Most Australian organisations have modern slavery embedded in their supply chains. Look hard enough and you’ll find it too!
The 2018 Global Slavery Index estimates that there are 40.3 million people living in modern slavery-like conditions, with some 24.9 million of these (62 per cent) found in the Asia Pacific region. These figures are based on the Walk Free Foundation’s definition of modern slavery, which covers a set of specific legal concepts including forced labour, debt bondage, forced marriage, slavery and slavery-like practices, and human trafficking.
Yes, only some of these slaves are working in Australia – 15,000 according to the Global Slavery Index. However, given Australia’s insatiable appetite for buying cheap goods from Asia, it’s just not acceptable – from a business or ethical perspective – to ignore this issue.
Assessing and mitigating modern slavery impacts in supply chains is rapidly becoming an imperative for investors, businesses and governments. The NSW Modern Slavery Act (June 2018) and the Commonwealth Modern Slavery Bill (anticipated to be passed later this year) are changing organisational behaviour already, with many investors, businesses and government agencies getting up to speed on their obligations, risks and training needs.
There are some important observations to share.
The first is that investors, businesses and government organisations don’t need to be overwhelmed by what they need to do. This is because there are a number of important principles, frameworks and exemplars to guide the way, including:
- The UN Guiding Principles for Business and Human Rights: launched in June 2011, the Guiding Principles are the foundations of best practice for assessing, mitigating and remedying adverse human rights and modern slavery impacts in organisational operations, business relationships and supply chains
- ISO 20400: 2017 Sustainable Procurement – Guidance: provides principles, frameworks and best practice tools for considering environmental and social (including human rights) threats and opportunities in procurement practices
- Corporate Human Rights Benchmark initiative: assesses the performance of the largest publicly traded companies against 100 human rights criteria
The second important observation is that entities will fail to stop modern slavery unless procurement teams are engaged. In our experience, procurement teams are often under-resourced, have limited understanding of sustainability issues, and are often instructed to focus on reducing costs.
While bottom-up initiatives are important, the imperative for action on modern slavery must come from the top. Procurement teams need to be fully engaged and supported to play their important role – this is where the rubber hits the road!
Another important observation is that a key principle of modern slavery legislation is encouraging businesses and government organisations to work together to improve supply chain transparency. There are many great examples when industry and non-governmental organisations (NGOs) have joined forces to engage suppliers on modern slavery.
It sounds counterintuitive, but the more we find and report it, the better the chance that perpetrators will be exposed and stopped. A change of mindset is needed from “protecting our reputation” to “exposing the culprits”. Working together, investors, businesses, governments and NGOs have the potential to be a powerful force in the eradication of modern slavery from supply chains.
Lastly, eliminating modern slavery is best achieved at a sector level. This is because many organisations participate in the same supply chains and often share the same suppliers. Much can be achieved by sharing experiences and developing common supplier engagement tools.
Investors – both super funds and investment managers – also have obligations under Australia’s new modern slavery legislation. This includes both in their own operations and their investment portfolios.
For this reason, the Responsible Investment Association of Australasia (representing 220 members, with $9 trillion funds under management) established a Human Rights Working Group. The group aims to build investor understanding and capacity to engage companies.
Mark Lyster is co-founder and managing director of Action Sustainability – a sustainable business and supply chain management consultancy – and chair of the Responsible Investor Association of Australasia’s Human Rights Working Group.
Action Sustainability will co-host a series of master classes in September focusing on the requirements and opportunities in the infrastructure sector. The master classes will be co-hosted by the Australian Supply Chain Sustainability School and the Infrastructure Sustainability Council of Australia, with support from NGOs STOP THE TRAFFIK, the Business and Human Rights Resource Centre and Verite.