Frequently Asked Questions (FAQs)
What is Modern Slavery, Forced Labour and Child Labour?
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What is modern slavery?
Modern slavery is a human rights issue that includes various forms of exploitation and coercive practices that deprive individuals of their freedom, rights, and dignity. It encompasses situations where individuals are forced or coerced into labour, servitude, or human trafficking against their will.
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The demand for a variety of quality goods and services at a low price from consumers, businesses, and governments around the world means that there are bad actors who perpetrate forms of modern slavery to cater to the demand.
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What are the different forms of modern slavery?
Modern slavery can take different forms, including:
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Forced labour: Individuals are compelled to work against their will under threat of penalty.
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Child labour: Children are exploited for work, often in hazardous conditions.
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Human trafficking: People are moved or transported against their will for the purpose of exploitation.
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Debt bondage: People are forced to work to pay off a debt, often under exploitative terms.
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Forced marriage: Individuals are forced to marry against their will.
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What is modern slavery risk?
Modern slavery risk encompasses various factors that can expose a business to the possibility of modern slavery practices within its operations and supply chain such as forced labour and child labour. These risks are categorised into inherent business risks, and risks related to business conduct such as policies and procedures.
To manage modern slavery risk, businesses are increasingly turning to software solutions to assess, address, and report on modern slavery risk in their operations and supply chains.
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What are inherent modern slavery risks?
Inherent modern slavery risks are those that naturally occur within a business due to its configuration such as geography, sectors, goods/services, and business hiring practices. These risks are intrinsic to a company's operations, production, and sourcing. Inherent risks can be present at all stages of the supply chain. It's crucial for businesses to recognise and assess these risks not only in their operations but also in their production and sourcing practices.
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What else contributes to modern slavery risk?
A lack of operational and supply chain policies increases a business' vulnerability to modern slavery and contributes to modern slavery risk. For example, if a local business works with an overseas supplier in a high-risk sector and high-risk country, and that supplier does not have modern slavery policies in place to mitigate the risk; the supplier will have a higher level of risk of encountering modern slavery practices in their own operations or their own supply chain. This then affects the business who is working with the supplier, even though the business is not directly perpetrating modern slavery practices.
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What are the 5 Key Factors of Modern Slavery Risk
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Geography
The countries and regions where a business operates, produces, and sources from can expose a business to modern slavery risk. Some regions are known to have a higher risk of human trafficking, forced labour, and child labour. The US government releases an annual trafficking in persons report that describes different geographical regions and countries at different risk levels for human trafficking, with governments that are lacking or not enforcing anti-trafficking laws being at higher risk.
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Sectors
The industry a business operates in can expose a business to modern slavery risk. Certain sectors are more susceptible to modern slavery, particularly those involving the gathering, packing, and distribution of raw materials that require significant human labour. For example, businesses in manufacturing, mining, agriculture, labour hire, cleaning, and security sectors may be at higher risk because those sectors are attractive to bad actors who are exploiting people for money and labour. Lack of transparency, regulation, and reporting across many of these sectors in different regions, countries, and jurisdictions enable bad actors to operate more easily in these and attach themselves to businesses supplying goods and services to customers all over the world.
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Goods and Services
Goods and Services are an inherent modern slavery risk that relates to particular goods and service categories overlayed with geographical risk data. There is heightened risk with certain goods and services depending on which region they are produced or sourced in. The intersection between goods, services, and geography has to do with the different practices of businesses that are producing, or distributing the goods. For example, fabrics and textiles produced and distributed in one region may be done with modern slavery practices such as forced labour and child labour, where as, the same type of fabrics and textiles might be made ethically in another. The ethical production of and ethical service provision is tightly link to geography due to different governments, laws, regulations and other cultural and environmental conditions that allow for, or prohibit certain behaviours. The US Government releases an annual goods list that describes goods produced in specific countries at risk of being produced with forced labour and child labour.
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Business hiring and employment practices
Certain hiring factors can also increase the risk of modern slavery in a business. While exploitative practices may not be present in your operations, they may be a part of your direct suppliers, their suppliers, or even further down the supply chain. These include:
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Employing young people. Young people under the age of 15 are vulnerable, and can be exploited for workforce labour including child labour, paying less than minimum wage, assigning hazardous tasks that constitute the worst forms of child labour, or employing people below the lawful age of employment.
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Employing foreign migrant workers. Employing migrant workers is not a form of modern slavery in itself, but they are a more vulnerable workforce due to relocation factors, which can create opportunities them to be exploited by bad actors. These exploitations may include forced labour, or human trafficking elements such as withholding worker identity documents (e.g. passports), providing uninhabitable housing, creating debt bondage, or paying less than the legal minimum wage.
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Using uncertified, unverified recruiters to handle employment. Similar to employing foreign migrant workers, using uncertified, unverified recruiters can create opportunities for exploitation by bad actors. These exploitations include charging people fees for being recruited or employed, other forms of debt bondage, forced labour or human trafficking elements such as forced relocation, or withholding worker identity documents (e.g. passports).
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Lack of policies and procedures
Without clear guidelines and procedures outlined in modern slavery policies, the business may unknowingly engage with suppliers or operational practices that involve forced labour, human trafficking, debt bondage, or child labour.
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How is my Business Connected to Modern Slavery, Forced Labour, or Child Labour?
Modern Slavery and Your Business
​Different forms of modern slavery can appear in a company’s operations and supply chains. There's a common misconception that a company must directly perpetrate modern slavery for the topic to be relevant to the organisation, but vulnerabilities in business policies can indirectly allow for modern slavery to occur through supply chain partners.
Bad actors who perpetrate modern slavery using various mechanisms such as recruitment practices, wages, worker housing, and worker identity documents, can attach themselves to a business directly, or indirectly through supply chain partners at any point along the supply chain.
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Top 5 challenges for businesses responding to modern slavery inquiries
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Lack of awareness and understanding.
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Cost and complexity of assessing modern slavery risks.
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Supplier collaboration challenges.
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Supply chain complexity.
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Varying reporting, legal and regulatory requirements.
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How can modern slavery be prevented?
All businesses, including yours, have an important role to play in the identification and prevention of modern slavery. Governments around the world have taken steps in recent years to introduce legislation that requires businesses to assess and report on modern slavery risks to create supply chain transparency. Businesses can assess, address, and report on their modern slavery risks to create more supply chain transparency and make it harder for bad actors to operate.
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What risk data do I need to collect for modern slavery?
Businesses need to collect risk data to create supplier profiles and aggregate reports to understand modern slavery risks. This includes inherent risks in your operations and supply chains (geography, sectors, goods/services), as well as information on policies and practices of your suppliers. The data needs to be kept updated, transformed into actionable insights, and made available to internal stakeholders, and any governments that require your company to provide modern slavery reporting.
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What is the best solution to handle modern slavery at my business?
The best solution is a preventative solution.
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Businesses should focus on regularly assessing suppliers for modern slavery risks and implementing policies and procedures to mitigate modern slavery risks. If your business implements policies to prevent your operations and direct suppliers from engaging in particular behaviours, you can require that your suppliers agree to, and have the same policies in place for their suppliers. This is the most effective way to fortify your business against bad actors who try to engage your suppliers with their products and services at some point along the supply chain.
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The best position for a business to take on the topic of modern slavery risk assessment, is a position of curiosity and collaboration; to find out what the facts might be, and work with suppliers to reduce any identified risks.​​
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How do I Reduce Modern Slavery Risks?​
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Top 5 solution must haves for responding to modern slavery challenges
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Supplier self-assessment capabilities.
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Reporting capabilities.
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Action plan / risk reduction capabilities.
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Policies and preventative measures.
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Secure data storage.
Conduct a self-assessment
Businesses should conduct a self-assessment to identify inherent risks in their operations and supply chain. This involves evaluating their geographical locations, sectors, and hiring practices to pinpoint areas of potential vulnerability.
The self-assessment should also identify any gaps in existing policies and procedures. Software solutions can help streamline the administrative work of self-assessment, making the process more efficient.
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Collaborate with supply chain partners
A collaborative approach is crucial to reduce modern slavery risks. Businesses should work collaboratively with suppliers to reduce the risk of modern slavery in their supply chain, otherwise, tension will build as every business tries to police each other.
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Conduct supplier self-assessment questionnaires (SAQ)
Businesses need to engage suppliers to collect first-hand data about modern slavery risks, processes, procedures, and policies. By using first-hand data, companies can produce more informative and accurate reports about their operations and supply chains.
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First-hand data is essential for businesses to understand how they can specifically work with each supplier to reduce modern slavery risks. The data gathered through an SAQ should be used to create a supplier risk profile to look at modern slavery risks, and should be used to generate aggregated supply chain insight reports.
Using a recognised, objective, modern slavery risk assessment framework with data gathered directly from suppliers allows companies to move beyond theoretical models and publicly available data to gain practical, actionable insights.
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Produce regular modern slavery risk reporting
Reporting on modern slavery risk involves a continuous process of assessment, analysis, and action. Reports should clearly outline the risks, the actions taken to mitigate those risks, and the benchmarks set for ongoing improvement.
Before reporting, a business must conduct a thorough assessment of its operations and supply chain to gather data in order to identify and categorise areas of risk. Modern slavery risk reports should analyse the business and its suppliers so that a risk category can be determined and assigned to each individual entity, and allow for combined supplier data to create an aggregated view of the data
A key reporting output is a modern slavery supply chain risk report, which is an aggregated report generated from a snapshot of the assessment responses from all assessed suppliers. This report should provide key modern slavery risk insights into the supply chain such as geographies, sectors, goods and services, employment practices, policies and procedures. It should used to identify areas of high risk and is a key tool for risk reduction purposes.
Businesses that are required to report on modern slavery risk to governments can use the information gathered in the reports to produce a Modern Slavery Statement in the format required by legislation.
Reporting is not a one-time task. It is an ongoing process. Risk scores and categories can change over time, due to changes in individual supplier scores, the addition of new suppliers, or the removal of existing suppliers. Regular reporting and reassessment are needed to ensure the information is up to date.
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Implement modern slavery policies
Businesses need to implement modern slavery policies, and influence the policies of their direct suppliers. Through contractual terms and flow down clauses, it is also possible to influence policy further down the supply chain with Tier 2 suppliers and beyond - even when direct contact is not possible. It begins with a single business and has a waterfall effect.
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Implement action plans for continuous improvement
It is not enough to say that a business has assessed its suppliers for risks. With increased pressures and scrutiny from governments, shareholders, and consumers, businesses now need to demonstrate the actions that they are taking post-assessment to reduce risks, and ensure protection from modern slavery over time. Continuous improvement towards risk reduction is easy when using a collaborative approach with your suppliers.
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Where do onsite audits fit in?
Onsite audits are an important method to identify modern slavery risks. However, they are costly and time consuming, so it is important for a business to take a more practical approach and conduct risk identification at a broad level first. Businesses should work with suppliers in a pre-audit process to collect the initial data for as many suppliers as possible to broadly understand their modern slavery risks before committing to an audit for specific suppliers.
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