Modern slavery risk mitigation for suppliers

Suppliers play a vital role in mitigating the risk of modern slavery in Victorian public health sector supply chains. To reduce risk and affect meaningful change, we encourage suppliers to take a proactive stance against modern slavery.

Suppliers on HSV collective agreements are required to:

  • comply with HSV supplier mandatory minimum standards
  • if applicable, meet requirements under the Modern Slavery Act 2018

Suppliers are also required to comply with the Victorian Government’s Buying for Victoria Supplier Code of Conduct and to follow the Fair Jobs Code for suppliers and businesses.

The Modern Slavery Act

Under the Modern Slavery Act 2018, suppliers with annual revenue of at least $100 million are required to prepare an annual modern slavery statement. Businesses with revenue under $100 million can report voluntarily and are encouraged to do so.

To prepare a modern slavery statement, refer to the Commonwealth Modern Slavery Act 2018 Guidance for Reporting Entities. The guide covers the actions to take to meet obligations under the Act.

For an overview of modern slavery, information on the Modern Slavery Act and how to prepare and submit statements, visit the modern slavery page on the Australian Government Attorney-General’s Department website. For further guidance, suppliers should access the Attorney-General’s Department modern slavery resources.

HSV supplier mandatory minimum standards

We are introducing modern slavery mandatory minimum standards that will apply to all HSV collective agreement procurement activity commencing from 1 July 2024.

The standards aim to mitigate modern slavery risks in the supply chains of goods and services we source for Victoria’s public health services. The standards are designed to raise supplier awareness about, and work to mitigate the risk of, modern slavery in their supply chains. Suppliers are expected to build their capacity to mitigate risks over time.

The standards form part of HSV’s modern slavery risk mitigation program.

We will work with suppliers on implementing the standards into their operations and supply chains and we will conduct annual risk assessments to track progress over time.

Mandatory minimum standards and examples

The size of a supplier business will determine how each standard should be applied within the business. Small to medium businesses are not expected to show the same depth of compliance as large organisations. We have included examples of how this might work in your organisation under each of the standards set out below.

Standard 1 – Modern slavery policy

Suppliers must have a written policy that shows a commitment to addressing modern slavery risks faced by their business. The policy should be:

  1. communicated to key stakeholders
  2. embedded throughout the organisation
  3. integrated formally into contracts where appropriate
  4. incorporated into internal organisational training
  5. approved at the highest organisational level and any breaches should be reported transparently.

Example: small to medium supplier

Supplier A is a small supplier of pharmaceutical products. Supplier A does not have a standalone modern slavery policy. To meet standard 1, it has included a section in its business strategy that states a commitment to ethical sourcing by avoiding products and services from situations of forced labour. Supplier A takes relevant steps to ensure it meets this commitment.

Example: large supplier

Supplier B is a large, global pharmaceutical company. Supplier B has a comprehensive modern slavery policy integral to its corporate social responsibility charter. The policy was approved by the company board and has been communicated to key stakeholders including Supplier B’s employees, suppliers and contractors. The policy is regularly reviewed and forms part of Supplier B’s governance practices.

Standard 2 – Due diligence

Suppliers must take actions to identify, prevent, and reduce modern slavery risks in their supply chains. Actions can include:

  1. having a supplier code of conduct
  2. incorporating modern slavery clauses into contracts with third party providers
  3. pre-screening potential suppliers for their risks
  4. undertaking regular supplier risk assessments, including safeguarding against workers paying recruitment fees for their employment
  5. demonstrating real commitment to supply chains free of modern slavery.

Example: small to medium supplier

Supplier A is a small, Australian supplier of medical equipment. Supplier A requires all new employees to provide official documentation that establishes their right to work in Australia. This process of due diligence helps ensure Supplier A is not inadvertently employing people under conditions of modern slavery.

Example: large supplier

Supplier B is a large manufacturer of medical equipment and has rigorous due diligence processes. Supplier B incorporates modern slavery clauses into new contracts and conducts pre-screening of all potential suppliers prior to engaging with them. Supplier B’s pre-screening process involves using a modern slavery risk assessment tool to assess a potential supplier’s risks and the actions it will take should any significant risks be identified.

Standard 3 – Grievance mechanism, response and remediation

Suppliers must have a formal process for employees and suppliers to report modern slavery concerns. This includes a process for responding to and remediating incidents of modern slavery. The grievance process should be accessible to:

  1. employees and contractors
  2. external parties such as suppliers or communities affected by supplier business activities.

Suppliers should also require their suppliers to have grievance processes.

Example: small to medium supplier

Supplier A is a small business that specialises in medical supplies. Supplier A has a dedicated email address for reporting grievances. Employees can report concerns and suggestions by emailing the address. The process is confidential and can be anonymous. Supplier A follows up on concerns and suggestions raised and escalates to relevant authorities when required.

Example: large supplier

Supplier B is a major metropolitan hospital. Supplier B has a robust grievance reporting and remediation process available in multiple languages that all employees, patients, and suppliers can access. The process is transparent. Affected individuals are kept safe from repercussions, updated regularly throughout the process and informed about the outcome. Supplier B’s remediation process involves providing biennial training to its employees and external stakeholders. Supplier B also has strong connections with relevant authorities.

Standard 4 – Training

To raise awareness and build capability for identifying and preventing modern slavery risks, suppliers must provide training to their employees and within their supply chain. This can include:

  1. providing specific modern slavery risk training for employees in relevant business functions
  2. providing general modern slavery risk training to the whole workforce
  3. engaging with their own suppliers to increase awareness of modern slavery risks.

Example: small to medium supplier

Supplier A is a small supplier of personal protective equipment. Supplier A requires its procurement employees to complete annual modern slavery risk training. Supplier A records the training and seeks feedback from employees to identify opportunities to make improvements to the training over time.

Example: large supplier

Supplier B is a large, global pharmaceutical distributor. To raise awareness on modern slavery risks, Supplier B conducts extensive modern slavery training for all employees and contractors, and throughout their supply chain. The training is compulsory and is required to be completed biennially. Supplier B records the training and seeks feedback from those who have completed the training to identify opportunities to make improvements to the training over time. Supplier B includes information on the training in its annual statement required under the Modern Slavery Act.

Standard 5 – Determining effectiveness

Suppliers must be able to describe measures they use to identify the effectiveness of the actions they take to reduce or mitigate modern slavery risks. This can include:

  1. monitoring and reviewing the modern slavery policy and its implementation
  2. reporting on supplier due diligence activities
  3. tracking and reporting on employee and/or supplier training
  4. reporting on their grievance process and how effective it is.

Example: small to medium supplier

Supplier A is a medium-sized supplier of medical items. Supplier A sets key performance indicators to support modern slavery risk reduction and mitigation. For example, they aim to provide modern slavery risk mitigation training to all employees within the first year. The following year, Supplier A broadens its training program to include the first tier of its supply chain. Supplier A demonstrates it is progressively building modern slavery risk mitigation capacity by including different parts of its business in training over the ensuing years.

Example: large supplier

Supplier B is a large multinational healthcare corporation. Supplier B sets key performance indicators including undertaking regular audits, conducting supplier risk assessments, and providing employee training. Supplier B benchmarks its practices against applicable industry standards and includes this information in its annual statement required under the Modern Slavery Act. To assess the effectiveness of its modern slavery policy, Supplier B measures its performance against its key performance indicators and industry standards.

Supplier risk mitigation training

We offer modern slavery risk mitigation training for suppliers.

Additional resources