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Expert Series: Leading Beyond Compliance with the Australian Modern Slavery Act

Expert Series: Leading Beyond Compliance with the Australian Modern Slavery Act

About the Author:

With over twenty-five years’ leadership experience in the not-for-profit sector including local church leadership, education and training, humanitarian work, and social entrepreneurship, both in Australia and overseas, Stephen brings an engaging and refreshing perspective in addressing modern slavery.

Known for his depth of insight, unique perspective and engaging presence, Stephen draws upon lessons learnt from his practical experience as a leader, and also his work in academic research. He also uses his cross-cultural leadership experience to help people develop critical skills in a global marketplace.

Stephen has engaged in academic research on human trafficking in sexual exploitation and modern slavery for his Doctor of Ministry through Fuller Theological Seminary. He completed this in April 2016 while developing a social enterprise to combat Modern Slavery in Madrid, Spain. The aim of Stephen’s final dissertation is to address the socio-economic issues surrounding human trafficking in Europe, and to engage men specifically to develop prevention and intervention strategies to combat this issue.

As Co-founder and CEO of Unchained Business Services Pty Ltd, Stephen is now training and equipping Australian organisations to be leaders in addressing modern slavery in their supply chains and operations. He facilitates masterclasses, workshops and coordinates projects to stimulate, inspire and guide people to have a positive engagement with modern slavery.

Stephen also currently serves on the advisory board of the Freedom Business Alliance, a global network of social enterprises helping survivors of modern slavery rebuild their lives through vocational training and meaningful employment.

The views expressed in this article are the author’s considered opinion

There is a legislative movement growing globally that aims to stimulate the corporate world to be transparent and take responsibility for the risk of modern slavery in their supply chains and operations. Since 2010, the State of California, the United Kingdom, France and Netherlands have implemented laws that require companies to ensure that extreme forms of exploitation, including child labour are not part of their supply chains. These laws vary in strength, but they were enacted with the common intent to mitigate the risk of slave-like working conditions. 

This legislative movement has landed in Australia, but interest is growing elsewhere including Canada, New Zealand, Singapore, Hong Kong and Germany. Overall, this movement is part of a growing desire to implement the UN Sustainable Development Goals, as well as to stimulate business excel in environmental, social and governance (ESG) non-financial growth factors. 

Modern Slavery Act 2018

In 2018, the Australian Modern Slavery Act 2018 (‘the Act’) was introduced, bringing a new era of compliance to the business community of Australia. It calls upon large organisations, some 3,000, to investigate the risk of modern slavery in their supply chains and operations, and to state their strategy to mitigate the risk through a mechanism of continuous improvement, transparency, and reporting. When assessing risk, the intent of this law is act upon the risk of modern slavery as it pertains to workers, rather than the company itself. 

Although targeting organisations with an annual consolidated revenue of $100M+, the Act is also impacting smaller entities who are part of the supply chain of larger organisations. On March 31, 2021, those companies, with a July-to-June financial year, will be required to report on the actions they have taken in the previous financial year. They will need to show what they have discovered about the risk of modern slavery to their business, and what plans they have put in place for continuous improvement. For, unpacking modern slavery risk is a complex endeavour requiring analysis, investigation, consultation and collaboration. It cannot be resolved quickly, and very few companies can every claim they are ‘slave-free’ 

In Australia, Modern Slavery Statements are published on a public register with the Australian Border Force under the auspices of the Minister for Home Affairs. 

Modern Slavery Risk

Modern slavery is an umbrella term comprising forced labour, extreme forms of child labour, domestic servitude, forced marriage and human trafficking, among others. It is a human rights violation that affects more than 40 million people globally. 61% of survivors are in forced labour; working on farms, in factories and fisheries (cf. Anti-Slavery Australia) and two-thirds of these are based in South-East Asia. Profits from forced labour alone are estimated to be around US$354 Billion. In essence, “modern slavery is the commodification of people for the purpose of exploitation and financial gain’” (Unseen UK, Anti-Slavery Day, 2018). 

Modern slavery is also a problem in Australia, with the Australian Institute of Criminology estimating there are at least 1,900 people living and working in slave-like conditions. Many NGOs place that figure conservatively at 15,000 (cf. Global Slavery Index). Hidden in plain sight, modern slavery exists in agriculture, horticulture, mining and construction, and in services such as hospitality, domestic service, nail salons, carwashes, cleaning services and security. 

Consider the following typical scenario: a woman in Dhaka, Bangladesh, Chameli, who is paid 51 cents an hour to make clothes for big brands in Australia. Chameli has worked since she was 11. She’s now a mum of 3 girls aged 5, 12 and 14. However, due to the cycle of poverty, her 14 years old has also started working, while the other two miss-out on school (cf. Oxfam). 

But it’s not just women and girls. In Australia, there’s the story of Abdul, a 35-year-old construction worker from Indonesia who was offered a contract in Australia at the award wage. Thinking this was an opportunity to earn money to provide an education for his four children, he came to Australia to work. However, with no English, no Australian qualifications and no safety briefing, he worked on a construction site in Canberra six days per week, earning $250 – of which $100 was taken back by his employer to cover accommodation on his remote farm. Abdul says he was not given any information about working conditions and fair rates of pay (cf. Anti-Slavery Australia).

Indicators of Modern Slavery and Covid-19

There are many indicators of modern slavery, including low pay or no pay; extremely long working hours and days without a break; the forced keeping of passports; onboarding fees leading to borrowing and debt bondage; WHS issues including unsafe and unclean machinery, workspaces, air, water and lack of PPE. People have no right to form a union or speak out. 

On their own, these indicators do not always equate to modern slavery. They point to the risk of modern slavery as well as to other forms of exploitation experienced by temporary and workers in Australia. 

There are more than 1 million temporary workers in Australia, who are currently at risk of being exploited by employers because of a lack of support during Covid-19 pandemic. According to a recent (September 2020) report, “As If They Weren’t Human”, (cf. Migrant Worker Justice Initiative), out of 6,000 respondents, 70% of temporary workers, mostly international students, have lost their jobs or have experienced a significant loss of income, and many cannot find support from family overseas to live here or travel back home. The full impact of Covid-19 is yet to be seen on global supply chains. However, it is well documented that increases in poverty, debt bondage, and hunger are on the rise.

An Ethical Business Challenge

Modern slavery presents an ethical challenge for many organisations who are largely unaware of where their products come from, how they are made and what are the real conditions of workers. According to Luis C. deBaca (Former US Ambassador-at-Large to Monitor and Combat Trafficking in Persons), “it’s not a question of if, but where and to what extent there is slavery in your supply chains and operations.” 

When the Rana Plaza in Dhaka, Bangladesh collapsed on 24 April 2013, killing more than 1,100 factory workers and injuring 2,500 more, it brought worldwide attention to the plight of many workers, who suffer substandard working conditions in order to make the products we purchase. However, through its Sustainable Development Goals and Guiding Principles on Business and Human Rights, the UN has put a mandate before governments and companies to improve the entire ecosystem of supply chain management. 

Aside from the legislative mandate for entities needing to comply with the Modern Slavery Act, there is a business case for implementing the Act whether involuntarily or voluntarily. 

Remain competitive in the market. Many companies are now being required to demonstrate compliance in order to tender and maintain business with large corporations and state governments. 

• Improve your reputation. Many customers and investors are making human rights practices a priority alongside an organisation’s environmental footprint (cf. ACSI and RIAA, Modern Slavery Reporting – Guide for Investors (2019). Companies have the opportunity to improve their reputation and be a leader in the market. 

Mitigate financial and legal risk. There is direct financial impact and legal risks involved in not addressing the risk of modern slavery. In particular, the impact of Covid-19 is being felt in global supply chains. 

Improve staff morale. Generations Y and Z are fast becoming the largest cohort of employees. They prioritise purpose over profit and are looking for purposeful employment experiences. (cf. CEO Magazine, Is your workplace ready for Gen Y and Gen Z? 2019). 

Five Tips for Business with the Modern Slavery Act

As mentioned above, the impact of modern slavery legislation will not only be felt at the big end of town. There will be a knock-on effect for smaller entities. As they comply, they will also ask their immediate tier 1 suppliers to comply as well. This is already happening in Australia. 

Given this, here are five tips for business to prepare to take action:

1. Be informed about the issues of modern slavery and use the Modern Slavery Act as a vehicle for change within your organisation – engaging staff, contractors and suppliers responsibly, and learning to identify the risk. 

2. As a supplier to large corporations, it is important to resist making any statutory declaration that you are ‘slave-free’ in order to tender for business. The Modern Slavery Act does not expect this. Rather, companies are asked to be transparent about the current risk of modern slavery and commit to taking reasonable steps to mitigate this risk.

3. Take steps to improve your operations to include a supplier code of conduct, modern slavery clauses in supplier contracts, and identify where the risk of modern slavery might be in the products you buy to run your business. The best place to start is a gaps analysis process. 

4. Publish your own Position Statement on Modern Slavery on your website to signal your intention to meet compliance and reveal your efforts. See this as a working document that you improve over time as you learn and understand more.

5. Be receptive to whatever support, training, sources, supplier platforms and tools your BSB clients offer to help you retain and tender for business. At Unchained, we believe that making an impact on modern slavery is about collaboration and knowledge sharing  and showing leadership through capacity building and resourcing those down the supply chain. 

Unchained Business Services Pty Ltd is a for-purpose enterprise based in Sydney, Australia. 

Unchained inspires Australian businesses to be leaders in making an impact on modern slavery. Their end-to-end bespoke suite of services is designed to help companies not only comply with the law, but to lead beyond compliance. 

For more information, please contact Unchained Business Services at info@unchained.net.au. Our website http://www.unchained.net.au also contains information for what to do if you suspect an instance of modern slavery.