Modern Slavery is defined by the Australian Attorney General’s Department as “situations where offenders use coercion, threats or deception to exploit victims and undermine their freedom”.
Since the introduction of reporting requirements half a decade ago, larger organisations are obligated to thoroughly investigate their own workforce and supply chain for risk factors. The identification of Modern Slavery practices does not come without challenges. It can be hidden deep in complex supply chains with products, raw materials, and labour at risk of bearing a hidden human cost.
Modern Slavery falls under the “Social” pillar of the ESG framework and is a critical element of supply chain compliance that aims to reduce forced labour, exploitation and coercion. The Australian Institute of Health and Welfare reports that in 2022-23, The Australian Federal Police received more reports of Modern Slavery than in any other financial year, a clear indication that Modern Slavery is not isolated to vulnerable workers overseas but exists across all corners of the modern world.
Read on to learn more about how Modern Slavery manifests in supply chains, and how Cm3 is being used by organisations in their efforts to identify high risk suppliers and take action to reduce the occurrence of modern slavery.
The challenges of identifying Modern Slavery within supply chains
All businesses, especially large organisations, are at risk of engaging suppliers and contractors without realising the human cost behind their operations. Managing complex supply chains makes it challenging to track the true origins of goods and the conditions they are made under.
Factors that contribute to instances of modern slavery across supply chains include:
- Outsourcing and subcontracting labour where external companies may not respect or understand the rights of their workers
- Long hours and tight deadlines that may increase the risk of unhealthy or unsafe practices
- The use of migrant labour where language barriers may affect a worker’s understanding of their rights
- The use of raw materials from locations with a higher risk of human rights issues
While the property sector is generally considered a low-risk industry, modern slavery risk factors can still be identified behind the operations of contractors and suppliers.
Understanding Australian Modern Slavery reporting standards
Companies in Australia are legally required to identify, assess and mitigate modern slavery risk in their operations and suppliers. The Modern Slavery Act 2018 is one of the first pieces of legislation in Australia to require organisations to identify risk beyond suppliers that they have a direct contractual relationship with. Reporting entities are required by law to prepare a Modern Slavery statement, an annual review to assess and mitigate vulnerabilities in supply chain compliance as it relates to modern slavery.
A 2023 review of the Modern Slavery Act 2018 make 30 recommendations to strengthen the act in review of its operations in the first three years, including the introduction of penalties for non-compliance and a reduction of the reporting threshold from $100M to $50M.
Australia’s Modern Slavery requirements are expected to strengthen to further combat the rising occurrences of enslavement.
A large Property organisation’s approach to grow Modern Slavery risk visibility
An approach commonly adopted to identify areas of risk is to segment contractors and suppliers against key characteristics. Suppliers identified as “at risk” for Modern Slavery are requested to complete a self-assessment, increasing the client’s knowledge of areas within their supply chain that may be cause for further investigation.
Through Cm3, a large client from the property sector requested a series of self-assessments from indirect suppliers and achieved a 100% engagement rate. These self-assessments afforded the client greater visibility across their supply chain, strengthening their capacity to identify modern slavery risk factors.
In their FY23 Modern Slavery Statement, the client referenced the following key steps as part of their goal to mitigate modern slavery risks:
- Training for internal staff and contractors to increase awareness around Modern Slavery and how it can be identified
- Revision of an annual improvement plan to achieve defined targets
- Enhancing committee participation and membership
- Engaging with a larger portion of suppliers identified as high risk to complete self-assessments
With the client’s existing relationship with Cm3 to manage their contractor compliance, expansion of their partnership was a “logical step” in meeting the targets of their modern slavery improvement plan to achieve a higher supplier engagement rate.
“To boost the level of participation of this cohort and the standard of modern slavery reporting, we (sic)
partnered with Cm3 in 2023 and are now using the Cm3 platform to deliver more relevant questions and greater clarity as to what suppliers must consider.This has resulted in an increased level of supplier engagement and permits a more accurate assessment of modern slavery risks in a supplier’s operations and supply chains.”
– The Client’s FY23 Modern Slavery Statement
How Cm3 assists organisations in navigating Modern Slavery reporting obligations
Transparency is essential to identify markers for Modern Slavery hidden within complex supply chains. Cm3 assists businesses to overcome objections related to self-assessments, empowering organisations to make informed decisions to mitigate Modern Slavery risks.
All contractors on Cm3 must complete a modern slavery questionnaire as part of their registration and assessment process, providing some baseline information for hiring clients. Advanced tools are available in the form of surveys, risk flagging, dashboard reports, and educative resources.
Speak to a solutions expert today about the tools available to address Modern Slavery reporting requirements.