A working paper supporting Australian banks to operationalise modern slavery due diligence
KPMG Australia and the Australian Banking Association’s Modern Slavery Working Group have collaborated to produce this first edition working paper: Typologies and Indicators of Modern Slavery. The paper provides a point of reference and common language for banks to operationalise the United Nations Guiding Principles on Business and Human Rightsi in the Australian banking context.
This edition focuses on the typologies and indicators of modern slavery in the forms of forced labour, labour exploitation, and debt bondage, and offers guidance on two high-risk sectors, agriculture and construction. Future editions will expand on other forms of modern slavery and other high-risk sectors.
Financial institutions may be connected to modern slavery and human trafficking through their own operations, or through their business relationships. Because the financial sector is so intertwined with the rest of the economy, financial sector action can help change the way the whole global economy works. The financial sector has a unique opportunity, at this critical juncture, to lead the transformation of our global economy to address modern slavery and human trafficking.
Finance Against Slavery and Trafficking Initiativeii
Modern slavery is a pervasive risk across many sectors, industries, and geographies, requiring a collective response from governments, regulators and authorities, communities, and corporates – including banks. Legislation mandating modern slavery reporting is in place, both in Australia and abroad, and mandatory human rights due diligence legislation is evolving. These legal requirements are coupled with increased expectations and demand from interested stakeholders including investors, employees, and the wider community upon organisations to act.
Guidance and tools for Australian banks to combat modern slavery
This paper collates various resources, expertise, and the experiences of ABA members to give an overview of the current modern slavery risk landscape and the banking industry’s response. It provides practical modern slavery due diligence guidance and tools, alongside extractable high-risk sector guides for the agriculture and construction sectors, which can be used in the identification of modern slavery risk. ABA members will also have access to a member-facing version containing additional tools and case studies, available directly from the ABA.
The working paper includes detail on:
- How modern slavery is connected to the banking industry
- How modern slavery manifests and may be detected
- How banks may embed human rights due diligence to address modern slavery
Note: The paper does not provide an agreed, implementable protocol for the Australian banking industry nor does it prescribe any obligations on individual banks. The ABA does, however, encourage members to embed the shared learnings and approaches into their internal policies and processes.
Enhancing the strength of modern slavery due diligence through collaboration
Australian banks play an important role in detecting and reporting financial crimes such as money laundering and fraud and recognise that industry-wide practices are critical to this endeavour. Detecting and reporting modern slavery, as a crime under international and Australian law, is no different, and it often manifests alongside these financial crimes.
A collective response to modern slavery risk, which like all risk evolves over time, is strengthened by internal and external information sharing and collaboration. This working paper is the product of such collaboration. It supports the industry to help prevent and address modern slavery through detection and reporting, and to use its influence to encourage responsible practices across its business relationships.