Telstra Group Describes Textbook Example of How to Use Leverage to Remediate Modern Slavery Risks

Photo by cottonbro on Pexels.com Hands shuffling bank notes on a table.

If you have the time to do it, browsing through the 2,000 plus modern slavery statements published to date on the Australian Register can yield huge dividends in terms of discovering how others identify and remediate risks of modern slavery in their supply chains.

If you don’t have time to do it, The Recruiters’ Casebook will try to bring you examples that recruitment and staffing firms would do well to note.

Here’s a textbook example of how Telstra Group used its leverage to address risks which it discovered in its supply chain. The Commnwealth’s Guidance for Reporting Entities on the Modern Slavery Act 2018 (p.51) explains that “Leverage means your ability to influence the other entities to change their behavior.”

Pay special attention to:

  • how the risk was identified
  • what the risk was
  • what justification the supplier put forward
  • why Telstra Group considered the practice was unacceptable
  • what Telstra Group did about it
  • how the supplier responded
  • what the subsequent outcome has been.

Telstra engaged an independent third party to conduct site audits of one of our suppliers’ labour practices. The audit revealed evidence of practices resembling debt bondage in their Hyderabad operations in India. Under the arrangements, employees were bound to repay training costs incurred as part of their recruitment. While the supplier asserted such practices were both common and legal in India, we took the view that it was not acceptable and in breach of our Supplier Code of Conduct.

We wrote to the supplier and asked them to remove this bond immediately for all employees delivering services to Telstra and all new hires. The supplier agreed to this request.

We also asked that the bond be removed for all other employees of the supplier including those who do not perform Telstra work. The supplier agreed not to take any action to enforce the service bond provisions under existing employment contracts and to issue all employees with new contracts that do not contain service bond provisions. A follow-up audit found the changes we requested had been implemented. We were also pleased to see evidence that throughout the COVID-19 pandemic, the supplier has continued to pay all employees 100 per cent of their wages.

Telstra Group Modern Australian Slavery Statement published 13 April 2021 https://modernslaveryregister.gov.au/statements/2899/

“Debt Bondage”

In this example, Telstra Group is only saying that the supplier’s practise resembled debt bondage.

The Commonwealth’s Guidance for Reporting Entities on the Modern Slavery Act 2018 (p.78) explains that “debt bondage” occurs “where the victim’s services are pledged as security for a debt and the debt is manifestly excessive or the victim’s services are not applied to liquidate the debt, or the length and nature of the services are not limited and defined.”

Nevertheless, Telstra was sufficiently concerned about the practice to do something about it – and without getting involved in technical legal arguments about definitions.

The outcome shows what can be achieved when all parties co-operate to remediate practices that may have adverse impacts on workers and which may be questionable under values and principles of good workforce governance and supply chain stewardship.

What would you have done if you had discovered the practice or something similar in your supply chain or service network?

Andrew C. Wood

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