The Australian Modern Slavery Act – What does it mean for businesses?

The Australian Modern Slavery Bill has passed through both houses of the Australian Parliament and on 10th December 2018 received royal assent to become the Modern Slavery Act 2018.

In practice, the bill introduces a reporting requirement for Australian businesses with a turnover of >$100 million AUD, to produce an annual statement about what they are doing to combat modern slavery. Businesses operating in Australia will be required to publish a public Modern Slavery Statement on their actions to address modern slavery risks in their operations and supply chains. The law is expected to be in force in early 2019 and has built on other emerging legislation in other countries. The Australian Modern Slavery Act has gone a step further than the UK’s Act, whereby government departments that meet the turnover requirement also need to make a statement.


What is Modern Slavery?

‘Modern Slavery’ refers to any form of slavery, servitude or forced labour to exploit children or other persons (NSW Modern Slavery Act 2018) – where one person has taken away another’s freedom though use of threats, violence, coercion, abuse of power and deception (The Walk Free Foundation). It is estimated there are around 40.3 million people enslaved in the world today, with most of these victims located in Asia. Approximately 15,000 of these people are working in Australia.

Modern Day Slavery is not always obvious and can occur across all levels of supply chain, in both developing and developed countries, whether an organisation is aware or not. Modern slavery can occur in any industry, but is most prevalent in manufacturing, textiles, agriculture and adult entertainment. The aim of the bill is that it will help address and reduce instances of modern slavery.


Writing a Modern Slavery Statement

A Modern Slavery Statement needs to clearly set out the actions taken to address modern slavery risks in operations and supply chain and must be prepared within 6 months of the end of your reporting period (i.e. financial year). This includes reporting on your organisation’s:

  • Structure, operations and supply chains
  • Potential modern slavery risks in operations and supply chains
  • The actions taken to assess and address the risks including due diligence and remediation processes
  • The effectiveness of those actions.

While supply chains are long and complex, businesses can take straightforward actions to identify modern slavery and other human rights risks in their supply chain.

Use key data points – Using key data points will support writing your statement. This can include collecting data on your number of sites, their region, the number of workers in your supply chain and their gender.

Complete site audits – Site audits will help you identify issues of non-compliance regarding workers’ health and safety, their worker rights, environmental impact and business ethics. This will help you understand areas to focus efforts, where management systems can be strengthened and what corrective action plans can be developed using examples of best practice.

Create a programme to monitor supplier performance – Using a reporting tool will help you develop bespoke reports to monitor your suppliers, assess risks and help understand the root cause of any issues. There are many tools and technology solutions available to help you do this.

Gather as much information as possible – Request your suppliers to complete detailed Self-Assessment Questionnaires and collect information about, for example, the number, nationality and gender of employees, the percentage of seasonal workers, whether agency labour is used, the names of labour providers and what systems are in place to monitor labour providers. You can use this information to prioritise areas of modern slavery risk and develop targeted actions.


Actions business can take to proactively address modern slavery

  1. Map your supply chain, identify and assess the risks
  2. Create awareness and education within your company, stakeholders, suppliers and customers
  3. Audit your suppliers, but also build long-term strategic partnerships
  4. Increase supply chain transparency and leverage collaboration
  5. Use technology and data to empower your business with knowledge and make smart decisions
  6. Create a long-term strategy for action. Remember that responsible sourcing is about continuous improvement and legislation is there to help kick-start your journey one step at a time.


How Sedex can help

Sedex is a global membership organisation dedicated to helping companies drive improvements in their business practices within their supply chain. We have a wealth of experience working with businesses in the UK, following the UK Modern Slavery Act 2015, helping to map their supply chain, identity and manage risks. Our products and services enable companies to manage and self-improve their business’ performance and manage human rights and environmental risks that may be affecting their suppliers.

To find out more, you can contact Sedex on +44 (0)20 7902 2320 or [email protected] or read our Modern Slavery Guide.

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