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Suppliers: are you ready for modern slavery?

To comply with the Modern Slavery Act 2018 (Act), businesses will request information from suppliers regarding their modern slavery processes and practices.

The Act requires entities with consolidated revenue of more than $100m and carrying on business in Australia, to lodge a modern slavery statement. The intent of the Act is to target businesses that have the resources, to put in place processes and systems to lodge a modern slavery statement.

Businesses will issue information requests or questionnaires to suppliers regarding modern slavery. This will likely result in businesses pushing the burden of compliance downstream, including small and medium sized enterprises.

Small and medium sized enterprises should expect to receive these questionnaires and requests for information from customers. To do business with these entities, it will be necessary to provide information including but not limited to employees, supply chains and due diligence.

Preparing for Information Requests

In preparation for requests for information and questionnaires from customers, suppliers of all sizes should consider:

  • Supply Chain Mapping. Identify all tier one suppliers. Map tier one suppliers according to industry, geographic location and spend. Characterise suppliers based on supply chain mapping into high, medium and low risk.
  • Issuing Questionnaires. Consider issuing questionnaires or requests for information regarding modern slavery practices to high and medium risk suppliers, based on supply chain mapping and characterisation.
  • Conducting Due Diligence. Put in place an effective system of screening suppliers for modern slavery. Conduct investigations and audits on certain suppliers. Consider remediation processes if modern slavery is identified in supply chain.
  • Training and Conduct. Train staff regarding modern slavery and how to identify it. Put in place modern slavery policies and procedures. Consider developing a supplier code of conduct and issue to suppliers.
  • Documentation. Ensure contracts and any standard terms and conditions with suppliers have a modern slavery clause.

Example Questions

Examples of questions suppliers can expect to receive from customers include:

  • number of employees, location and summary of employment relationship (permanent, seasonal or contract);
  • details regarding the use of labour hire;
  • countries products and services are sourced from;
  • whether suppliers use a third party to identify overall risks of modern slavery and human trafficking in supply chain;
  • whether independent or unannounced audits of operations of suppliers take place;
  • standards on human trafficking for employees and contractors including training and consequences for non-compliance; or
  • if modern slavery is identified in supply chain, processes in place to remediate.

Compliance with the Act will be far-reaching and will require businesses of all types and sizes to put in place systems and processes to identify and remediate modern slavery. If not already commenced, small and medium sized enterprises will need to put in place processes and systems to address the above.

Contact us – if you would like to know more details or have any concerns regarding modern slavery.

This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.

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