The NSW Parliament yesterday passed the Modern Slavery Bill 2018. It is now awaiting assent and a commencement date, however businesses should not wait and begin planning for the new obligations.

Supporting regulations will follow that deal with the finer details even without these, businesses should now urgently consider whether they will be caught by this legislation and consider how they are going to meet their compliance obligations. There will be significant maximum penalties applying to breaches of obligations.

Will this legislation apply to your business?

The legislation will apply to any commercial organisation who:

  • has employees in NSW; and
  • supplies goods and services for profit or gain; and
  • has a total turnover in a financial year of the organisation of not less than $50 million or such other amount as may be prescribed by the regulations.
What are your key obligations?
  1. Preparation of a complying modern slavery statement for each financial year.
    The statement is to contain such information as may be required by regulations as to steps taken by the organisation during the financial year to ensure that its goods and services are not a product of supply chains in which modern slavery is taking place. Without limiting those requirements, the regulations may require a modern slavery statement to include information about the following:
    – the organisation’s structure, its business and its supply chains
    – its due diligence processes in relation to modern slavery in its business and supply chains
    – the parts of its business and supply chains where there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk
    – the training about modern slavery available to its employees. Regulations will prescribe the timeframe for preparing the statement after the end of the relevant financial year.
  2. The organisation must make its modern slavery statement public in accordance with the regulations.
  3. The statement must not provide information that the organisation knows, or ought reasonably to know, is false or misleading in a material particular.

Each of these obligations is subject to a maximum penalty of 10,000 penalty units ($1.1 million) for failure to comply.

How does this interact with the foreshadowed Federal Modern Slavery legislation?

We have not yet seen any draft legislation federally, although it has been foreshadowed.

The NSW legislation provides that the reporting obligations do not apply if the organisation is subject to obligations under a law of the Commonwealth or another State or a Territory that is prescribed by the NSW government as a corresponding law. Presumably this is intended to deal with the overlap of any Commonwealth legislation in this space. However, based on recent statements by the Federal Minister, that legislation seems unlikely to have penalties attached to the reporting obligations and will only apply to organisations with a turnover of more than $100 million, so it is possible it won’t be prescribed and our clients will need to comply with obligations under both regimes (which are largely but not entirely overlapping).

We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

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