If you think human rights abuses such as modern slavery only affect big manufacturers with employees in other countries, think again. Businesses of all sizes in all sectors and countries face the risk of modern slavery in their business and supply chain. Yes, even in Australia.

But what is modern slavery, and how can you find out if it impacts you, your business or the companies you buy from? And what can a small business, with limited buying power and resources, actually do?

It’s essential for small to medium-sized enterprises (SMEs), which employ just over 50% of workers in Australia (Australian Bureau of Statistics), to understand this serious human rights problem and know what to do about it.

You can start by understanding and recognising the risk, and then investigate ways of reducing or eliminating it. To help businesses do this, the UN Global Compact Network Australia has recently launched a guide to Modern Slavery Risk Management. This post summarises key points from that publication and points you to further resources.

What is modern slavery?

The term modern slavery refers to extreme forms of exploitation of people, such as forced labour, servitude, human trafficking, debt bondage, forced marriage and illegal child labour. It’s not about substandard working conditions or unfair pay – it’s about serious human rights abuses that undermine individual freedoms.

“Modern slavery describes situations where offenders use coercion, threats or deception to exploit victims and undermine their freedom.”
(Australian Government, Attorney-General’s Department)

It’s a big problem. Nearly 50 million people around the world are living and working in conditions of modern slavery (Global Slavery Index). Even in Australia, an estimated 41,000 people are being exploited in modern slavery conditions. The Asia Pacific region, which includes many of Australia’s major trading partners, has more than half the world’s total forced labour.

“Each day, we buy the products or use the services people have been forced to make or offer without realising the hidden human cost.”
(Global Slavery Index)

Why do SMEs need to know about modern slavery?

A small business does not exist in isolation – it is part of a supply chain made up of links such as staff, clients/customers, distributors, sales/support services, product/service suppliers, raw material providers, waste disposal/recycling services, investors, business partners and other stakeholders. The policies and actions of each of these links in the chain have an impact up and down the chain. Because SMEs often supply products and services to large companies, they may be part of a much longer supply chain.

The Commonwealth Modern Slavery Act 2018 requires large organisations to report against modern slavery criteria, by identifying and addressing their modern slavery risks and maintaining responsible and transparent supply chains. This means they will ask their suppliers to do the same, as part of an overall modern slavery risk assessment. Proof of ethical practices is increasingly required by customers, staff, suppliers, business partners and government or commercial tendering bodies.

“SME participants … are often requested to conduct modern slavery risk assessments or complete modern slavery questionnaires for larger customers and clients, as well as engage on the issue during the contracting and tendering process.”
(UN Global Compact Network Australia)

Of course, embedding respect for human rights into organisational policies and practices is essential for operating an ethical, sustainable business, so that’s reason enough on its own. Other benefits include the competitive advantage of being able to respond to tenders effectively and strengthen brand reputation by demonstrating ethical credentials to customers and business partners.

What can SMEs do about it?

Modern Slavery Risk Management - Guide for Australian BusinessesThe UNGC Australia’s guide to Modern Slavery Risk Management outlines several practical steps for SMEs to identify, manage and reduce modern slavery risks. The first step is committing to do something, by stating that the organisation’s policy respects internationally recognised human rights, including freedom from forced labour or other forms of modern slavery.

After stating its policy, an organisation can identify potential or actual human rights risks by analysing all aspects of the business and supply chain, assessing modern slavery risks in particular. To address these risks, the business then sets up appropriate control mechanisms. For example, these mechanisms could include supplier certifications, codes of conduct, staff/supplier training and awareness communication, and screening and monitoring processes.

Once relevant mechanisms are in place, it’s time to set up transparent processes that capture any workplace issues from stakeholders. The last step involves communicating the steps taken and reporting progress against stated policy/goals.

Although SMEs are not legally obliged to report on modern slavery, they have the option of filing a Modern Slavery Statement with the Australian Government. This will appear on the Online Register for Modern Slavery Statements, which currently includes over 850 voluntary statements as well as over 6400 mandatory ones.

If you represent any type of business, we recommend you read the UNGC Network Australia’s Modern Slavery Risk Management playbook for an excellent guide to the topic, and explore other resources listed below for more detail.

Modern slavery and migrant workers in Australia

This short video from UNGC Australia discusses exploitation of migrant workers, and what businesses need to be aware of and act on.


Further information

Related Green Street resources