By Bayside Group

Sep 22, 2020

Has COVID-19 compromised corporate efforts to eliminate modern slavery?

With Australia officially in its first recession in 30 years, and GDP plunging 7% in the June quarter, it’s no surprise the focus for many organisations has shifted away from modern slavery.

As many Australian companies with revenue in excess of $100 million start submitting their first mandatory report under the Modern Slavery Act 2018, experts say that COVID-19 has significantly compromised efforts towards eliminating modern slavery. So, what issues and risks could this pose for businesses?

Under the Act, the Australian government uses the term modern slavery to describe serious exploitation including slavery, servitude, child labour, forced labour, human trafficking, debt bondage, slavery-like practices, forced marriage and deceptive recruiting for labour or services. While it doesn’t include practices like substandard working conditions or underpayment of workers, many organisational Modern Slavery Statements look to address these issues concurrently.

For the majority of Australian companies, including the Bayside Group, eliminating modern slavery through the supply chain has become a key priority. Approximately 71% of all organisations have incidents of modern slavery or exploitation within their supply chain. This will have a significant impact on Australian SMEs as well as international suppliers.  It is surprising to many Australians that incidents of modern slavery occur in their own backyard.

A Department of Home Affairs media release in July stated the Australian Institute of Criminology estimates there are up to 1,900 victims of modern slavery in Australia, while the United Nations estimates there are over 40 million modern slavery victims globally, approximately 70% of these women and girls.


On-shore risks for Australian businesses

A recent ABC Law Report Podcast, Tackling modern slavery  discusses human trafficking and slavery in Australia. Luke Geary, a Lawyer at Mills Oakley, Brisbane has acted in over 100 cases in Australia and explains that people get tricked into working illegally; they are often promised work or education opportunities, only to arrive in Australia to find those promises are lies.

The Diplomatic service (housekeepers and cleaners), restaurants and hospitality, horticulture and agriculture are examples of industries at higher risk. Often modern slavery occurs in labour where people feel invisible or may not have a strong grasp of the English language. During the pandemic, international students and refugees on temporary visas are also at risk, without access to hospitality and service jobs, and the Federal Government excluding them from programs such as JobKeeper and JobSeeker. However, harvest jobs may be an option for these groups, with Australia facing significant shortages in the coming months and the government looking at ways to incentivise this work.

Australian businesses need to understand the risks, and be particularly cautious of sub-contracting arrangements where they have less visibility over the company providing the service.


Off-shore risks exacerbated by Covid-19

There are three key factors exacerbating risks during the pandemic; cost cutting measures, auditing restrictions, and the rush to secure PPE.

With companies in cost cutting mode, it is important to keep the old adage in mind - if it sounds too good to be true, it probably is. It’s essential to be aware of high-risk industries, products and regions when looking at new suppliers, and to stay in regular contact if audits cannot be undertaken, requesting additional documentation if necessary.

A New York Times investigation identified Chinese companies using Uighur labour to satisfy demand for PPE during Covid-19. Uighurs are a largely Muslim ethnic minority primarily from the Xinjiang region of northwest China. A Chinese government program sends Uighurs and other ethnic minorities into factory and service jobs. Since 2015, almost 3 million people have been put in the program. According to the Australian Strategic Policy Institute, the International Labour Organisations lists 11 indicators of Uighur forced labour.

However, it is not just China. A large Malaysian PPE supplier has also been accused of modern slavery, with goods blocked by US Authorities at customs, and similar reports have come out of Thailand.

Experts say that where viable, it is better to engage with suppliers and help them to change processes, rather than just cut and run, especially where debt bondage due to unethical recruitment practices is involved. Otherwise, victims are left in even more dire or vulnerable situations. Larger companies with higher purchasing power can have a significant impact on improving recruitment and employment practices and reducing modern slavery.


What can businesses be doing during the pandemic?

While businesses face restrictions in conducting audits right now, there are many actions that can be taken.


  1. The Department of Home Affairs recently announced a new portal for organisational statements to assist investors and consumers in their decision making. This will be a useful resource for organisations, who can review industry, competitor and key company statements to assist in identification of risks and gaps.


  2. Continue to understand key risk areas as they evolve quickly during the pandemic, and build organisational knowledge to assist in the decision making processes. There are also many Australian NGOs such as the Salvation Army and Be Slavery Free actively working to eliminate modern slavery. Creating partnerships with relevant NGOs can be mutually beneficial and facilitate information sharing.


  3. Stay in regular contact with suppliers and carefully review new suppliers. Conduct reference checks with key clients, particularly if you’re unable to conduct on-site audits. Insist on necessary documentation and use technology where possible.


  4. Ensure you and your Australian suppliers are using companies with a current a Labour Hire Licence; these are required in Queensland, Victoria and South Australia. Further to this, put systems in place to identify, monitor and evaluate sub-contracting arrangements your suppliers are engaged in. Please note that different penalties apply in each state using labour hire organisations without a licence.


If you’re looking for talent, Bayside Group’s specialist recruitment brands have ethical and compliant recruitment processes in place, hold current Labour Licences, and ensure all pay rates are checked and monitored by our Workplace Relations experts.


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