The Skinny on the New South Wales Modern Slavery Act

It started as a private member's bill in February. Knowing the chances of most private members' bills, few people took it seriously. When the bill passed the Upper House of the NSW Parliament in April with a handful of amendments, more people started to take notice but still considered its chances of surviving the Assembly to be slim.

Then everything changed.

Those of us lobbying on this bill expected some of our amendments to be moved in one place or the other, but they weren't. Those watching this closely expected the bill to be heavily amended by the Government in the Lower House, but it wasn't. And many thought the Government would delay to buy time for a Modern Slavery bill to at least be introduced into federal Parliament, but they didn't. Instead, the NSW Modern Slavery Act has been a legislative locomotive that has defied expectations and taken everyone--the business community especially--by surprise.

With a small but strategic set of amendments, the Government returned the bill back to the Upper House, which passed it without further changes at midday on Thursday 21 June. Here is the skinny on what's in the bill, what's not, and what we might expect in coming months.

The Independent Anti-Slavery Commissioner

Whilst titled the "Independent" Anti-Slavery Commissioner, the role will be an executive level public servant. As such it lacks the same independence as that prescribed in the UK legislation, which holds footing over statutory agencies and reports to Parliament. However, all is not lost. Having a designated point person at the state level in Premier and Cabinet is a positive step forward as it will focus attention on what a state can do to address this issue-- not as a latent or occasional partner of federal actors, but as a proactive and consistent partner setting the vision for a more cohesive a strategic response to slavery. I have often said: Slavery is a federal offence, but it is a crime that occurs in communities and neighborhoods- we cannot fight it without proper engagement and indeed, leadership, from state and local stakeholders. 

Supply Chains

The supply chains provisions are a fascinating component of the bill and may be better described as clever political negotiation than anything else. On its face, this part lays out a reporting requirement for commercial organisations with annual financial turnovers of $50M or more. The Act proposes but does not require reporting against set criteria similar to those expected to be mandatory in the federal bill expected to be introduced into Parliament next week, and includes financial penalties of about $1M for failure to report.

Many are singing the praises of this section of the Act, saying it has set the bar for the federal bill; however, the key and perhaps not so obvious thing to note is that all of this is subject to change in the regulations. Key elements, including time frames for reporting, contents of company statements, how companies make their statements public, and grounds for any exclusions to reporting have been deferred to regulations; so the Act could end up being really strong or really weak.

What is more, the presence of financial penalties is not, in and of itself, a guarantee of "strong" legislation--especially with no clear idea of how many organisations the Act will actually cover (it is likely to be thousands) and what resourcing is likely to be allocated for monitoring and enforcement. As a close colleague of mine once said, penalties will only be useful if they are matched with a proportionate risk of getting caught. Notably, there is no sign of this in the NSW budget released this week.

Importantly, the section does not apply to any commercial organisation subject to obligations under a "corresponding law" of the Commonwealth, which one may logically conclude would include a federal Modern Slavery Act.Thus, this is going to be a waiting game and, while I may be wrong, my guess is we won't see any regulations before the federal Act is passed.

The Public Register

The public register is one of the weakest parts of the bill and is largely out of step with the prevailing discourse on the federal MSA focusing on "creating a level playing field for business" and fostering a "race to the top." I have been amazed at the unity amongst business and civil society toward accepting risk as a natural and unavoidable thing--which I expect to significantly shape the federal bill. Embracing risk accomplishes a couple of really important things: 1- it puts everyone on a more equal field; and 2- it makes it safe to be transparent. It also sets a foundation to support groups to manage their risk, which brings us together on the journey rather than putting us at odds.

While I appreciate the intention to create strong accountability for those who do not do the right thing, this provision sets the wrong tone and immediately puts the state government at odds with business.

First, the register will be managed by the Commissioner, which is something we have opposed from the beginning (both federally and in NSW) and was not supported by the UK Commissioner when providing evidence for the federal inquiry into modern slavery legislation. His opposition to playing any kind of policing role in the UK's reporting requirement was based on his experience that the independence of his role enables him to engage both business and government agencies in a way government cannot.

Secondly, because it will include only those organisations that disclose that their goods and services are, or may be, a product of modern slavery, the register is effectively a "dirty list". Not only does this undermine the positive narrative about risk; but it will also discourage companies from disclosing risk, which is out of step with the proposed reporting criteria in subclause (5) which seem to acknowledge that risk is inherent. A more logical solution would have been to publish all statements in a public register with clear listing of those groups that fail to report--a recommendation from the federal MSA inquiry. Of course, this would require knowledge of who has to report--something that does not appear to have been duly considered in the race to get this bill passed.

Government procurement

One of the more positive aspects of the Act is the a modest obligation for public procurement, where the Government Sector Finance agency must also report on steps taken to ensure goods and services procured by the state are not products of slavery. The Act provides for cooperation between the Auditor-General and the ANti-Slavery Commissioner which is also a positive thing. The first step we'd like to see the NSW Government take is a thorough risk assessment of its procurement so limited resources may be targeted for maximum benefit.

Modern Slavery Court Orders

Another very positive aspect of the Act is the addition of forced marriage into the eligibility criteria for Apprehended Domestic Violence Orders (ADVOs), adding another mechanism to protect people facing prospective forced marriages either in Australia or overseas. One of our arguments for the states taking on the issue of modern slavery has been filling gaps within the federal system or going beyond the federal system where there is a clear purpose and benefit. The states can do much more on forced marriage than pursuing objectives within the criminal justice system, including improving coordination between state and federal agencies in prevention of crime and protection of victims or people at risk. They can also extend support services to these individuals, train family and domestic violence service providers and lead public awareness and education initiatives.

This legislation was an opportunity to consider the issues along with ways for state services to act as a safety net for the many victims who never make it onto the federal support for trafficked people program: but again, because of its pace, the opportunity is lost for now.

The next step will be the regulations and working with the new Commissioner to ensure that implementation of the Act achieves its intended positive outcomes. Overall, I'm pleased. While it is far from perfect, the NSW Modern Slavery Act can and should be a game-changer for the national domestic response to modern slavery.

Read the full text of the bill as passed by both Houses here: https://www.parliament.nsw.gov.au/bill/files/3488/Passed%20by%20both%20Houses.pdf