Modern slavery in context

Most of us would be aware that supply chains are becoming increasingly global. This makes it a significant challenge to determine whether or not the food we consume, the electronics we buy and the goods and services we use are provided through the involvement of child labour, sub-standard employment conditions, or the outright abuse of basic human rights.

The Asia-Pacific region is estimated to contain two thirds of the 40 million persons trapped in modern slavery conditions1 and with 71% of Australia’s two-way trade being based in this region2, the risk of Australian businesses, directly or indirectly, supporting industries reliant on modern slavery is significant.

What is modern slavery and how is it defined?

Modern slavery is defined as the commodification and exploitation of people for financial gain. As of 2016, there were 5.4 victims of modern slavery for every thousand people, totalling more than 40 million persons globally1. Victims are typically found in the manufacturing, construction and agriculture industries3 and the International Labour Organisation estimates profits derived from slavery, servitude, forced labour and human trafficking to total US$150 billion per year1.

Notably, modern slavery refers to only the most serious of criminal exploitation. The spectrum from decent work to modern slavery is illustrated below.




Geographic distribution of modern slavery

The impacts of modern slavery are primarily experienced in the world’s least developed countries, particularly in nations with a history of political instability, mass displacement and high levels of discrimination1. Regions of significant concern include the majority of Africa, Eastern Europe, and much of Asia.

Research conducted by the Global Slavery Index identifies countries where the exploitation itself is taking place, detailed above, identifying prevalence by country from high to low. Importantly, ‘low prevalence’ does not mean zero prevalence, particularly when the supply chain for the product in question may originate far from the country in which the product or service is consumed.

Australia for example is estimated to contain 15,000 people living in slavery-like conditions at any given time4. However, as mentioned, the Asia-Pacific region is estimated to contain two thirds of the 40 million persons trapped in modern slavery and with significant trade-flows between the two, the risk of Australian companies supporting industries reliant on modern slavery is significantly higher than the initial numbers might imply.

Regulatory response

Since the turn of the century there has been a mounting global push to better understand and manage corporate supply chains, in terms of both governance and legislation2. Supply chain transparency is viewed as essential to ensuring that corporate governance practices do not cause, or contribute to, criminal exploitation.

The United Kingdom (UK) was the first country to formally recognise the need to address modern slavery with the Modern Slavery Act 2015. Legislation requires all commercial organisations in any sector with a global annual turnover of £36 million or above to disclose the steps taken to address modern slavery within their supply chains3.

In December 2018, Australian Parliament followed by enacting the Modern Slavery Act (MSA), which commenced in January 20193. The Act requires organisations with an annual consolidated revenue of more than $100 million to prepare a publicly available statement which identifies and addresses the risks of modern slavery in their operations and supply chains, and reports on the actions being implemented to address them4.

Cromwell committed to leading the property industry’s response

In line with Cromwell’s sustainability framework and commitment to ethical practice and transparent reporting, Cromwell recognises there may be risks of modern slavery within aspects of our business activities. We are committed to ensuring we comply with the MSA and support best practice and strong corporate citizenship within our operations and across the property industry.

Cromwell has started collaborating with its construction partners to introduce modern slavery training and awareness as part of contractor induction processes, and is committed to working with our supplier partners to address the modern slavery risks in our supply chains and operations.

Led by the Property Council’s National Sustainability Roundtable, Cromwell is collaborating alongside a select group of industry-leading companies to co-create an online database that would provide a consistent framework for reporting and reduce the reporting burden for suppliers. The framework and subsequent database will be piloted collectively, with the intention of opening it to the entire property industry to use and share information7.

The national database will enable participants to identify risk in supply chains through a detailed evaluation survey of suppliers. The database combines numerous external risk databases which align specifically to geographic location and business activity. The database brings together the strength and depth of the property industry to share knowledge and create a unified approach to effect change and mitigate the risks of modern slavery.

1. International Labour Organisation, Global Estimates of Modern Slavery, 2017
2. Australian Trade and Investment Commission, Economic Analysis, 2019
3. Ernst & Young, The UK Modern Slavery Act 2015, 2017
4. Global Slavery Index, Unravelling the Numbers, 2018
5. Thomson Reuters Foundation, TIMELINE Milestones in the fight against modern slavery, 2018
6. Department of Home Affairs, Draft Guidance for Reporting Entities MSA 2018, 2018
7. Property Council of Australia, Modern Slavery and the Long Race to the Top, 2018