Many commercial organisations may have sensed some relief on 1 July 2019 when the reporting period as set out in the draft Modern Slavery Act 2018 (NSW) (the Act) did not commence as anticipated. This was because the legislation has yet to come in to force.
Notwithstanding the Federal Modern Slavery Act 2018 (Cth) has passed and come into effect, those organisations with employees in NSW that supply goods and services for profit or gain and have consolidated revenue of between $50 million and $100 million in a financial year will have to continue monitoring the progress of the Act.
According to the Legislative Council Hansard – 19 June 2019, the Act in its current form contains several “defects” that require urgent attention.1 Hansard states that “the consequence of these defects are such that if left unattended…would render some provisions of the Act inoperable.” Consequently, the Act together with the amendment bill and the draft regulation were referred to the Standing Committee on Social Issues. No inquiry and reporting timeframe have been set; however, Parliament reconvenes in August.
Whilst a thorough and detailed consultation continues, there are several key steps organisations can take to help develop a modern slavery compliance framework and strengthen their reporting positions. These include:
- Updating existing codes of conduct, contracting arrangements and procurement policies to explicitly include compliance with the modern slavery legislation;
- Considering how risk-based due diligence frameworks should be adapted to address the identification of modern slavery risks;
- Mapping first tier supply chain networks, paying particular attention to the goods or services provided and geographical location(s) associated with those goods/services; and
- Applying a risk-based approach to identify and rank high risk industry sectors, locations, suppliers and other intermediaries.
Data analytics can be used as a powerful diagnostic tool to provide greater visibility across supplier relationships assisting to pinpoint risks of modern slavery. Organisations may then perform enhanced due diligence to establish information regarding suppliers’ businesses, extended beneficial ownership structures, adverse media reports, court rulings, social media chatter and other indicators to assist with understanding possible human rights abuses.
For more information on additional steps which may be taken to address issues of modern slavery risks, read The Taste of Modern Slavery – Part One and New modern slavery legislation already impacting corporate Australia.