Five steps to prepare for the Modern Slavery Act

The Australian Government is likely to introduce a Modern Slavery Act in 2018, following two inquiries in 2017. The proposed Act will require organisations with more than $50 – $100 million revenues to provide a public report on their actions to discover and fix any modern slavery problems in their operations or supply chains.

Deloitte’s 2018 Annual Review of the State of CSR in Australia and New Zealand  highlights that organisations are poorly prepared for the Modern Slavery Act. Low awareness among business is one problem. The likelihood of under-estimating the extent of the problem is another.

Many business leaders may be surprised or shocked to think there may be modern slavery in their businesses, but there are an estimated 40 million victims[1]. Up to two thirds are in the Asia Pacific region, where many Australian supply chains extend[2].

Exploitative labour practices in Australia have been associated with the construction, agriculture, manufacturing, hospitality, cleaning and domestic work sectors, as well as third-party labour suppliers[3].

By requiring organisations to be transparent about the extent to which they rely on vulnerable and exploited workers, the Government hopes to drive improvements to human rights practices in Australian supply chains. As the UK Independent Anti-Slavery Commissioner, Kevin Hyland OBE, points out:

“The trafficking of people and the exploitation of workers is only profitable insofar as somebody is willing to buy the goods that slave labour has produced.”

Businesses will need to get to grips with the requirements of the new Modern Slavery Act. The United Nations Guiding Principles on Business and Human Rights are a good starting point as the new Act draws on these principles. They spell out that businesses are expected to take adequate measures for the prevention, mitigation and, where appropriate, remediation of slavery.

Here’s five key steps to get your organisation ready for the Modern Slavery Act

  1. Map your supply chain.
    • Analyse spend, categories and location to potential modern slavery risks and identify efficiencies.
  2. Review or develop your policy commitment and management processes to meet the corporate responsibility with respect to human rights, including modern slavery.
    • For example, a Supplier Code of Conduct could encompass the following:
      • Respect for human rights.
      • Voluntary employment (no modern slavery).
      • Working conditions.
      • Wages and benefits.
      • Right to collective bargaining.
      • Appropriate training.
      • Health and safety.
      • Humane treatment.
      • Non-discrimination.
  3. Conduct a human rights risk assessment of your operations and suppliers.
    • Use data analytics to screen for hot spots, focus attention where it matters and increase the manageability of a response strategy.
  4. Assess suppliers’ current abilities to deal with human rights risks.
  5. Take steps to prevent, mitigate or remedy any potential or actual modern slavery from occurring including developing supplier engagement programs.

The Act could require companies to report publicly as soon as 2020, and many of our clients have started to act now to prepare themselves.

Download the State of CSR report here.

Contact Deloitte Sustainability Services:
Partner Paul Dobson
Principal Dr Leeora Black

Footnotes

[1]http://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_574717/lang–en/index.htm

[2]https://www.globalslaveryindex.org/findings/

[3]Trading Lives Report, JFADT House Committee, http://www.aphref.aph.gov.au-house-committee-jfadt-slavery_people_trafficking-report-full.pdf


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