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If your business has an annual turnover of $50 million or more, you will need to comply with the New South Wales (NSW) modern slavery laws. Unfortunately, there are an estimated 46 million people around the world who are victims of slavery. You may think that this is not relevant in Australia, but over 4000 workers in the country are thought to be exploited and essentially working as slaves. The government has recognised the need to address this issue, not only to combat slavery domestically but also play a part in reducing slavery on a global scale.

NSW introduced new modern slavery reporting requirements in 2018. This intends to encourage corporations to influence real change both in Australia and internationally, given their global supply chains. This article outlines the key features of the NSW modern slavery laws and offers some tips to help your business comply with the reporting requirements.

Overview of the 2018 Laws 

The objectives of the NSW modern slavery laws include:

  • combating modern slavery;
  • aiding the detection and exposure of modern slavery; and 
  • providing for an Anti-Slavery Commissioner. 

Modern slavery includes conduct that uses any form of slavery, servitude or forced labour to exploit children or other people. This accounts for actions both within your business and your supply chains, including government and non-government organisations.

You will be required to submit an annual modern slavery statement if you: 

  • have employees in NSW;
  • have an annual turnover of $50 million or more; and 
  • supply goods and services for profit.

Failure to comply with these requirements will incur a penalty of up to $1.1 million. 

Reporting Obligations 

If your organisation is captured by the NSW modern slavery laws, you will need to publicly release a modern slavery statement each financial year. This statement must contain certain information prescribed by the regulations, including: 

  • details of your entity, including its structure, the nature of its business and its supply chains; 
  • the risks of modern slavery practice taking place in your business or supply chains; 
  • the due diligence processes and actions your entity has taken to address and combat modern slavery in its business and supply chains. 
  • how you assess the effectiveness of any actions taken to mitigate slavery risks;
  • a description of your consultations with any entities that you own or control, concerning their business and supply chains;
  • how you have trained your employees to recognise and address modern slavery. 

Your business must: 

  • prepare and make this statement publicly available by lodging it with the Modern Slavery Commissioner within six months after the end of your financial year; 
  • ensure that any information provided in the statement is not false or misleading; and 
  • ensure the statement is approved by the principal governing body of your organisation

Tips on How to Assess Modern Slavery 

These requirements are a step in the right direction to tackling the global problem of modern slavery. If you are an entity that is required to comply with these reporting obligations, you must have a plan in place as to how you will go about preparing a modern slavery statement.

1. Know Your Business and Supply Chains

This may seem like an obvious point, but it is crucial that the person in your organisation responsible for preparing this statement has access to all internal information relating to your business and supply chains. You can do this by ensuring that all the managers and employees in each relevant stream of the business can prepare reports specific to their own departments.

You can then collate this information to prepare the final report. It is not practical for one person in a large organisation to have the necessary knowledge about all of your suppliers. Therefore, it is a good idea to make each sector of the business responsible for providing the necessary information. 

2. Due Diligence 

Once you have the information, it is also important to do due diligence to ensure the accuracy of this information. This is particularly important with respect to overseas suppliers. You need to understand: 

  • their business; and 
  • where and how they source the products and materials that they supply to you. 

This will help you identify where the risks are in your supply chains and put in place procedures to address those risks, including changing suppliers where you cannot adequately assess the risk. 

3. Subcontractors

You may not readily have access to all the necessary information about your suppliers’ and subcontractors’ internal practices. Therefore, it may be a good idea to start including provisions in your supply contracts and subcontracts that require the supplier or subcontractor to provide you with information about its business and supply chains. This will ensure that you have access to the information that you need to comply with your reporting obligations. 

Commonwealth 

The Commonwealth government has also introduced modern slavery laws which mirror the rules in NSW. However, federal laws apply to entities with an annual turnover of $100 million or more. 

You will only need to comply with one of the legislative frameworks. Therefore, if your turnover is between $50 million and $100 million, you will need to comply with the laws in NSW. If your turnover is $100 million or more, you will need to comply with the Commonwealth legislation. 

Key Takeaways

If your business has a turnover of between $50 million and $100 million, you will need to comply with the NSW modern slavery reporting requirements. This should include key information about your operations and supply chain, as well as measures you are taking to prevent the risk of slavery. Failing to comply with modern slavery laws could subject you to a financial penalty of up to $1.1 million. It could also damage the reputation of your business. If you have any questions regarding your reporting obligations under modern slavery laws, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

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