The impact of the Modern Slavery Act on small business

The Australian Modern Slavery Act 2018 has brought a new era of compliance to the business community of Australia. It calls upon large organisations to report on the risk of modern slavery in their supply chains and operations, and to state their strategy to mitigate the risk through a mechanism of continuous improvement, transparency, and reporting. Although targeting organisations with annual consolidated revenue of $100M+, the Act is also impacting smaller entities who are part of the supply chain of larger organisations. This includes small business.

Modern slavery is an umbrella term comprising forced labour, extreme forms of child labour, domestic servitude, forced marriage and human trafficking. It is a human rights violation that affects more than 46 million people globally. Profits from forced labour alone are estimated to be around US$354 billion.

Surprisingly, modern slavery is also a problem in Australia, with an estimated 15,000 people working in slave-like conditions (Global Slavery Index). Hidden in plain sight, modern slavery in exists in agriculture, horticulture, mining and construction, and in services such as hospitality, domestic service, nail salons, car washes, cleaning services and security.

There are many indicators of modern slavery, including low pay or no pay; extremely long working hours and days without a break; the forced keeping of passports; onboarding fees leading to borrowing and debt bondage; WHS issues including unsafe and unclean machinery, workspaces, air, water and lack of PPE. People have no right to form a union or speak out.

On their own, these indicators do not always equate to modern slavery. They point to the risk of modern slavery as well as to other forms of exploitation experienced by temporary and workers in Australia. There are more than 1 million temporary workers in Australia, who are currently at risk of being exploited by employers because of a lack of support during Covid-19 pandemic. According to the “As If They Weren’t Human” report (Migrant Worker Justice Initiative, 2020), 70 per cent of temporary workers, mostly students, have lost their jobs or have experienced a significant loss of income, and many cannot find support from family overseas to live here or travel back home.

Here are my top five tips to help small businesses comply with the Modern Slavery Act.

1.Be informed about the issues of modern slavery and use the Modern Slavery Act as a vehicle for change within your organisation, engaging staff, contractors and suppliers responsibly, and learning to identify the risk.

2.As a supplier to large corporations, it is important to resist making any statutory declaration that you are “slave-free” in order to tender for business. The Act does not expect this. Rather, companies are asked to be transparent about the current risk of modern slavery and commit to taking reasonable steps to mitigate this risk.

3.Take steps to improve your operations to include a supplier code of conduct, modern slavery clauses in supplier contracts, and identify where the risk of modern slavery might be in the products you buy to run your business. The best place to start is a gaps analysis process.

4.Publish your own “Position Statement” on modern slavery on your website to signal your intention to meet compliance and reveal your efforts. See this as a working document that you improve over time as you learn and understand more.

5.Be receptive to whatever support, training, sources, supplier platforms and tools your BSB clients offer to help you retain and tender for business. At Unchained, we believe that making an impact on modern slavery is about collaboration and knowledge sharing  and showing leadership through capacity building and resourcing those down the supply chain.

Dr Stephen Morse, Founder and CEO, Unchained Business Services

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