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‘Tainted money’: Thousands of businesses brace for slavery crackdown

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“If you are selling meat, fish, clothes – any profit should be taken away to compensate these kids and pay reparations.

“I talk about this as a crime. If we said our taxpayers’ money is unwittingly funding child abuse, I think we would get really angry – but that is what modern slavery is doing.”

Australia’s anti-slavery legislation will capture major companies such as supermarket giants Coles, Woolworths, 7-Eleven, brewing dynasty Coopers, the Sydney Fish Markets, Australian retailer Cotton On, as well as motor dealers National Capital Motors, and two of the major sporting codes – the AFL and NRL.

They are required to report annually on the risks of modern slavery in their supply chains here and overseas and the actions they’ve taken to address those risks.

The big four consultancy firms, Deloitte, Ernst & Young, KPMG and Pricewaterhousecoopers, have set up modern slavery units to deal with the expected flood of compliance requests before 3500 companies are due to deliver their 2019-20 reports by November 2020.

“The explanatory memorandum to the legislation makes it clear that the problem is pervasive and no business is likely to be immune,” Deloitte’s risk advisory principal, Leeora Black, said in a note to clients.

In an audit of more than 4000 factories this year, Wesfarmers found 82 critical breaches of the act. It closely examines suppliers of call centres, cleaning services and trolley collectors in Australia and high-risk suppliers overseas that could have unsafe work conditions or make employees work excessive overtime.

“One of the critical breaches we are most concerned about is bribery of auditors,” Wesfarmers’ sustainability manager, Fiona Lawrie, said. “If an auditor is bribed from the get-go, then we will have very little confidence in the supplier doing the right thing.”

The retail giant, which owns Kmart, Target, Bunnings and Officeworks, said suppliers of its home-brand products would be the most closely scrutinised.

Wesfarmers, which owns Kmart, Target, Bunnings and Officeworks, said suppliers of its home-brand products would be the most closely scrutinised.

Wesfarmers, which owns Kmart, Target, Bunnings and Officeworks, said suppliers of its home-brand products would be the most closely scrutinised.Credit:SMH

“We wouldn’t go and audit Apple, for example, that is supplying to Officeworks, we would audit an Officeworks-branded product because no one else is looking as closely at that supplier as we would be,” Ms Lawrie said.

She said smaller companies could pass on the cost of having to hire new staff to consumers in the short term, but the act had made it a “cost of doing business” and would improve long-term productivity.

“It should be just business-as-usual for business to be investing in this, like they did in safety 15 to 20 years ago,” she said.

In a world first, the Australian government will also be forced to investigate the origins of all products it procures, including raw materials such as cobalt, which is predominantly mined in the Democratic Republic of Congo and is used heavily in state-of-the-art defence material.

PM Scott Morrison (third from left) at the G20 leaders' meeting, whose final communique included a commitment to decent work and actions to end child labour, forced labour, human trafficking and modern slavery.

PM Scott Morrison (third from left) at the G20 leaders’ meeting, whose final communique included a commitment to decent work and actions to end child labour, forced labour, human trafficking and modern slavery.Credit:Alex Ellinghausen

Mr Hyland said Australia was now a world leader in anti-slavery legislation, which will capture supply chains that account for 40 million people and $150 billion each year.

“The bit that I find really groundbreaking is that you have got this requirement on the government to demonstrate that their own supply chain is free of modern slavery,” he said in an interview.

“If you actually look around the world, a third of all spend is by government. When they are doing procuring, whether it’s their military hardware or equipment for schools or hospitals, they should be making sure that hasn’t come at the cost of someone being exploited.”

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