On 14 October 2021, the NSW Government introduced the Modern Slavery Amendment Bill 2021 (MSA Bill) before Parliament. This article provides an update on the progress of commencement of the Modern Slavery Act 2018 (NSW) (NSW Act) and the key amendments proposed in the MSA Bill.
Status of Modern Slavery legislation in NSW
The NSW Act was originally passed in NSW Parliament in June 2018. However, the legislation is yet to commence, with the NSW Government's position being that the NSW Act should not be commenced in circumstances where there are inconsistencies with the Commonwealth Government's modern slavery legislation, the Modern Slavery Act 2018 (Cth) (Federal Act), which was introduced to Federal Parliament in June 2018 (three weeks after the NSW Act was introduced) and commenced in January 2019.
In August 2019, the NSW Act was referred to the Legislative Council Standing Committee on Social Issues for the remediation of any inconsistencies between the NSW Act and the Federal Act. The Committee's Final Report was released in March 2020.
The MSA Bill is largely reflective of the issues identified in this report.
Key provisions of the MSA Bill
The MSA Bill sets out that the NSW Act is to commence on 1 January 2022. This allows applicable stakeholders an opportunity to interpret the operational changes that the MSA Bill proposes and allows some time to establish the office of the Anti-slavery Commissioner in NSW.
Repeal of reporting requirements from NSW Act (and reporting threshold)
The Federal Act sets out that the turnover threshold for an entity to be captured by the mandatory annual modern slavery statement provisions is a consolidated revenue of at least $100 million per annum.
The NSW Act previously set this threshold at $50 million per annum. However, the MSA Bill proposes to remove the reporting requirements within the NSW Act, meaning that entities operating in NSW will only be required to prepare a modern slavery statement for the purposes of compliance with the Federal Act where they meet the Federal Act's threshold criteria.
This is a key change as NSW entities with consolidated revenue of less than $100 million per annum will not be required to prepare a modern slavery statement. However, an entity may still volunteer to prepare a modern slavery statement.
Amendments to the definition of 'government agency'
The definition of 'government agency' for the purposes of the government sector procurement obligations in the NSW Act is proposed to be amended, courtesy of the MSA Bill.
Under the current NSW Act, a government agency includes state-owned corporations and Corporations Act companies that have a shareholding Minister. The MSA Bill proposes to remove these entities as government agencies.
The reasons for this (as set out in the second reading speech) include that the NSW Government policy is to "treat State-owned corporations the same as commercial organisations". Further, it was identified that including corporations under the Corporations Act with a shareholding Minister would result in "a potentially very broad scope", with entities such as "publicly traded companies that Ministers may be shareholders of" being captured.
Application to local councils
The NSW Act allows the Auditor-General to perform a "risk-based audit of all or any particular activities" of a government agency (as defined) to ensure those activities are not a product of modern slavery. The MSA Bill amends the definition of government agencies for these provisions to exclude local councils.
The rationale for this (as per the second reading speech) is that it is not appropriate for local councils to be subject to these audits in the context that they are not subject to the NSW Procurement Board Directions.
The NSW modern slavery laws will, as a result of the NSW Bill, more closely align with the Federal modern slavery laws, providing clarity for NSW businesses and government agencies.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.