The Global Slavery Index 2018 indicated a high risk of modern slavery in many countries that are key Australian trading partners, with whom Australian business have supply chains and/or subsidiary operations.
In 2018, the Australian Government passed the Commonwealth Modern Slavery Act 2018 (the Act), which came into effect on 1 January 2019. The Act aims to increase awareness of modern slavery and reduce risk of Australian companies engaging in modern slavery practices in their production and supply chains.
Industries with higher risk of modern slavery include retail, manufacturing, food and beverages. In particular, mid-sized business that don’t have comprehensive risk-based compliance programs in place will be at higher risk of non-compliance with Modern Slavery laws.
What is modern slavery?
Modern slavery, in its simplest terms, refers to exploitation of a person for the gain of another person/group and often leaves the person feeling trapped in unethical conditions.
Modern slavery happens at the most extreme end of the working spectrum, involving the gravest abuses of human rights and serious crimes. Outlawed under the Criminal Code, modern slavery is also often a precursor to, or goes hand-in-hand with, other criminal activity.
Modern slavery can involve:
- forced or bonded labour
- deceptive recruiting for labour
- sexual exploitation
- human trafficking
- child labour
- debt bondage.
According to the Australian Human Rights Commission, sectors where modern slavery is most widespread include agriculture, construction, electronics, fashion, hospitality and mining.
Key steps a business can take
- Review operations and supply chains to identify and assess risks of modern slavery, including gaps in existing frameworks e.g. ethical sourcing
- Assess effectiveness of internal controls to prevent modern slavery and new controls for additional risks identified (for example wage audits, employment screening, ethical sourcing reviews, human rights and OH&S audits)
- Due diligence and surprise audits of supply chain, including site visits of factories
- Training and communications to ensure staff and suppliers are aware of the new legislation, including how to identify ‘red flags’ of potential modern slavery and report it
- Prepare a Modern Slavery Statement.
How we help
Businesses need to take precautions in order to ensure they are not passively involved in modern slavery. We help clients review the risk of modern slavery as part of a broader risk management strategy.
We view the introduction of the Modern Slavery Act as an opportunity for companies to get to know their supply chain better, helping them both reduce risk and identify opportunity to extract commercial value.
Our experienced team successfully delivers risk frameworks and assessment engagements for our clients, as well as conducting supply chain optimisation programs.
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