be central to the modern slavery regime in NSW. The key functions of the Commissioner will include:

  1. Identifying and providing assistance for victims of modern slavery
  2. Monitoring reporting concerning modern slavery in government supply chains. The focus on supply chains will mean companies who engage with government agencies will be subject to scrutiny by the Commissioner
  3. Monitoring the effectiveness of legislation and government policy in addressing slavery
  4. Raising community awareness of modern slavery
 

Facilitating cooperation between the Commissioner and other NSW agencies

The Amendment Act provides that certain state agencies must cooperate with the Commissioner in the exercise of the Commissioner’s functions. For example, where the Department of Social Services provides support to a person who has been the victim of slavery, the department must cooperate with the Commissioner in any investigation that arises.

The Act also permits the Commissioner to bring information to the attention of the Commissioner of Police, the Ombudsman, the Secretary of the Department of Communities and Justice or any other investigative or government agency. 

Removing civil and criminal liability for whistleblowers

Under s 16(2) of the Act, a person who provides the Commissioner with “information, a document or other thing” is protected from civil liability.

Section 16(1) also protects a person from criminal prosecution (other than under the Act) for providing information or complying or purporting to comply with the Commissioner (for example, if the provision of information would lead to a NSW criminal data or privacy breach).

Companies should also be mindful that there might be other offences caused by not providing information or otherwise being involved in or turning a blind eye to modern slavery in their supply chains (such as under Criminal Code Act 1995 (Cth) s 270.3(2) and s 316 of the Crimes Act 1900 (NSW).

Impact for NSW companies

  • Companies with an annual consolidated revenue of less than $100 million will not be required to make a modern slavery statement. Companies with an annual consolidated revenue of more than $100 million should be conscious to continue reporting under the Federal Regime
  • The Act incentivises whistleblowing and encourages cooperation with the Commissioner. Companies should be aware of how these provisions will affect whistleblowers within their organisation (such as employees)
  • Companies should be aware of the role of the Commissioner in bringing information to relevant law enforcement authorities
  • Companies who are engaged in business with the NSW government in any capacity may still be subject to supply chain monitoring under the scope of the Commissioner’s powers
 

Further Information

For more information about legal and regulatory issues surrounding modern slavery, contact Trevor Withane:

Further Information

For more information about personal guarantees, banking litigation and dispute resolution contact Trevor Withane

Disclaimer

Ironbridge Legal’s communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication.