Exploring effective indicators of modern slavery risk: on-site audit insight

The pervasive issue of modern slavery, encompassing forced labour, child labour, debt bondage, and deceptive recruitment practices, continues to afflict an estimated 50 million individuals globally. In response, the Australian government has enacted the Modern Slavery Act 2018 (Cth), which mandates eligible entities to identify and mitigate risks within their supply chains, as well as to issue publicly available Modern Slavery Statements. The 2023 independent review of the Australian Modern Slavery Act highlighted the need to strengthen reporting entities’ supply chain due diligence. There has been heated debate about what effective risk-based approach can be adopted. The existing literature examining indicators of modern slavery risk based on empirical case studies remains limited and has primarily focussed on conceptual frameworks and theoretical approaches. This study aims to present the prevalent trends and common issues that have been identified via over 100 on-site audits, particularly in the context of China, where Australia’s significant reliance on manufacturing and production raises salient human rights considerations. The most prevalent major non-compliances include deficiencies in emergency and fire safety, excessive working hours, and remuneration-related concerns. These critical issues serve as substantial indicators of potential modern slavery risks, which provides valuable guidance for organisations to closely monitor these indicators and implement robust strategies to identify and mitigate modern slavery risks within their supply chain.