NSW Government procurement under increased scrutiny for modern slavery risks

Cilla Robinson
31 Aug 2023
Time to read: 2.5 minutes

NSW Government entities should assess and comprehensively address any current modern slavery risks in their operations and supply chains, and engage in responsible procurement.

Last month, the NSW Anti-Slavery Commissioner's first Strategic Plan, "Working together for real freedom", came into effect. The Plan will lead to increased scrutiny of procurement practices in the NSW Government.

The Modern Slavery Framework in NSW

The Modern Slavery Act 2018 (NSW) requires:

  • State owned corporations (SOCs) to make annual modern slavery statements in accordance with the Modern Slavery Act 2018 (Cth). These modern slavery statements must describe, amongst other things, the risks of modern slavery within the reporting entity's operations and supply chains, and the actions taken to address those risks. Statements are made publicly available on the Australian Government's Online Register, with SOCs also required to publish a copy on their website; and
  • within their annual report, Government Sector Finance Agencies (including SOCs and State Government departments and agencies) to include:
    • a statement of its steps to ensure the goods and services it procured during the financial year were not the product of modern slavery; and
    • if applicable, a statement of its action in relation to any significant issue concerning its operations, as identified by the NSW Anti-Slavery Commissioner.

The NSW Anti-Slavery Commissioner is tasked with monitoring the above reporting and combatting modern slavery more generally, with the Commissioner's key objectives and priorities set out in a Strategic Plan.

The NSW Anti-Slavery Commissioner's Strategic Plan and priorities

The new Strategic Plan outlines the key priorities for the NSW Anti-Slavery Commissioner's work between 1 July 2023 and 30 June 2026:

  1. building prevention capacity, by ensuring entities can identify vulnerability to modern slavery and prevent victimisation. The Commissioner plans to do this by equipping frontline workers and establishing a support and referring hotline;
  2. enabling remedy, by improving access for people with lived experience to an effective remedy and fostering survivor leadership;
  3. fostering responsible business practices, by showing leadership and addressing modern slavery in supply chains. The Commissioner plans to do this by removing products of modern slavery from public procurement and fostering responsible business practices in the private sector;
  4. changing the narrative, by making the case for anti-slavery initiatives through raising awareness across NSW and building business and policy cases for anti-slavery; and
  5. developing a community of purpose to lay the foundations for effective implementation of the NSW Act.

In preparing this Plan, the Anti-Slavery Commissioner reflected on the fact that certain products (such as rubber gloves and solar panels) bought by Government buyers and with public funds appear to be made through modern slavery. Accordingly, the third priority, fostering responsible business practices, is targeted at NSW Government.

Essentially, the Commissioner aims to "leverage the NSW Government’s procurement ‘superpower’ to move the dial on modern slavery". It will do so by:

  • collaborating with stakeholders across NSW public procurement (including SOCs and government departments and agencies) to develop education and training to strengthen responsible procurement practices;
  • consulting with the NSW Procurement Board and Auditor-General to monitor the effectiveness of due diligence procedures. The Procurement Board can issue directions or policies to agencies about reasonable steps they must take to ensure procurement practices do not involve modern slavery, while the Auditor-General may audit agency procurement activities to assess modern slavery risk; and
  • facilitating collaboration between business and government to address challenges in high-risk supply chains.

Dealing with the risk of modern slavery in NSW Government procurement

With increased scrutiny on their procurement for the next three years, Government entities should ensure they assess any current modern slavery risks in their operations and supply chains, comprehensively address those risks, and engage in responsible procurement going forward.

This involves:

  • undertaking due diligence during the procurement process, including by considering any Modern Slavery Statements prepared by possible suppliers in accordance with the Federal Act;
  • being alive to the modern slavery risks involved in procuring goods from high-risk locations or in high-risk sectors (including by reference to the Global Slavery Index); and
  • ultimately obtaining contractual commitments from the supplier that it will take steps to eliminate or minimise the risk of modern slavery in the goods or services it and its sub-suppliers provide.

Agencies must otherwise comply with any relevant directions or policies issued by the NSW Procurement Board.

Reporting obligations

Finally, we encourage Government entities to comply with their reporting obligations under the NSW Act. This is critical in circumstances where the Anti-Slavery Commissioner will this year publish a public register which names and shames any SOC who fails to prepare a Modern Slavery Statement under the Federal Act, and any agency that does not comply with directions of the NSW Procurement Board.

Please contact us if you have any questions about what these changes mean for your organisation, or if you require any support with your modern slavery reporting and compliance obligations.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.