26 Apr 18

Modern slavery: Australia prepares legislation part I

Modern slavery: Australia prepares legislation part I

When Kate Nicholl entered the procurement profession, she never imaged she would end up in front of the Australian Senate. Yet, in August last year, that is exactly where State of Flux’s head of Australia found herself. And, she says, the senators were a little exasperated. “They were saying, ‘How can this happen? How can we possibly be buying from slaves?’

“They didn’t mean the Australian government, me personally or any organisation in particular. They wanted to know how businesses end up with supply chains containing unscrupulous firms which strip freedoms and rights from people they employ. It’s modern slavery and it’s a big topic here in Australia, and around the world,” Nicholl says.

The Australian government expects to introduce the draft legislation to combat modern slavery during this year. It will apply to businesses with turnover higher than AU$100 million.

Nicholl made her submission to senators, and appeared in front of them, to help inform the legislation as part of her role as researcher and lecturer at the University of Melbourne, which State of Flux supports. She says legislators around the world have generally failed to appreciate that in the last 30 years, the function of a supply chain has shifted dramatically. Vertically integrated organisations have been replaced by global outsourcing strategies to drive down key input costs, labour being chief among them. Because approach is often applied multiple times through the supply chain, OEMs may have little understanding of their third and fourth-tier suppliers. Together with the focus on cost, this lack of visibility has given suppliers the opportunity to introduce workforce conditions equivalent to slavery.

Nicholl says: “We need to be clear: modern slavery is not just about low wages. It applies to people who have no rights or freedom of movement. They are trafficked into jobs they did not agree to do, and employers take away their papers, so they have no choice but to stay and be paid less than a living wage. There is a UN definition of a minimum living wage people are entitled to. It is not the Australian or western wage, but it covers food, water, transport and children’s education.”

Australia is not the first country to introduce legislation aimed at tackling modern slavery. In 2015, the UK introduced its Modern Slavery Act. Nicholl and her fellow researchers have recommended areas where Australia may be able to improve on these laws, suggestions which have been largely adopted in the draft legislation. They recommend the government should give businesses plenty of warning and help raise awareness. It is not a simple task to map a global supply chain and make a statement that it is free of slavery. The first step is to encourage supply chain mapping and to begin reporting on what the supply chain map currently is and where the risks are, similar to an internal diagnostic process. A three-year period was suggested for this exercise.

University of Melbourne team also proposed:

  • a central reporting repository to track and monitor Australian companies progress
  • the appointment of an anti-slavery commissioner, who should provide a framework for best practice and advice on how to trace a supply chain and mitigate risks
  • a consideration of how the law will work with Australia’s largest trading partners

Nicholl says that in preparing for this legislation, there are a couple of steps businesses can take immediately. Firstly, they can look for a technology platform to survey and track suppliers globally, including tier 2 and tier 3 suppliers. Secondly, they can partner with non-governmental organisations who have in-depth knowledge about slavery issues and can help with transformative projects.

We’ll return to the subject of modern slavery, and how organisations are addressing the issue, in a few weeks’ time.