Gregory Ross, LLB Accredited Specialist at Eakin McCaffery Cox reviews the Draft Modern Slavery Regulation 2019 Explanatory Paper.
I attended a NSW Government briefing session 5 September 2019 to do with its Modern Slavery Act 2018 and (Draft) Regulation.
Having read the NSW Government’s Draft Modern Slavery Regulation 2019 Explanatory Paper in detail, I will now make some comments.
As you may know, the Australian Federal/Commonwealth Government passed its Modern Slavery Act last year. The New South Wales Government did so too.
The two had many inconsistencies. There was, for some months, some speculation as to whether the NSW legislation would have any role at all in light of our Commonwealth Constitution provision to the effect (very brief explanation) that where the Commonwealth makes a valid law, any inconsistent State laws fail.
The State and Federal legislation have different monetary thresholds as to application. The State legislation contain offences (apparently “to encourage” compliance), the Federal/Commonwealth did not.
I have to say I was very disappointed by the developments by way of the review which has taken place in respect of the NSW legislation.
Rather than speaking in terms of avoiding inconsistency with Federal/Commonwealth legislation, the seminar spoke in terms of “harmonisation” (pursuant to which, in short, compliance with the Federal/Commonwealth legislation will be considered as compliance with the state version).
The result is, in my view, something of a nonsensical mishmash.
In short, much of the Modern Slavery Legislation for the State of New South Wales is, in my view, in a state of fluxIn short, Hence, the State Government has resorted to industry consultation.
Industry Consultation & Calls for Submissions
The briefing I attended was an example of that.
There is also now a NSW Parliamentary Inquiry into the legislation, which has called for submissions on the State legislation, and State Draft Regulation. The call for submissions in respect of the legislation overall is 4 October 2019 of the closing date for comments in respect of impact on the chain of supply is 14 September 2019. The plan is that the Parliamentary Committee will report by February 2020 and the government will then consider its responses with a view to further revision of the legislation.
Needless to say, one of the submissions I personally will be making is that the consultation period and publicising of the legislation and its implications are so profoundly inadequate that it should be extended.
In my many years as a lawyer, and as a government legal practitioner at that, I am unable to remember any legislative reform paper as naïve in its grasp of the issues, let alone the practicality of operation of the envisaged provisions, as are the NSW provisions.
The scheme outlined in the draft Modern Slavery Regulation Explanatory Paper (NSW) leaves much to be desired and implemented, if it is to be effective as a tool to do with the ongoing scourge of modern Slavery.
Concerns that I have identified in respect of the proposed arrangements may not, of themselves, be relevant to every company’s operations in Australia but they include: –
1. That the proposals are silent on the extent to which Small to Medium Enterprises (SMEs) under the reporting threshold ($AU50 million for the NSW legislation and $AU100 million for the Federal/Commonwealth was legislation) can be required by entities covered by the legislation to check the details in their own chain of supply – the Federal/Commonwealth Guidance document implies so but there is really still nothing by way of detail to allow SMEs even to guess at compliance cost;
2. there is no guidance as to what protection from culling in expression of interest, replying to request for tender or contract procurement processes will be available for SMEs not in a position to provide detail in respect of slavery in its own supply chain;
3. there is nothing on to what extent complying with the reporting [and corresponding publication obligations] on slavery (especially in a name and shame context as is envisaged by the legislation) will be the subject of exemption from liability for defamation and the like [complicated more by the fact that for many chains of supply the actual ‘slavery’ is will be outside Australia and so beyond protection from any relevant Australian privative provisions to be inserted in the legislation;
4. with State Government entities (and a corresponding obligation applies for Commonwealth government entities, though I have not yet considered it) having something in the nature of obligations to report on antislavery in their chain of supply, I am concerned as to the extent to which the relevant provisions may be misused to exclude entities which have the capacity and expertise to deliver relevant goods and services at a good price but which, for one reason or another, do not deal with the Modern Slavery reporting mechanisms as well as some ideologues might want.
Another oddity is that if one is dealing with a company which is overseas, the obligation only extends to one’s chain of supply related to one’s business. It would not have any impact in a situation where, whilst the overseas company with which one is dealing might be acceptable process-wise, one happens to know that the owner/directors of the overseas company have household staff kept in circumstances amounting to forced labour/ slavery. To that, one can apparently turn a closed eye.
The situation remains something of a movable feast with commencement date for the New South Wales legislation and many practical issues still uncertain.
If you are interested in hearing more about the Modern Slavery Act 2018, consider attending Construction Law Defects, Disputes & Recent Developments, where the presentation will focus on modern slavery risks in construction in Queensland.