Modern slavery legislation passed in parliament

Australia’s anti-modern slavery legislation was passed in Federal Parliament last week. This important new legislation is a key step in confirming Australia’s commitment, together with a growing number of other countries around the world, to the eradication of human rights abuses within the workforce.

Australian entities that have an annual consolidated revenue of more than $100 million will now report annually on the risks of modern slavery within their operations. Businesses will be required to publish annual modern slavery statements, articulating details of potential modern slavery risks within their extended supply chain and actions being taken to address these risks.

Gaining full transparency over a supply chain can be tricky. Complex, multi-tiered and multi-jurisdictional supply chains built up over extended periods of time that comprise intertwined supplier, contractor, and business intermediary arrangements can present companies with significant challenges as they seek to identify modern slavery risks. These challenges are likely to be compounded by the lack of dedicated modern slavery and supply chain specialists with the experience to map and apply effective due diligence services to extended supply chains.

Getting on the front foot early by developing a strategic modern slavery compliance framework comprising some of the following core elements will alleviate some of this burden as companies prepare for the new mandatory reporting requirements:

Reviewing internal policies and contract management

• Update existing codes of conduct, contracting arrangements and procurement policies to explicitly include compliance with the modern slavery legislation
• Consider how risk-based due diligence frameworks should be adapted to address the identification of modern slavery risks

Supply chain transparency and modern slavery risk assessment

• Mapping supply chain architecture by unpacking complexity, geographical spread and work force profiles
• Apply a risk-based approach to identify and rank high risk industry sectors, locations, suppliers and other intermediaries

Enhanced due diligence

• Using data analytics as a diagnostic tool to provide greater visibility across supplier relationships and changes to the profiles of supply chain participants
• Using enhanced due diligence to establish, for example, information regarding suppliers’ businesses, extended beneficial ownership structures, adverse media reports, court rulings, social media chatter and other indicators to assist with understanding possible human rights abuses

 Awareness, communication and supplier engagement

• Developing communication protocols setting out clear steps to eradicate modern slavery risks through ongoing positive engagement with suppliers, advisors and the workforce
• Tailored training for stakeholders to raise awareness of modern slavery risk and legislative compliance requirements is essential

Australia’s new anti-modern slavery laws come into effect on 1 January 2019 leaving little time for effected entities to get their houses in order and to assess and identify risks in advance of obligations to submit a meaningful first modern slavery statement. The time to commit is now.