Modern Slavery Act: What it means for an ethical and sustainable supply chain

Overseas supply chains used to be about cheap price, quality and timely delivery, but now there are other factors at play that need to be considered, and not just as an afterthought. The newest topic from a legal compliance point of view is about being ethical in sourcing products.

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Even in the light of looming trade wars and other recent international developments trying to halt/reverse the last 30 years of globalization, the global economy is hugely dependent on international trade, and unless there are other and better alternatives, we will continue to depend on trade. However, that is not to say that we can continue to blindly trust the conditions under which far-away factories manufacture the goods we sell. Certainly, consumers are concerned about the potential of appalling working conditions in these far-away factories, but they are also uneasy about job losses at home due to overseas low wage competition, product quality and a range of other factors.

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Many businesses are also concerned with what may appear to be unfair practices, when some companies make use of a non-compliant workforce, substandard materials and illegal methods, to gain a competitive advantage for their products. With the new Australian Modern Slavery Act 2018 which came into effect this year (2019), it is no longer about consumer sentiment alone, but also about legal compliance. Now is, therefore, the best time to start thinking about how to respond.

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The Strategy along with systems & processes for measuring needs to be considered and designed well in advance to enable reporting according to the legal requirements. Laying the foundations for this work ahead now will enable a better level of reporting once the deadline is up.

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Legislators intend for Large corporates to be the drivers of change. If you are a supplier to a large corporate where reporting is a compliance requirement, expect to be asked to feed-in your information, to support your clients reporting requirements.

According to research conducted in the US:

-40% of consumers are interested in ethically / Sustainably sourced products, and

-32% of consumers check the product labels for claims.

-25% of Consumers actively look for product origins when making a purchase decision.

In the following white paper (which is part 1 of 2), Carsten Primdal makes the case for why businesses need to take Sustainable Supply Chain seriously, and not just as an exercise in compliance, but also as an opportunity. And if done well now, it may even be turned into a competitive advantage down the road.

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This whitepaper includes real-life case studies, stats and an incredible amount of research into what this new legislation means for your organisation.

Download the PDF