Australia’s Modern Slavery Act 2018 (MSA) was intended to be transformational, putting a spotlight on modern slavery risks and requiring businesses to take action on a persistent problem within global supply chains.
The MSA has been in force for over two years, and many entities are finalising their second statements. Early statements have focused on the frameworks developed by reporters. They often reflect work that has taken reporters from no modern slavery risk management program to the introduction of controls to manage risks. The process by which those risks are assessed, and then managed, is often embryonic, vague or absent. A recent report from the Human Rights Law Centre (HRLC) titled Paper Promises? Evaluating the early impact of Australia’s Modern Slavery Act found that 52% of companies are failing to identify obvious modern slavery risks in their operations and supply chains. It also criticised the lack of meaningful actions to respond to identified risks or impacts.
In light of these findings, Ethixbase360 will be hosting a webinar to discuss practical strategies to implement supplier due diligence (both finding risks and responding to them). Register for the webinar here.
Has the Modern Slavery Act guidance made a difference? Here are our takeaways.
MSA Statements Are Making a Statement
The release of Paper Promises? by HRLC examines the first set of statements of the 2018 legislation, in relation to specific sectors. According to the report, “The Modern Slavery Act 2018 (Cth) (MSA) was widely hailed as a critical first step by Australia towards tackling the global problem of modern slavery, with the government proclaiming that it would transform the way businesses respond to modern slavery by prompting a business-led ‘race to the top.’”
The “race-to-the-top” has turned into more of a “race-to-the-middle” as companies appear to be approaching compliance as a mainly tick-the-box exercise. Of the nearly 4,000 statements companies have published to the government’s modern slavery register, “many company statements remain mere ‘paper promises.’”
The authors selected and reviewed 102 statements from companies operating in or sourcing from high-risk sectors, including garments from China, seafood from Thailand, fresh produce from Australia, and rubber gloves from Malaysia.
- 77% of companies failed to comply with the basic requirements
- 52% of companies failed to identify and disclose modern slavery risks in their supply chains
- 27% of companies could demonstrate that they are taking some form of action
Freya Dinshaw, Senior Lawyer at HRLC, said, “Many companies aren’t even at the point of identifying the most obvious risks, let alone taking meaningful action to address them. We need enforceable laws that require companies to act.”
How High Are the Stakes? Takeaways for Businesses
Some of Australia’s largest companies are failing to identify or address the most significant human rights risks in their supply chains. Modern slavery is an issue that goes beyond keeping regulators appeased, and companies can and should take action when harmful activity is uncovered.
To comply with the new reporting obligations in full, there are several steps organisations can take:
- Design: Design and implement a modern slavery management framework
- Assess: Conduct due diligence on the modern slavery risks in the business supply chain and operations
- Mitigate: Adopt strategies for addressing the identified modern slavery risks
- Remediate: Develop and implement appropriate remediation measures
Ethixbase360, in collaboration with global law firm Norton Rose Fulbright, is helping companies achieve these steps to meet reporting requirements and effectively assess modern slavery risk within their supply chains with the Modern Slavery Questionnaire and Modern Slavery risk assessment module, which are offered via the Ethixbase360 360 Third-Party Risk Management Platform. Learn more about how Ethixbase360 can help elevate sustainability, ensure resilience, and deliver a positive impact in all of your organisation’s partnerships.
Read our Case Study with Anglicare on how we were able to improve their Modern Slavery reporting.