Modern slavery, otherwise known as forced labour, is far more common than many people realise. And, if that forced labour happens within your business, or as part of your supply chain, it can have significant ramifications. Modern slavery laws are there to help businesses and their contractors tackle this issue. In this context, workforce compliance becomes even more important to your organisation is to reduce its risk in this area.
What is Modern Slavery?
Modern slavery is used to describe any situation where coercion, threats or deception are used to exploit victims and undermine their freedom. It includes the likes of trafficking, debt bondage and child labour and happens in several sectors with agriculture, construction, domestic work, hospitality and manufacturing being particularly high risk.
As an area of serious exploitation, it stands to reason that there are laws in place to protect victims against modern slavery. What’s more, as well as the damage to victims themselves, modern slavery can distort global markets, undercut responsible business and pose a significant legal and reputational risk.
What Modern Slavery Laws Aim to Achieve
Australia’s Moderns Slavery Act was implemented by the Federal Government in 2018 as part of its global leadership role in combating modern slavery. The law aims to prevent modern slavery by making larger businesses more accountable for the practices of their suppliers. All businesses with a revenue of more than $100 million fall under the act, although smaller companies may also report voluntarily.
Under the act, entities have to report on the risks of modern slavery within their operations and supply chains and have to put in place actions to address those risks. As well as obviously being the humane approach, complying with modern slavery laws also makes good business sense. It enables companies to improve the integrity and quality of their supply chains and increase profitability.
The Risks of Non-Compliance
Exposure to modern slavery within your supply chain creates substantial risk. Not only is tackling modern slavery morally and ethically the right thing to do, but non-compliance can have profound implications:
- Reputational – as more businesses and individuals become aware of necessary actions in this space, non-compliance risks damaging your brand identity. It’s vital to be seen as an ethical employer and having a statement around modern slavery forms a fundamental part of this.
- Legal – if you fail to comply, the government may start civil proceedings; failure to comply further could then lead to an unlimited fine. Not only does this have financial implications, but there could be complaints to regulatory bodies under a breach of specific ethical terms.
- Financial – litigation could lead to substantial fines, which will immediately impact your turnover. However, investor confidence could also negatively affect profits and your business could struggle to operate.
- Operational – not only can non-compliance impact your own operations, but your supply chain could be disrupted.
How to Adhere to Modern Slavery Laws
To comply with modern slavery laws, if you are a required entity, you need to show evidence of the steps you’ve taken to ensure your supply chains are clear of modern slavery. You may want to consider the following:
- Mapping supply chains – create a clear view of your supply chains so you can understand where risks may occur.
- Checking worker rights – ensure workers are legally allowed to work and receive minimum wage and verify their immigration status.
- Inspecting sites – carry out site inspections and audits during each period and ensure any corrective actions are being monitored.
- Delivering training – deliver training to ensure workers and suppliers are aware of modern slavery risks and the importance of workplace compliance and try to this into your company values and culture.
- Reviewing Policies – make reference to modern slavery in corporate policies and procedures.
- Carry out due diligence – ensure prequalification of new contractors covers aspects of human rights and labour conditions.
- Facilitating communication – create channels of communication within your supply chain so concerns can be escalated and considered by senior staff.
You will need to publish an annual statement to outline the steps you have taken, such as those above. The reports are kept by the Minister in a public repository and can be accessed freely online by the public.
Will Your Business Be Affected?
The Modern Slavery Act has resulted in an overhaul of policies and procedures in many organisations. If you are going to comply, you need to be able to produce documentation and evidence of the steps you are taking. Moreover, you need to implement positive risk management initiatives in support of any statement you make. The alternative, however, non-compliance, is very risky indeed.
Corporate social responsibility is a big deal. Organisations that show not only that they’ve met their obligations but that they are committed to creating a positive change in their communities will reap the benefits. Ultimately, it is up to you to decide where your business stands.
For over a decade, Conserve has helped organisations overcome contractor management challenges. We can help you develop a contractor management service that will be not only effective but will make your organisation safer, while minimising your overall risk. Request a demo now or visit the Conserve page for more great content.
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