Responding to modern slavery in your supply chain

Ignorance is no defense against regulatory reporting demands

Modern slavery can be closer to home than many businesses and consumers imagine. No one wants to accept modern slavery could be hidden in their supply chains — in the past, some companies have been reluctant to dig too deeply into supplier performance.

If social exploitation, resource exploitation and ethical misconduct remain unchallenged, more companies will be at risk of unwittingly supporting modern slavery through murky supplier relationships.

With reputation, trust and regulatory compliance on the line, your organization must be both proactive and transparent about identifying incidents of modern slavery and responding to them.

Signs of modern slavery

The signs of modern slavery may be subtle.

It's important to take a firm but fair approach when considering supplier activity; some suppliers may be ignorant to modern slavery breaches themselves and be willing to rectify and mitigate risks to retain working relationships. On the other hand, some suppliers may consciously hide unethical behavior and modern slavery and make it difficult to get to the heart of what's going on.

The risks of modern slavery are affected by three key elements: the location of the supplier, the industry type, and the spend category they slot into.

How to identify modern slavery incidents and risk

Supplier questionnaires – delivering a comprehensive modern slavery questionnaire to your partners about their activities and their own supplier relationships
Supplier relationships and communication – through regular contact and developing rapport with suppliers, companies are more likely to have a transparent view of unethical activities or modern slavery risks. Meaningful relationships also mean suppliers may be more likely to disclose issues and work together to rectify
Data analysis – a deep dive using a spend analytics solution can identify which suppliers pose the most significant risk. The extent of the threat or specific incidents will determine your next steps
Whistleblowing – offering supplier employees or contractors opportunities to disclose modern slavery through internal reporting — or risk public exposure where you no longer control the narrative

If you identify possible links to modern slavery, it's what your organization does next that matters. Larger companies are now compelled under law to report on modern slavery — but how they respond to identifying actual or potential issues will determine the level of regulatory scrutiny or sanction and consumer or industry backlash.

Modern slavery statements and reporting in Australia

Australia’s Modern Slavery Act 2018 requires companies with revenue over $100 million to provide an annual report publicly disclosing incidences of modern slavery and to set out what they are doing to prevent unethical activities in their supply chain.

Under Australian legislation, modern slavery statements must cover six areas:

1. Organization structure and supply chains
2. Slavery and human trafficking policies
3. Due diligence processes
4. Risk assessment and management
5. Key performance indicators to measure the effectiveness of actions
6. Training on modern slavery and trafficking

Publication of your statement on the Australian Government’s Online Register for Modern Slavery Statements does not equal compliance; the Australian Border Force publishes compliant and non-compliant statements to ensure transparency and encourage public accountability.

Smaller organizations not subject to mandatory reporting can submit a voluntary statement to flag their position on unethical supply chain practices; submitting a voluntary statement commits your business to report under the same conditions as mandatory reporting entities.

Putting your statement into practice with Sustainable Supply Chain Management Principles (SSCM)

The most effective way to deal with the risk of modern slavery is comprehensive visibility over your supply chain; transparency is the enemy of unethical activity.

SSCM relies on the following elements:

• Internal and external monitoring of suppliers and contracts
• Active risk management activities
• Targeted training and education
• Building strong relationships with suppliers
• Sharing best practice
• Robust information gathering
• Transparent reporting
• Advanced analytical capabilities

Introducing SSCM practices in your organization with intelligent technology platforms like RobobAI ensures existing issues are addressed and potential risks mitigated throughout your supply chain.

Why your KYS tool is business-critical

Access to detailed supplier analytics is vital to identify modern slavery issues and potential risks. RobobAI’s KYS platform is a powerful part of your business approach to monitoring supplier risk. The right AI technology can streamline reporting and compliance; prioritize supplier review based on location, category and spend; and simplify supplier questionnaire distribution and analysis.

RobobAI's KYS Risk helps safeguard your reputation by securing responsible suppliers with solid ESG credentials that align with your values and principles, rather than just price.

You can stay compliant and tackle modern slavery without compromising performance and profit with the right tools and approach.

Unlock confident modern slavery risk and reporting with RobobAI.