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Slavery is more prevalent today than at any point in human history and, just as in earlier eras, businesses are complicit both directly and indirectly in perpetuating abuses. The 2018 Global Slavery Index conservatively estimates that on any single day in 2016, 40.3 million people were victims to some form of modern slavery including forced labour, bonded labour, and human trafficking. Additionally, the International Labour Office (ILO) estimates that in 2016 there were 152 million victims of child labour globally, of which almost half were in hazardous work. Profits from modern slavery add up to $150 billion annually.
This is a world-wide crisis and is not limited to third world nations. In Australia alone, there are more than 15,000 victims living in conditions of modern slavery found predominantly in industries such as agriculture, construction, domestic work, meat processing, cleaning, hospitality, and food services.
Even if your company’s own operations are free from conditions of slavery, victims of human rights abuse can be hidden in your supply chain, directly linking you to enslavement. The UN Guiding Principles on Business and Human Rights describe three types of business complicity:
Australia’s Modern Slavery Act
In November 2018, Australia introduced the Commonwealth Modern Slavery Act, creating a transparency requirement for Australian entities with annual consolidated revenue of more than AU$100 million. The Act came into effect on 1 January 2019. It requires organisations to submit a public statement with the aim to drive businesses to take responsibility for and address labour exploitation in their supply chains. The first public statements are due from 1 July 2020. Statements must describe the operational and supply chain structure, the modern slavery and child labour risks, organisation’s policies, processes and due diligence in addressing and mitigating those risks and the method by which effectiveness of these actions is assessed.
In addition to the federal Act, the NSW Modern Slavery Act passed in June 2018 but is not yet enacted. Based on the NSW Act, entities with a lowered revenue threshold of AU$50 million will be required to report and failure to provide a complying statement will incur a financial penalty.
It’s time to act now
Non-compliance with the Commonwealth legislation exposes companies to a number of significant risks:
In order to meet obligations under the Commonwealth Modern Slavery Act, companies need to act now and take a series of steps over three horizons (see the figure below). Impact of these steps will manifest in organisations’ readiness in response to the Act:
A key driver for successful organisational transformation is sustainable change which arises from careful assessment, design and implementation of strategies, whilst adopting a long-term perspective. Consistent effort and progress needs to be made towards eradicating human exploitation from the supply chain operations. Altering policies and standards cannot happen overnight; now is the time to take action to prepare your business and reduce your risk of contributing to the global modern slavery crisis.
Tina is senior business transformation professional with an emphasis on embedding ethical and sustainable supply chain and procurement practices, whilst achieving strategic cost reductions. She primarily works with asset intensive industries and industrial products. Tina is passionate about digital innovation and embedding sustainable business change through collaboration and coaching.