The Australian Human Rights Commission’s has partnered with KPMG Australia to produce a guide on Modern Slavery targeted at the Construction and Property Industry (the “Guide”). The Guide, which is a useful resource for the Property and Construction Industry, particularly for smaller reporting entities, and suppliers to reporting entities, highlights the importance of these sectors in addressing modern slavery, noting that:
7% of the global workforce is employed by the property and construction sector;
An estimated 18% of modern slavery victims are found in the construction industry; and
22% of forced labour victims are found in the manufacture and production of raw materials including key suppliers for the construction industry.
Why Is the Construction Industry at a High Risk of Modern Slavery?
The construction industry, its operations and it supply chains hold a relatively high risk of modern slavery (even in Australia) for a variety of reasons, including:
Business models based on outsourcing and subcontracting, which result in long and often complex supply chains with poor visibility. A single supply chain for a major contractor can consist of hundreds of sub-contractors, labour agencies and material suppliers. This means it can be difficult to have oversight and control over the recruitment and employment practices of suppliers and subcontractors;
The prevalence of low-tier suppliers (i.e. brick manufacturers) operating in countries with high geographical risks of modern slavery, with low-regulated environments, low levels of education and public awareness, and high levels of corruption;
Increased demand for construction fuels an increased demand for a low-skilled labour force, often comprised (in Australia and overseas) of migrant workers, who are inherently at a higher risk of modern slavery practices.
Examples of Modern Slavery in the Construction Industry
The Guide provides examples of actual cases of modern slavery occurring in Australia and worldwide in relation to the construction industry, including:
Forced labour and child labour having been found in brick kilns in countries such as India, Pakistan, Bangladesh and Cambodia. Brick making is also linked to debt bondage, and poor working conditions resulting in serious injuries;
Australian companies in the construction industry charging illegal visa fees and underpaying wages to migrant workers. These workers were paid at almost half the rate of Australian fitters and stopped receiving any wage after six weeks, which resulted in the workers becoming homeless and forced to sleep and live on an office floor.
The presence of Korean workers in debt bondage on Australian construction sites, building offices and residential blocks.
What do we need to do?
The Guide report highlights that a key initial focus of an effective response to modern slavery risks in the construction industry will require:
Consolidation of supplier information held across the business or group;
Development of a modern slavery policy that can be implemented through procurement and commercial practices.
Mapping supply chains and identifying risks is an ongoing process, and as you achieve greater visibility over your supply chains, modern slavery risks can be assessed and addressed through contract terms, auditing and monitoring, and with the degree of oversight and intervention being proportionate to the level of modern slavery risk.
With the understanding that many suppliers in the construction industry have or will soon be asked to report on their supply chains and modern slavery risks, it will also be important for reporting entities and their suppliers to work together to minimise the reporting burden on smaller suppliers, and work with industry groups to try and set a reporting standard for the industry so as to achieve uniformity in reporting. This will allow suppliers working for multiple reporting entities to be able to work to one reporting standard, rather than being required to complete multiple different assessments or reports on a yearly basis.
Industry wide collaboration and peer learning can also increase the ease and effectiveness of your response to modern slavery risks and can offer important leverage to secure greater supplier compliance with new expectations regarding modern slavery and other responsible sourcing considerations.
Property Management and Building Services
Outside of construction, the wider property industry encompassing property management and building services are also at a high risk of modern slavery. This is because:
Security and maintenance work tends to be outsourced, and carry base-skill labour risks;
Asset and tenant management can involve relationships with tenants who operate in hospitality, beauty and other such services which have higher risks of association with forced labour and trafficking practices;
Cleaning services have been associated with numerous instances of exploitative labour in Australia due to outsourced business models, reduced visibility over labour standards, and workers from vulnerable populations, including migrants.
Terri Bell & Co can assist reporting entities understand their obligations under the Modern Slavery Act 2018 (Cth) and the steps they need to take to prepare their modern slavery statement. We can also assist suppliers to reporting entities with their activities in relation to modern slavery.
Call us on 61 2 9191 9856 or email firstname.lastname@example.org for more information or to book your confidential discussion.
IMPORTANT NOTICE - The information contained in this article is not intended to be comprehensive. It is general in nature and is not intended to be used as a substitute for legal, financial or other professional advice. You must seek specific professional advice tailored to your personal circumstances before taking any action based on this article.
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