Consorting laws aimed at cracking down on organised crime and outlaw motorcycle gangs are being used by NSW police to tackle minor crimes and are hitting vulnerable groups including Aboriginal people, children and the homeless, according to a damning report by the state's ombudsman.
A three-year review of the laws, conducted by the ombudsman's office, also found an "exceptionally high police error rate" in relation to warnings issued to children and young people.
Professor John McMillan, the acting NSW Ombudsman, called for sweeping changes to ensure the laws are directed to serious crime and to allay public concerns that they are being used to clamp down on minor offences.
The O'Farrell government passed controversial new consorting laws in April 2012 following a spate of gun violence involving bikies and organised crime groups.
They substantially increased the existing penalties for consorting – habitually associating with convicted criminals – where a formal warning had already been issued by police.
The maximum penalty for consorting under the new laws is three years' jail, up from six months.
A $16,500 fine, up from $400, may also apply in addition to, or instead of, jail time.
The Ombudsman's review found more than three-quarters of the consorting warnings issued about children and young people were "unlawful as they relied on a mistaken belief that the person was a 'convicted offender' at the time".
Aboriginal people, comprising just 2.5 per cent of the total NSW population, were also over-represented, accounting for 38 per cent of all people who were issued with an official warning.
Consorting with family members is a defence to the crime but the report said some police officers failed to "recognise concepts of kinship consistent with Aboriginal cultural practice when considering if the people consorting were 'family members' ".
There was also evidence that police were using the laws to crack down on minor and nuisance offences, such as crimes around public walkways and public transport hubs, where a range of other laws could have been used.
This included a case in which two homeless men were issued with consorting warnings for yelling at passers-by.
The Ombudsman's office recommended 20 changes to increase the fairness of the laws, including amending NSW Police policy so that the operation of the laws is focused on serious crime and closely linked to crime prevention.
They also recommended children and young people be removed from the application of the laws.
Professor McMillan said unless the changes were made "it is likely that the consorting law will continue to be used to address policing issues not connected to serious and organised crime and criminal gangs and in a manner that may impact unfairly on disadvantaged and vulnerable people in our community".
The laws were unopposed by the NSW Labor Opposition when they were introduced into Parliament.
Shadow attorney-general Paul Lynch said on Thursday the report showed "glaring examples of anti-consorting laws doing what the government said they wouldn't".
"The government said they were to fight organised crime," he said. "They also operate unfairly against people who should never have been the intended target."
He urged the government to commit to the Ombudsman's recommendations to "stop the unintended and unfair application of these laws".
A NSW government spokeswoman said it would "carefully consider the Ombudsman's report and take advice on its contents and recommendations".
