How will the NSW Modern Slavery Act affect you?
Most Australian entities will now be aware that the Modern Slavery Act 2018 (Cth) (Commonwealth Act) commenced on 1 January 2019.
However, you may not be aware that the NSW government has recently passed its own Modern Slavery Act 2018 (NSW) (NSW Act), which will commence on 1 July 2019.
Obligations under the Commonwealth Act
Under the Commonwealth Act, entities based or operating in Australia which have AU$100 million or more in annual global revenue must report annually on their efforts to address modern slavery in their operations and supply chains. "Modern slavery" constitutes things such as human trafficking and child labour.
Entities covered by the Commonwealth Act are required to provide a "Modern Slavery Statement" every year. The Minister will publish these on a Modern Slavery Statements Register, which is available to the public online.
In preparing a Modern Slavery Statement, a covered entity is required to:
- identify the risks of modern slavery practices in their own operations and those of their supply chains as well as the supply chains of any subsidiary entities they may have;
- describe what actions the covered entity (and any subsidiary entities it may have) has taken to assess and address those risks; and
- assess the effectiveness of such actions.
What will change under the NSW Act
Whilst the Commonwealth and NSW Acts have many similarities, the NSW Act has a wider range than the Commonwealth Act. It applies to entities which:
- are not government agencies;
- have employees in New South Wales;
- supply goods and services for profit or gain; and
- have a total turnover in a financial year of $50 million or more.
The requirements for Modern Slavery Statements under the NSW Act will be set out in regulations which are yet to be passed. However, the information required under the NSW Act is likely to be very similar to that required under the Commonwealth Act.
One of the criticisms of the Commonwealth Act is that it currently does not contain any penalties for non-compliance.
However, under the NSW Act, if an entity fails to prepare a Modern Slavery Statement under the NSW Act, the maximum penalty is $1.1 million.
How should you prepare for the NSW Act?
To prepare for the commencement of the NSW Act, you should consider whether there is any risk of modern slavery arising from your (and your subsidiaries') operations, as well as those of their business partners and suppliers.
We would suggest that all entities do this, even if they believe that they are likely to be below the threshold for either or both of the Commonwealth Act and the NSW Act.
Some examples of NSW entities whose operations may be at risk of modern slavery are:
- schools who have their uniforms manufactured by third parties overseas
- importers of sea food from Thailand or Burma
Entities should also consider reviewing their contracts with third parties as to whether those contracts include a provision relevant to modern slavery.
Please do not hesitate to contact us if you have any questions about the Commonwealth Act or the NSW Act.