Managing Modern Slavery Risks: Does it impact your business?
In recent times, governments and businesses globally, including Australia, have heightened their awareness of the imperative to combat modern slavery within their operations and supply chains. The Australian Government has taken significant legislative measures to address this pressing issue.
However, the responsibility now falls on Australian businesses to comprehend and navigate modern slavery risks, with a crucial role played by in-house counsel.
Modern slavery, an umbrella term encapsulating severe violations of human dignity and rights, encompasses practices like human trafficking, slavery, forced labour, debt bondage, and child labour. The Criminal Code Act 1995 (Cth) delineates these offences under divisions 270 and 271. According to estimates from the International Labour Organisation, approximately 50 million people globally were living in modern slavery in 2021.
Despite well-intentioned efforts, organisations, even in Australia, can unwittingly find themselves entangled in modern slavery. The intricate web of global supply chains often conceals the real risks. Recognising that this issue extends beyond individual businesses to those with whom they conduct business is crucial.
Compliance under the Modern Slavery Act 2018 (Cth) mandates that organisations with an annual revenue exceeding A$100 million submit an annual modern slavery statement. This statement must identify risks within the organisation and supply chain and report actions taken to combat modern slavery. The threshold may be lowered to organisations with an annual revenue between A$50 million and A$100 million, pending the adoption of recommendations from a recent statutory review, potentially exposing more businesses to penalties for non-compliance.
Apart from legal implications, any connection to modern slavery can tarnish an organisation's reputation. Demonstrating a commitment to ethical practices can offer a competitive advantage in the market, considering the heightened focus on Environmental, Social, and Governance (ESG) commitments by stakeholders.
Even without a legal and ESG obligation, organisations bear a moral responsibility to ensure they are not supporting or benefiting from modern slavery. This aligns with the trend of being a good corporate citizen, especially as customers, shareholders, and investors increasingly scrutinise an organisation's response to modern slavery.
Addressing modern slavery risks goes beyond legal and ethical considerations; it becomes a strategic imperative for organisational continuity. Exposures to modern slavery can trigger operational and organisational disruptions, including legal investigations, supply chain interruptions, and financial losses.
To manage modern slavery risks effectively, organisations can adopt several strategies:
Risk Assessment: Map out operations and supply chains to identify vulnerabilities, assigning risk levels to each supplier based on type, size, product or service, geographic location, and known labour practices.
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Supplier Due Diligence: Conduct due diligence on suppliers and business partners before onboarding, utilising questionnaires, site visits, and audits based on their risk levels.
Contractual Obligations: Include modern slavery terms in supplier contracts, mandating compliance with modern slavery laws, Supplier Code of Conduct, and reporting requirements. Clearly outline consequences for non-compliance, such as immediate contract termination.
Collaboration: Work closely with colleagues in procurement, risk, and compliance to integrate modern slavery considerations into supplier relationships and sourcing practices.
Training and Awareness: Provide regular training to personnel to recognise signs of modern slavery and encourage reporting. Develop a comprehensive modern slavery policy outlining the organisation's commitment.
Remediation: Develop a plan to address identified instances of modern slavery within operations or the supply chain, integrating it with crisis management or business continuity plans.
Continuous Monitoring and Improvement: Regularly review supply chains, policies, and processes to adapt to changing risks. Assess the adequacy of existing frameworks to respond to potential legislative changes.
The battle against modern slavery is a multifaceted effort requiring legal compliance, ethical commitment, and strategic foresight. Brainbox Advisory brings this value closer to Australian businesses by helping them build a robust HR backbone to proactively engage with emerging industry challenges.
Brainbox Advisory not only helps in compliance but also ensures that organisations like yours run in an ethical and sustainable operation in the face of evolving risks.
Navigate HR compliance complexities with Brainbox Advisory! Fill out this form and get in touch with us via 📞 +61 8 9467 4441 (WA) or via 📧 info@brain-box.com.au.