Modern Slavery

Modern slavery refers to exploitative practices such as human trafficking, forced labour, debt bondage, forced marriage and deceptive recruitment. In these instances, offenders use coercion, threats or deception to exploit victims and undermine their freedom. Unfortunately, Walk Free International estimates modern slavery impacts over 50 million vulnerable people around the world, including in developed nations such as Australia.

Managing modern slavery-related investment risk

If a company fails to uphold labour and human rights, such as through being complicit in modern slavery, it can cause reputational damage and expose them to fines or other penalties. As such, modern slavery is a risk that investors must consider alongside other investment risks.

At Paradice, we have developed a dedicated modern slavery risk assessment tool to support our investment teams in identifying a company’s potential exposure through its operations or supply chain. The tool highlights companies requiring further analysis in terms of investment risk, and risk to people (in line with the Modern Slavery Act).

Modern Slavery Act

In 2018, the Australian Government joined other jurisdictions in introducing legislation to address modern slavery. The Modern Slavery Act 2018 (Cth) requires firms over a certain size to publish an annual statement on actions taken to assess and address modern slavery risks in their global operations and supply chains. We welcome its introduction and also acknowledge our role in addressing modern slavery as a responsible business and a supplier ourselves. Paradice as a firm is not subject to the Act, but two of our funds have previously met the criteria and published Modern Slavery Statements for FY2021 which are available here.

The Act focuses on the risk to people, not business or investment risks linked to modern slavery. When supporting our clients to meet their obligations under the Act, we make sure we apply a people-focused lens when considering modern slavery within the investments made on their behalf. As such, we focus on the severity of the risk in light of outcomes which would cause the greatest harm to people.

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