Anti-slavery commissioner calls for smarter due diligence for SMEs

Australian anti-slavery commissioner has proposed to cut out repetitive questionnaires for more targeted modern slavery checks for small and medium sized enterprises (SMEs).

The paper Getting the Balance Right: Modern Slavery Due Diligence and SMEs explores practical ways to reduce unnecessary burden on SME suppliers while addressing modern slavery risks.

Anti-slavery commissioner Chris Evans said SMEs are increasingly asked to complete questionnaires, agree to contractual obligations and provide assurance, often for multiple customers, at different times and in different formats, despite usually falling outside reporting obligations under the Modern Slavery Act.

"SMEs are essential to Australia's response to modern slavery. This is not a call for less due diligence, it is a call for smarter due diligence," Evans said.

"Modern slavery risks can arise in businesses of any size, including SMEs. The challenge is ensuring that due diligence efforts are focused on genuine risks, rather than repetitive administrative processes."

The paper proposed to embed greater proportionality, so information requests to suppliers match the level of risk and a common due diligence infrastructure, so supplier information can be provided once and shared across customers, with mutual recognition of social compliance audits.

It also suggests sector-level collaboration and capacity building, with SMEs at the table.

The paper also notes concerns about administrative burden should not be interpreted as suggesting that SMEs present lower modern slavery risks or should be subject to less scrutiny, and risks of severe exploitation can arise within businesses of any size.

"The policy challenge is, therefore, not whether SMEs should be engaged in modern slavery due diligence efforts, but how reporting entities can engage SME suppliers in ways that are proportionate and risk based," the paper read.

"Better targeting due diligence towards higher-risk circumstances could strengthen risk management outcomes while reducing the administrative burden."