What and Why of Anti-slavery legislation
You may have read in the media of new Anti-slavery legislation. It can and will impact on business operations of many businesses, large and small..
Modern antislavery legislation has its origin in human rights developments and is not something that anyone is likely to disagree with.
However, the new legislation involves Business, not just Government, in the fight against slavery.
The new legislation, both NSW and Commonwealth versions, are very much aimed at using businesses as an enforcement method, rather than relying on diminished resources of the state.
“Slavery” is to be understood very generally and covers things like conduct of almost any type including slavery, servitude and/or forced labour to exploit children or other persons. It includes human trafficking, psychological control and circumstances where measures are taken to prevent or deter escape, coercion and the like. It very much involves making use of the goods or services of another without proper compensation. The legislation aims to protect men, women and children and reflects a prevalence of modern slavery in areas including domestic work, construction, manufacturing, agriculture, sex trade, personal services and even begging.
Modern slavery legislation as Australians see it has its origins in UK legislation, the Modern Slavery Act 2015 (UK) and New South Wales and the Commonwealth of Australia have, to varying extents, worked from that example. Many jurisdictions, including the United States of America, have a range of types of antislavery legislation. Other Australian States are expected to follow the same path.
There are, unfortunately, some significant differences between the NSW and Commonwealth of Australia legislative developments which are outlined below. Whist the legislation attaches only to commercial entities with largish turnovers, the legislation will also have impacts, up and down the chain of supply, especially where the supply is, in the end, to Government.
Government and commercial organisations caught by the legislation will probably impose the obligations contractually too on other smaller entities in the supply chain.
Who does it catch?
The legislation is very much aimed at requiring commercial organisations to look at their processes and their chain of supply with a view to identifying and reporting on identified “slavery” risk activity upstream or downstream in the chain of supply. It will include arrangements with related companies.
What do you have to do?
The legislation requires, in general terms, affected commercial organisations to check their own procedures and those of suppliers and persons to whom they supply to identify and be satisfied as to whether any prescribed “slavery” activity is involved. Where it is involved, there is an obligation to report it.
Next steps: –
• Determine whether the legislation is applicable to your organization;
• Check current human rights/modern slavery policies of your company and its suppliers;
• Get ready to be able to publish compliant modern slavery statements;
• Become familiar with the Commonwealth Law (when past) and the NSW regulations when in place
Industry Consultation on Draft Guidance – Commonwealth
Interestingly, the Commonwealth government at the end of March 2019 issued something of an industry consultation paper seeking comment on its draft Guidance for Reporting Entities.
Entities, large or small, wishing to comment on the Draft Guidance on Modern Slavery as issued by the Commonwealth government have until 19 May 2019 to do so. Please feel free to contact us if we can be of any assistance to you should you wish to make submissions in response to the draft Guidance.
It is interesting that the NSW and Commonwealth of Australia versions have totally different perspectives on offences. The NSW legislation involves not insignificant criminal offences and fines. The Commonwealth legislation has less in the way of offences affecting the commercial organisations.
Obviously both state and federal legislation leave in place pre-existing criminal sanctions relating to the many and varied types of activity considered to fall within “slavery”, as presently understood.
Quirks & NSW and Commonwealth Inconsistencies
The NSW Modern Slavery Act 2018 came into force in July 2018 but presently has not had regulations made pursuant to it which will be needed in respect of significant unresolved implementation detail.
The Commonwealth Modern Slavery Act 2018 is now in force and the draft Guidance issued very much outlines the processes which will be required for compliance with the legislation at a Commonwealth level.
Unfortunately the NSW and Commonwealth legislative instruments proceed on slightly different philosophical tangents , for example as to implementation and enforcement. With the finalisation of the NSW State election and swearing in of the new government, we anticipate that the state government’s position will be crystallised on various outstanding issues quite soon.
Operational Quirks & NSW and Commonwealth Inconsistencies
Threshold Commercial operation $50 million and staff in NSW Commonwealth $100 million
Enforcement mechanism NSW Commercial organisations to prepare modern slavery statements each financial year to contain such information as may be prescribed (in the absence of NSW regulation yet to be published the detail is not yet known). It is expected that the regulations will deal with the degree of due diligence to be required and the Commonwealth has issued Draft Guidance for comment by 19 May 2019
NSW Court can make orders
NSW State agencies to enforce legislation in its supply chain and report. Commonwealth Modern slavery statements to be provided to the Minister of Home Affairs within 6 months of the end of each financial year of each reporting entity and the Minister will maintain a public register of statements
Both NSW and Commonwealth Consultation with other entities related to or which a reporting entity owns or controls can in certain circumstances have joint reports
Penalties NSW Up to $1.1 million Commonwealth Nil (at this stage)
State and Commonwealth Action Check and report
Both State and Commonwealth legislation seems to envisage a degree of reliance on the efficacy of the central register of reports on slavery risks with the ability of ministers to name and shame non-compliant entities.
If you have any queries or wish to discuss any of the above, please contact your usual Eakin McCaffery contact or Greg Ross through the website, by email email@example.com or call Greg Ross 61 (02) 92653070.