For many in most civilized western nations, the idea of slavery is a concept rooted in history, but the reality is that forms of slavery still exist today – usually as oppressive working conditions for workers who have no alternatives for income. Consider the various sweatshops around the world that manufacture designer apparel or the food that requires workers to brave dangerous environments to gather. These practices exist because consumers rarely consider the supply chain that makes goods and services possible. As a result, child labor, forced labor, and human trafficking are allowed to flourish – even in western countries. Australia, however, is the most recent country to take a stand with its proposed Modern Slavery Act.
Combating Slavery in Australia
According to the Global Slavery Index, there are an estimated 4.3K modern slaves in Australia. One raid on Australia’s largest tomato producer in recent years revealed 180 workers living and working in oppressive conditions. One recent modern slave in Australia described working 18-hour days with no days off and having to live in a filthy basement. The Australian Modern Slavery Act is meant to combat this growing issue.
During the discovery process, the Australian government conducted a series of consultation roundtables with over 100 business and civil society organizations late in 2017. Questions during the roundtables included concerns about defining “modern slavery”, the creation of a reporting entity for modern slavery, setting a revenue threshold requirement that must be met before requiring reporting, and more. The Australian government also invited written submissions. Well known brands, like adidas, submitted their input:
For adidas Group, we conceptualise modern slavery in broad terms, to include overlapping issues and concerns related to forced labour, migrant labour and the eradication of the worst forms of child labour.
What the Modern Slavery Act Means for Global Supply Chains
The proposed Modern Slavery Act includes mandatory supply chain reporting for organizations operating in Australia with annual revenue of AUD50 million or more, regardless of where the organization’s headquarters are located. To comply, any entity that meets the revenue threshold and does business in Australia would need to issue an annual modern slavery statement that is approved at the board level and signed by a director (or equivalent) within five months of the end of the Australian financial year. Minimum details that would have to be reported on include:
- the organization’s structure, its business and its supply chains;
- its policies in relation to modern slavery;
- its due diligence and remediation processes in relation to modern slavery in its business and supply chains;
- the parts of its business and supply chains where there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk;
- its effectiveness in ensuring that modern slavery is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate;
- the training about modern slavery available to its management and staff; and
- any other actions taken.
Penalties for failure to comply are still being discussed, but organizations should expect a serious monetary impact considering the topic. As with GDPR and sustainability, companies should work closely with their supply chain managers to ensure proper mapping of the entire supply chain and compliance with all domestic and international rules and regulations. Draft legislation is expected to be released in the first half of 2018.
In a global economy, companies cannot afford the risk of working with suppliers that do not comply with important endeavors, like fighting modern slavery – especially when the punitive damages can directly affect your bottom line. Avetta offers a streamlined solution for vetting your supply chain partners before you do business. Prequalify suppliers based on safety, sustainability, certifications, regions, and more. Avetta gives you deep insight into your supply chain, allowing you to have more control over your risk profile.
Learn more about Avetta’s Sustainability Evaluations at https://www.avetta.com/clients/sustainability