Businesses will suffer commercially if they fail to address modern slavery, experts said this week. 

Speakers at our webinar, Modern Day Slavery and your responsibilities for your Supply Chain, said taking a proactive approach is not only the right thing to do, it makes business sense.   

Ai Group’s National Manager - Workplace Relations Policy Nicola Street said: “You just won’t be competitive if you are unable to demonstrate how your organisation identifies and reduces modern slavery risks from your operations and supply chain.

"Modern slavery due diligence is now embedded in a large number of procurement and supplier agreements.” 

Modern slavery encompasses:  

  • human trafficking 
  • slavery
  • servitude
  • forced labour 
  • debt bondage 
  • forced marriage,
  • deceptive recruiting for labour or services, and
  • the worst forms of child labour. 

Lucienne Manton, the Department of Foreign Affairs and Trade’s Ambassador, People Smuggling and Human Trafficking, said no country is immune to modern slavery — including Australia. 

“Modern slavery crosses borders and touches all parts of the globe,” she said. 

“It affects the world’s most vulnerable people. According to the 2017 Global Estimates, produced by the International Labour Organization, an estimated 40 million people are victims of modern slavery and human trafficking globally.  

“More than 24 million of those victims are in forced labour.” 

COVID-19 has worsened the problem. 

“We have a risk exposure to modern slavery around the world through our increasingly complex business supply chains and the goods and services we use and consume,” Ms Manton said. 

“We know anecdotally, with some statistics now coming through confirming, that Covid has increased the risks of exploitation for those most vulnerable to being victims of modern slavery.” 

Ms Manton said modern slavery can occur in any industry and sector. 

“This makes it really important that government, business and civil society all work together to address these crimes,” she added. 

“Awareness of the issue is growing in governments, in the private sector and among consumers around the world. But we know that awareness, understanding and a willingness to act are not universal. Neither government, business, international organisations and civil society can do this alone.” 

The Australian Government established the Modern Slavery Act in 2018 to drive private sector action to combat modern slavery in supply chains of Australian goods and services. 

Under the Act, any entity operating in Australia with an annual revenue of over $100million must report annually on global operations and supply chains. 

They must provide a written Modern Slavery Statement, which is displayed publicly on an online register maintained by Australia Border Force. 

“This disclosure-based system creates a practical, risk-based framework for transparency that supports businesses to respond to modern slavery and increases information available to consumers and investors,” Ms Manton said.  

“The Act also requires the Australian Government to report. The Government’s first statement was published in December 2020 and the second statement was released this morning (December 1).  

“The Government took a targeted, risk-based approach to assessing and addressing modern slavery risks in our supply chains and operations. 

“Our first statement focused on four key high-risk areas:  

  • investment 
  • textiles procurement  
  • overseas construction and  
  • cleaning and security services. 

“Our second statement added ICT hardware as a fifth high-risk area. 

“There is an expectation that businesses will submit robust and comprehensive statements to gain reputational rewards. Conversely, businesses that take a minimum compliance approach may find themselves exposed.” 

Ms Manton acknowledged it was no easy task. 

“The transparency and reporting framework depends on business and government understanding their supply chains but with increasingly complex supply chains, that’s not always easy,” she said.  

“Few know as much about their supply chains as they should. 

“Countries are often sourcing from many countries, some where there are open and transparent systems and others where there are more closed systems that can make an assessment of forced labour risks difficult. 

“Working with the private sector and internationally to raise awareness and develop capacity is therefore critical.  

“Australia recognises that no single country can tackle these issues alone and we continue our longstanding engagement with partners in the region to help build and strengthen legal and policy frameworks to counter trafficking and forced labour.  

“In the Indo-Pacific region, Australia and Indonesia work closely together as co-chairs of the Bali Process on People Smuggling, Trafficking in Persons and Related Transnational Crime.” 

The Federal Government also works closely with business to address modern slavery. 

“In 2021, the Global Organised Crime Index showed that human trafficking is the largest criminal economy in the world,” Ms Manton said. 

“A significant proportion of proceeds from modern slavery is transacted and laundered through the formal financial system. 

“Financial systems institutions can therefore play a vital role in helping to identify trends that may be linked to money laundering and/or modern slavery.  

“This is why Australia is working with the Finance Against Slavery and Trafficking initiative to engage with the finance sector regarding tools to address these issues.”  

Ms Street said The Australian Industry Group is assisting members who have reporting responsibilities under the Act.  

“For smaller business who may not be required to report, the reporting framework itself provides that structure that a lot of larger businesses are framing questions of their suppliers about how they address slavery,” she said. 

“In the business context, the issues we like to highlight are those of deceptive recruitment practices and debt bondages – practices that businesses may not realise they are being exposed to, based on the contractors they may be engaging with. 

“Most businesses who engage in modern slavery do so unknowingly and unintentionally, so it’s about creating that visibility that businesses should have. 

“We are hearing reports now of smaller organisations being asked about their anti-slavery practices, which, to our thinking, is a sign that the framework is having good effect. Entities that don’t meet that $100million threshold may voluntarily report under the framework. We are seeing some businesses do that.” 

Ms Street said that as a minimum, businesses should ensure they have been briefed about modern slavery by asking:  

  • what it is 
  • what the reporting framework requires and  
  • what, as a supplier, you should expect from your commercial dealings with others. 

 It is important to review internal policies and processes such as: 

  • creating an anti-slavery policy 
  • engaging with, or creating your own supplier codes of conduct 
  • setting up a management system to ensure you’re dealing with reputable suppliers. 

“All these measures go a long way in helping to identify slavery risks and reduce them,” Ms Street said 

“Ultimately, building that supply chain visibility, particularly for larger organisations, is something that we’re seeing a lot of businesses do, under this reporting framework. 

“Ai Group is encouraging businesses to look at it thoroughly. You just won’t be competitive if you are unable to demonstrate how your organisation identifies and reduces modern slavery risks from your operations and supply chain. Modern slavery due diligence is now embedded in a large number of procurement and supplier agreements.”  

However, Margaret Stuart, Head of Corporate Affairs & Sustainability - Nestlé Oceania, said businesses cannot rely on reporting to cover their responsibilities. 

“Reporting doesn’t replace due diligence and it’s not appropriate to rely solely on suppliers to tell us what’s happening,” Ms Stuart said. 

“Audits have limitations so we ned to strengthen the action plans we have in place.  

“Reporting should guide action. Reporting aids transparency but reporting won’t replace taking action and it won’t protect you from there being human rights abuses in your supply chains.  

“So, be thoughtful when you go to your suppliers with questionnaires; be thoughtful of your own intentions and your plans to act on that and make sure that you start out knowing what might be found so that you’re looking for the problem that might be there; not looking for a clean tick.  

“Because when you look for a clean tick, you won’t find the problems that are genuinely there.” 

Mapping your supply chain is an important place to start, Ms Stuart said. 

“You need to know who your suppliers are but then you need to ask where they’re getting supply from, as well. Once they’ve shown you the policy, the next question is: How are you monitoring it? What are you doing about breaches? 

“Modern slavery and human rights affect the real lives of men, women and children, so you need to identify where your risks are.”  

Ms Street said concerned businesses should report their finding to the police. 

“If you have a credible suspicion that a modern slavery crime is taking place, particularly of slavery, then notifying the Australian Federal Police is recommended rather than trying to resolve it yourself," she said.

“You do need to be sensitive about confidentiality and not put that person or people at further harm. That should be the key priority, that it’s not just about the business’s position on slavery. It’s about what is in the interests of the people being affected. 

“If you’re seeing signs, or red flags, of potential slavery such as very poor working conditions, poor WHS, the confiscation of passports or employees living together, then we would be asking questions.” 

Webinar moderator James Scotland, General Manager of Ai Group’s MESCR (Minerals, Energy & Supply Chain Resilience), said businesses should build awareness and action into their procurement processes.  

“Put it into your supplier expectations but also look at the risk in the extensive supply chain. It’s not just direct suppliers, it’s the whole process of your supply chain that you should be aware of,” Mr Scotland said. 

Ms Street added: “It will take time, but we’re confident we’ll see supply chain visibility increase as a result.” 

 

Wendy Larter

Wendy Larter is the Senior Content Writer at Ai Group. She is a journalist with more than 20 years’ experience as a reporter, features writer, contributor and sub-editor for newspapers and magazines including The Courier-Mail in Brisbane and Metro, News of the World, The Times and Elle in the UK.