Australia’s Modern Slavery Act 2018 (MSA) has primarily targeted larger corporations, but its implications are trickling down the supply chain to small businesses as well. A growing number of questionnaires and contractual agreements now oblige smaller enterprises to report on their efforts to combat modern slavery risks. So, how can smaller businesses navigate this intricate web without sinking under the burden of compliance?
What Drives the Flow of Information?
The MSA obliges businesses to outline the risks of modern slavery in their operations and supply chains. It also demands a description of the actions undertaken to mitigate such risks. The flow of information is often dictated by questionnaires that scrutinise your enterprise’s ethical framework, but how reliable is this information?
Two Principles Pushing Compliance Downstream
- High-Quality Information: Businesses must report on how they’ve tackled modern slavery risks in their supply chain. This often necessitates accurate, trustworthy data, making it crucial for smaller businesses to be transparent and accurate in their reports.
- Legal Obligations: Australian trade laws prohibit misleading or deceptive conduct in commerce. Thus, your answers to any modern slavery questionnaire are not only ethical obligations but also legal ones.
Two Potential Solutions for Small Businesses
- Investigate Supply Chains: This is essentially mimicking the process followed by larger companies, albeit on a smaller scale.
- Limited Reporting: Prepare a more constrained set of data that focuses on the elements of the supply chain you’ve managed to investigate confidently.
A Realistic Approach: Proactive Transparency
The most pragmatic strategy for small businesses could involve:
- Prepared Statements: Develop a document outlining known modern slavery risks in your supply chain, including limitations due to resource constraints.
- Initial Responses: Use the prepared statement as a primary response to questionnaires, setting the stage for any follow-up queries.
Conclusion
Being entangled in the web of modern slavery compliance isn’t necessarily a burden; it’s an ethical and legal obligation. Small businesses should focus on proactive transparency, giving due attention to both the risks and gaps in their supply chain knowledge.
Ready to Navigate the MSA Maze?
Loosemore Advisory can help you untangle the complex threads of Modern Slavery Act compliance. From deciphering questionnaires to preparing comprehensive compliance reports, we can guide you through each step.