Australian companies and governments are being urged to do more to stamp out the scourge of modern-day slavery after an in-depth report highlighted a shocking gap between recognition of slavery risks in supply chains and effectively responding to them.
The report, Spot Fires in Supply Chains, by International Justice Mission (IJM) Australia, found 90 per cent of Australian businesses recognised potential modern slavery risks in their supply chains, mainly through the region in which they operate; and yet 66 percent were unable to provide information beyond their Tier 1 (local) supply chains.
An analysis of a sample of 404 corporate statements submitted to the federal government’s Online Register for Modern Slavery Statements for the last financial year found three-quarters of companies are doing only the bare minimum required under the Modern Slavery Act.
IJM Australia CEO Steve Baird said it was disappointing and confronting to see such a high level of non-compliance on Australian shores.
“This is a watershed moment for Australian businesses that are clearly exposed to significant supply chain risks. There is a clear gap in corporate Australia’s understanding of both the problem of modern slavery and how to fix it. This report is the first step to fixing it and de-risking the supply chain for Australian corporations,” he said.
Shockingly, nearly 85 per cent of company statements did not indicate a single instance where a company had responded to actual or alleged modern slavery in their operations or supply chains.
“Most of them are certainly not getting there through having mechanics in place to detect it in their own operations. And this is consistent with what we’ve seen in our conversations across Australia. And that is, ‘yeah, we think there’s a problem. I really hope it’s not on my watch. And truthfully, I’ve got a bit of concern going too deep because it if is on my watch, I wouldn’t know how to deal with it’.”
Fewer than one in five companies had consulted with a survivor.
Asked which industries were most at risk of using modern slavery, Baird said it was across the board.
“What we know is that one in four of those held in slavery are children. And you’re talking about a prevalence of 40 million people held in slavery right now, with nearly two-thirds of those held in slavery being in South Asia. This can touch anything from the fishing industry to the construction industry, to bricks. So you’d actually find a lot of risk products in the supermarket.”
One aspect of the report that particularly concerned Baird was that fewer than one in five companies had consulted with a survivor or an affected stakeholder group to understand what is going on and find ways to communicate with affected communities.
“Imagine if we had all these companies in Australia rolling out Indigenous Nation plans but most of them had never actually spoken to anyone in the Indigenous community. Well, that’s almost exactly what’s happening [in modern slavery]. At the moment in corporate Australia, there’s a few people leaning in but on the whole, it’s a bit of a tick-and-flick exercise.”
“You’d actually find a lot of risk products in the supermarket.” – Steve Baird
This is why one of the three recommendations in the report for business is that they engage with stakeholders from directly affected communities, including survivors. The others are to invest in sustainable solutions that reduce slavery rates in high-risk regions such as India; and to put in place mechanics to ensure their responses to modern slavery are effective and have proven impact.
“On the whole, it’s a bit of a tick-and-flick exercise.” – Steve Baird
The report urges the government to enact legally enforceable standards to ensure that goods imported to Australia are not the product of modern-day slavery.
IJM Chief Advocacy Officer Amy Smith is counting on a revamp of Australia’s Modern Slavery legislation that will give it teeth and ensure that those companies that neglect their responsibilities to police their supply chains are held accountable.
“The encouraging thing is that the Commonwealth Modern Slavery legislation is due to be reviewed,” she said. “The review should be finished by March next year. What’s missing from this legislation is any kind of decent penalties and corporate Australia needs to take these pretty seriously.”
Baird said it wasn’t all bad news, however, with a handful of companies – such as Outland Denim and Kathmandu – lodging gold-standard modern slavery statements.
Other findings from the report include:
- 43 per cent of corporations met half or less of the study’s quality indicators.
- The majority of strong statements (58 per cent) were large corporations of over $1 billion in revenue.
- The majority of weak statements (79 per cent) were smaller corporations of less than $500million in revenue.
- Only 24 per cent of statements revealed the status of workers, for example whether they are part-time, full-time, contractors, skilled, or unskilled.
- The weakest section of most responses was on due diligence and remediation.
- The report has received endorsement from the Global Survivor Network (GSN), which is leading a movement to protect communities from violence.