Ed note: The Sustainability Report is pleased to present this article from Katherine Christ of the University of South Australia and Roger Burritt of the Australian National University
Dr Katherine Christ and Professor Roger Burritt
On 7 December the Joint Standing Committee for Foreign Affairs, Defence and Trade released its final report in relation to a Parliamentary Inquiry regarding whether a Modern Slavery Act was needed in the Australian context. The Inquiry was designed to consider ways in which Australia could combat the growing problem of modern slavery which includes practices such as forced labour, child labour and debt bondage. The report ‘Hidden in Plain Sight’ offers a number of recommendations and with bipartisan support it seems clear that the future will see legislation drafted and a Modern Slavery Act enacted. But what does this mean for Australian business?
Although many people are unaware of the problem, modern slavery is embedded within many of the products Australian consumers purchase and use on a daily basis. This occurs largely through the supply chain and is most prominent in low value, upstream activities that are labour intensive and occur in developing countries, although examples have been found in Australia as well, most commonly in agriculture. It is also true many managers remain unaware of their organisation’s involvement (inadvertent or otherwise) in perpetuating the misery of those caught up in slavery-related activities offshore. The Rana Plaza Garment Factory collapse in Bangladesh is a classic case in point. More than 1,000 lives were lost yet the companies caught up in the disaster and subsequent scandal were quoted as being horrified to learn their products were being produced in this complex. Whether this was a case of ‘willful blindness’ or genuine surprise the writing was on the wall – it was time for business to step up.
If business is partly responsible for perpetuating modern slavery through ongoing requests for cheaper products delivered at faster rates, it makes sense the business sector can also be a powerful actor in addressing and eradicating the problem. And this is what is recognized in the Inquiry’s Report.
Among other things the report recommends introduction of a mandatory supply chain reporting requirement which will affect all businesses with a revenues of $50 million or more. Recommendations will also apply to Government procurement. A key requirement is that affected businesses will need to produce an annual modern slavery statement. This is to be considered by the Board and must be signed off by at least one director after which the statement must appear on the organisation’s website. In a move largely consistent with similar legislation in the UK, it is recommended modern slavery statements contain the following information:
- the organisation’s structure, its business and its supply chains;
- its policies in relation to modern slavery;
- its due diligence and remediation processes in relation to modern slavery in its business and supply chains;
- the parts of its business and supply chains where there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk;
- its effectiveness in ensuring that modern slavery is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate;
- the training about modern slavery available to its management and staff; and
- any other actions taken.
Although businesses will be investing time in understanding the new environment for addressing modern slavery it has been recommended that appropriate resources be provided to assist with building understanding and training of managers and employees, as well as community awareness.
- resources to raise awareness of the modern slavery reporting requirements;
- training for entities on how to report;
- advice on mapping supply chains;
- writing to entities that are required to report;
- raising public awareness about modern slavery;
- funding training for entities required to report, as well as training for frontline services, government departments, NGOs and embassies;
- including a definition of supply chains for goods and services (including financial services) that considers the OECD Due Diligence Guidance, and which covers aid, donations and giving by government and entities; and
- publishing a list of products or services, people groups, areas and industries with a high risk of modern slavery, both within Australia and internationally.
Some multinational companies (MNCs) have already engaged with modern slavery issues in their supply chains as they have already developed and published statements in line with the UK Act. Nevertheless the Australian recommendations have been developed based on best international practice and MNCs also will need to revise their approach to suit.
Business will first need to recognize that top management must play a role in accepting responsibility for and overcoming modern slavery. Then the allocation of responsibilities to appropriate staff will be necessary. Authority needs to be given to specific sustainability, corporate social responsibility, or modern slavery managers because this is a new and ongoing function. Communication managers need to be aware that triennial reviews of the Act are to be introduced and will likely expand the scope of reporting to include other human rights in due course. Responsibility for ongoing engagement with a new Anti-Slavery Commissioner will need to be instituted. Procurement, production and marketing managers will need to become aware that the taint of modern slavery associated with products and services may lead to lost reputation, penalties and in extreme cases failure of the business and criminal conviction. Finally, human resource managers will need to review employee selection, health and safety policies to ensure channels are established for potentially vulnerable employees to be confident about revealing instances of modern slavery.
A new corporate culture is being set in motion, one which does not turn a blind eye on modern slavery practices accepted in order to make additional profit. Business has the choice to lead or be laggards but one thing is clear now is the time to become familiar with the new mind set on modern slavery.
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