Positive changes to Green Star - What product manufacturers need to know

The Green Building Council of Australia is updating the existing Green Star rating tools.

I had the great privilege of attending the Green Building Council of Australia’s (GBCA) Responsible Products and Materials Seminar in October. It was an event bringing together professionals from the building and construction industry – architects, designers, product manufacturers, retailers and procurement managers – to learn about the importance of making sustainable and socially responsible products and material choices.

One of the highlights of the day, apart from knowledge-sharing with other attendees, was the segment hosted by Nicole Sullivan, GBCA’s Senior Manager – Green Star Solutions.  Nicole took us through a journey of discovery of how future Green Star credits will apply to product manufacturers.

She started by asking – WHY ARE WE HERE?

Answer – “Because:

• Resources matter

• Our environment matters – think “life cycle picture”; every tier in the supply chain can impact resources

• Health and wellbeing matters – we need to create healthy indoor environments

• Jobs matter – consider the people in your supply chains

• Quality matters, and

• Products and materials can have a significant impact on all these issues

“We want to equip and support you in a future of sustainable products and materials, and for specification to be there for you”. This means that the ongoing issue of product substitution, which has been plaguing the building and construction sector for decades, should be addressed within the new rating tools. 

We have an issue with resource overconsumption. There have been significant increases in consumption for biomass, minerals, metals and fossil fuels. In 2005, the combined total for these commodities was 58 billion tonnes, the prediction for 2030 is 100 billion tonnes.  Our planet can’t sustain this growth.

So, how will Green Star for New Buildings address these important issues?

Green Star Future Focus

We know the Green Star for New Buildings rating tool will feature eight new categories. Each category represents an issue that industry stakeholders have identified as being critical to creating sustainable built environments in the next decade.

The eight categories are:

• Responsible

• Healthy

• Resilient

• Positive

• Places

• People

• Nature

• Leadershi

  “Green Star for New Buildings provides a new definition of a sustainable building”.[1]

New Green Star rating tool – Philosophy for sustainable products

We got a sneak peek into what the new requirements under Green Star will mean for product manufacturers.

The philosophy centres on broad, holistic sustainability, which means Green Star will reward manufacturers for increasing their sustainability credentials and initiatives. In addition, all product claims are to be measurable, reportable and will be third-party verified.

How this looks exactly, we won’t know until we see the draft version of the credits for Green Star for New Buildings, due in December 2019.

But Nicole did introduce the new categories that are relevant for product manufacturers –

“These are the different categories, this is our thinking, and this is where it will be heading”, so let’s start with:

RESPONSIBILITY – manufacturing avoids significant environmental impact by implementing measures such as:

• ·Environmentally responsible certification – stewardship schemes that have strong environmental content

• Manufacturing – Environmental Management Systems (EMS) ISO14001 – this involves EMS ISO14001 certification for larger companies, and small to medium-sized organisations will need to have their EMS third-party audited

• Carbon neutral certified products – to be purchased by the project, i.e. for the Green Star Project

TRANSPARENCY – Product contents and environmental impacts should be transparent and meet high standards:

• Environmental impact declaration – Environmental Product Declarations (EPDs)

• Content declaration – Verified declaration of potentially harmful content (i.e. are there any hazardous or toxic substances like carcinogens in the product ingredients)

• Holistic sustainability certification – Type 1 Ecolabels (for example, GECA)

STEWARDSHIP – Supply chain is operated ethically; it respects human rights and has low environmental impact:

• Holistic supply chain stewardship certification – with holistic sustainability content

• Human Rights verification – verified claim regarding human rights in supply chain

• Ethical business practice – verified claim regarding ethical business practice

FORESIGHT – Manufacture for low carbon and circular economy, which means:

• 10% lower embodied carbon in 4 and 5 Green Star buildings

• 20% lower embodied carbon in 6 Green Star buildings

Throughout the Responsible Products and Materials Seminar, there were three areas of focus, three things that kept popping up in almost every presentation.

Firstly, the use of Life Cycle Assessment to understand not only the product’s environmental impacts but equally importantly, the CARBON footprint. 

Secondly, modern slavery, human rights and supply chain were weaved throughout the conversation.

And thirdly, the need to understand product ingredients, especially regarding toxicity and human health, was emphasised; low toxic and non-hazardous materials set the standard.

Conclusion

This is really exciting, a positive move from the GBCA and really bold!  It will be a fight to the top, which is what we need if we want to see any real, lasting impact. We should expect to see product manufacturers rewarded for taking the lead in sustainability.

The draft version of the Green Star credits for Green Star for New Buildings is due in December. GBCA want to hear from you, from everyone – architects, designers, builders, product manufacturers – they want your feedback on the draft credits. It’s expected that the consultation period will run from December through to February 2020, with Green Star for New Buildings being released mid 2020 so keep your eye out for further blogs on this topic!

And start considering - is your business ready to meet the credits for Green Star for New Buildings?

Additional

If you want to learn more about the future of Green Star, the GBCA has posted an article on their website.

The ultimate challenge for sustainable building, 10 April 2019.

Endnotes

[1] “Green Star for New Buildings: A Future Focus consultation paper”, p19, Green Building Council of Australia, https://gbca-web.s3.amazonaws.com/media/documents/consultation-paper.pdf

How is the Commonwealth Modern Slavery Act (2018) affecting product manufacturers?



Introduction

During the 11 years I’ve been working with product manufacturers, industry awareness of environmental issues has expanded to now include social impacts, which means addressing human and labour rights and modern slavery risks.

Environmental and social responsibility is becoming an important part of doing business. My clients are being asked to complete Sustainability Supply Chain Self-Assessment Questionnaires and to sign Suppliers (Vendors) Codes of Conduct. We are also seeing social and environmental compliance requirements included in tenders, government procurement contracts, and in companies’ terms and conditions.  

While some multinationals have been addressing human rights for decades and using the UN Guiding Principles on Business and Human Rights standards to inform their human rights strategies, awareness of the need for human rights compliance is extending more broadly across the industry now due to Australia’s recently adopted modern slavery legislation.

In this blog, we:

• examine local and global modern slavery legislation

• take a look at what the building and construction industry, the Green Building Council of Australia (GBCA) and government are doing to tackle modern slavery

• identify the role business has to play in addressing modern slavery risks, and provide guidance on how to get started!

Global modern slavery legislation impacting Australian companies

In 2015, the UK Government enacted the UK Modern Slavery Act (2015), which requires organisations with an annual turnover of £36 million (approximately AUD $ 65 million) to publish an annual modern slavery statement. This statement outlines the measures they have taken to assess, address and prevent modern slavery occurring in their supply chains.

The Act not only includes domestic entities but foreign corporations as well. Consequently, there are at least 15 Australian companies that are already reporting under the UK Modern Slavery 2015 Act. Companies include Lendlease, Multiplex, Qantas, Westpac, NAB, Macquarie Bank, ANZ, Rio Tinto, Wesfarmers, Brambles and BHP Billiton.

Because of this, in recent years we’ve seen Australian companies more proactive in the human rights and modern slavery space.

Local legislation - Commonwealth Modern Slavery Act 2018

The Commonwealth Modern Slavery Act (2018) came into effect in Australia on 1 January 2019. It requires national and foreign entities with an annual turnover of over AUD $100 million to report on the steps they are taking to address the risk of modern slavery in their business operations and their supply chains.

Entities affected by this legislation are required to produce an annual modern slavery statement. The statement must outline:

• the reporting entity’s structure, operations and supply chains

• a description of the risks of modern slavery practices in their operations and supply chains

• actions taken by the reporting entity (and any entity that it owns or controls) to assess and address those risks, including due diligence and remediation processes

• assessment of the effectiveness of such actions

To ensure high-level commitment, the statement must be approved by the board of directors (or equivalent) and signed by a director.

Smaller entities that do not reach the reporting threshold of AUD $100 million can opt-in and voluntarily report.

The Commonwealth Modern Slavery Act 2018 was based on the UK Modern Slavery Act (2015), and although there are some similarities, there is a significant difference – the Australian Act has seven mandatory reporting requirements, which are not included in the UK Act.

This will mean that reporting entities will produce more detailed modern slavery statements in response to the Australian legislation than those submitted under the UK Modern Slavery Act (2015).

WHO does the Act apply to?

The Act applies to all types of Australian and foreign entities carrying on business in Australia, including:

• individuals

• partnerships

• associations

• legal entities such as companies, trusts, universities, superannuation funds and investment organisations

• commercial entities and not-for-profits such as charities

• Commonwealth Government entities

• Corporate Commonwealth entities

If you supply products or services to these entities or form any part of their supply chain, then there is an expectation that your organisation will comply with the intent of the legislation. This means you are required to assess and address the risk of modern slavery in your business operations and your supply chains.

What is the building and construction sector doing to meet legislation requirements?

The Property Council of Australia

Two articles posted by the Property Council in 2018 indicate that the property industry supports the Modern Slavery Act and is committed to working with government and suppliers on addressing modern slavery risks.[1]

According to Davina Rooney, chair of the Property Council’s National Sustainability Roundtable and the recently appointed CEO of the Green Building Council of Australia, the Property Council see this as a non-competitive space, and they have been collaborating with industry for some time.[2]

The Property Council’s National Sustainability Roundtable, which includes thirteen of the industry’s leading companies, has collaborated to develop a standardised questionnaire, delivered via an online platform. Its designed to streamline the process for both suppliers and construction companies; suppliers will only have to fill out one questionnaire, which can be accessed by all construction companies. This initiative is being piloted by thirteen companies, with the intention of being rolled out across the property industry.

It’s been my experience working with product manufacturers and retailers that many construction companies have already started assessing for risks and putting in place strategies to mitigate their risk.

Ms Rooney’s parting words are, “Don’t wait for the legislation, start talking to your suppliers because this is the way of the future. Investors want it. Customers want it. Join the long race to the top.”[3]

Green Building Council of Australia (GBCA)

I attended a Modern Slavery Act Readiness Seminar, hosted by the GBCA, in April 2018. It is clear that the building and construction industry, along with GBCA, are eager to support the new Commonwealth Modern Slavery legislation.

This year the GBCA launched their Future Focus Consultation Paper, which includes new categories that will “drive relevant and material outcomes for the built environment over the next decade”.

GBCA intend to include human rights and modern slavery impacts in the Sustainable Procurement credit of their new Green Star for New Buildings rating tool. The desired outcome of this credit to ensure “a robust procurement process in line with ISO 20400 to assess suppliers and products. The procurement process must address issues related to human rights, such as modern slavery, and environmental issues”.[4]

The GBCA has sought industry feedback on the Future Focus Consultation Paper. While we are yet to see the outcome of the categories and credits, the intent is there to address human rights and modern slavery risks. Watch this space!

How will the Modern Slavery Act affect the way the Government procures?

The Commonwealth Government is also required to report under the Commonwealth Modern Slavery Act 2018. So be prepared, if your organisation is providing goods and services to government departments, you may need to start the process of assessing and addressing modern slavery risks in your business operations and supply chains.

On the state level, I have assisted a number of clients with NSW Government Request for Tender contracts, and the tenders have very specific requirements around “full transparency and traceability of supply chains for environmental, labour and human rights – leading to zero incidents”.[5]

The NSW Modern Slavery Act 2018 was due to be in force mid-2019, however it is now with a parliamentary committee, pending recommendations that are due in February 2020 so the full extent of this legislation will become clear in the coming months.

What is expected of suppliers - what do you need to know

Most companies that are reporting under the Commonwealth Modern Slavery Act 2018 are in the process of raising awareness within their supply chains about human rights and modern slavery due diligence. Companies are asking their suppliers, via questionnaires or online platforms, whether they have policies and procedures in place that support ethical and responsible procurement and whether they are assessing for modern slavery risks in their supply chains.

Other companies are taking the extra step and including modern slavery clauses in their terms and conditions, or they have a modern slavery charter for their suppliers and service providers. This includes the expectation that their suppliers will comply with the Commonwealth Modern Slavery Act 2018.

The companies that you supply need your help because your products form part of their supply chain. They need you to conduct modern slavery due diligence on your business operations and your supply chains. Reporting companies will want to partner with companies that are assessing and addressing modern slavery risks.

It has been noted within the building and construction sector that at some point we will start to see discrimination against product manufacturers and retailers who are not assessing and addressing modern slavery risks in their business operations and supply chains.

So how can you help your clients assess and address modern slavery?

• The First step involves your company making a commitment to address modern slavery. This needs to come from the TOP. You need the support of the senior management team to ensure this process is addressed properly.

• The second step is to map your supply chain, both in terms of your business operations and your suppliers. This includes all goods and services.

• Then you need to conduct a high-level risk assessment of your procured products and services to understand where the greatest risks of modern slavery lie in your supply chains, including beyond tier 1 suppliers.

• Once you understand where risks may lie, you can conduct a more detailed risk assessment of individual suppliers by asking specific questions about labour practices, including forced labour and child labour.

• You will then need to establish processes to mitigate risk, this could involve looking at how your company may contribute to instances of modern slavery through aggressive price negotiation or unrealistic timelines.

• The final step involves developing a remediation plan to remedy harm when instances of modern slavery are identified.

I’m working with some clients who really understand that there is a moral imperative to tackle modern slavery and are they doing great work in this area. I’m also working with businesses who choose to report voluntarily and we’re expecting to see commercial benefits – their customers will want to partner with companies that are conducting modern slavery due diligence.

So how can we help?

Addressing modern slavery impacts and broader human rights issues can be challenging and complex, but we’re here to help.

We can help you:

• Educate your team on what modern slavery is

• Assist with supply chain mapping

• Conduct a risk assessment to identify high-risk suppliers

• Mentor and support staff with the modern slavery due diligence process

• Document policies, procedures and action plans that address human rights and modern slavery

• Develop and implement remediation measures when modern slavery is found

• Help you write your modern slavery statement

We also provide tools, guides and templates that you can use with your suppliers in the due diligence process – you don’t have to start from scratch!

Contact us now for a FREE CONSULTATION to see how we can work together to combat modern slavery.

You can also download the Preparing for Modern Slavery Legislation Guide from the Sustainable Business Matters Website, which gives further guidance and resources to help you get started.

Endnotes

[1] “Property Industry Supports Combatting Modern Slavery”, Property Council of Australia, 28 June 2018,

[2] “Modern Slavery and the Long Race to the Top”, Property Council of Australia, 1 August 2018,

[3] “Modern Slavery and the Long Race to the Top”, Property Council of Australia, 1 August 2018,

[4] “Green Star for New Buildings: A Future Focus consultation paper”, p38, Green Building Council of Australia,

[5] Modern Slavery Act: What businesses in Australia need to know, Norton Rose Fulbright,

Australian Architects declare climate & biodiversity emergency

Introduction

Many of us working in the building and construction sector are well aware of the facts – globally, the building and construction industry accounts for almost 40% of the world’s Co2 emissions, and this has long-lasting effects on biodiversity and our natural habitat.[i]

Australia is the third country to join the global movement initiated in the United Kingdom on 30 May 2019, where architects are taking a stand for urgent action to address climate change. The Australian chapter of Architects Declare is run by a volunteer group of seven architects and built environment professionals – Andre Bonnice, Ranald Boydell, Verity Campbell, Antony DiMase, Caroline Pidcock, Andrew Shurman and Steffen Welsch.

So, what is this global movement, and what are architects signing up for?

The Architects Declare movement seeks to address climate and biodiversity issues by affecting change in design and building construction practices. Inspired by their British counterparts, local architects have created an Australian version of the initiative, which invites like-minded industry professionals to publicly commit to more sustainable design and construction practices and waste reduction measures.

Central to this vision is an intention for architects to work collaboratively with their clients, engineers and contractors to shift mindsets and improve working practices across the industry. Its hoped that making a visible commitment to climate change mitigation will create a groundswell which will influence policymakers.

Included below are excerpts taken from the online declaration made by Architects Declare Australia: – full details are available at https://au.architectsdeclare.com/

“For everyone working in the construction industry, meeting the needs of our society without breaching the earth’s ecological boundaries will demand a paradigm shift in our behaviour. Together with our clients, we will need to commission and design buildings, cities and infrastructures as indivisible components of a larger, constantly regenerating and self-sustaining system.”

Registered architectural firms who become signatories will seek to:

• ·Raise awareness of the climate and biodiversity emergencies and the urgent need for action amongst our clients and supply chains.

• Advocate for faster change in our industry towards regenerative design practices and a higher Governmental funding priority to support this.

• Establish climate and biodiversity mitigation principles as the key measure of our industry’s success: demonstrated through awards, prizes and listings.

• Share knowledge and research to that end on an open source basis.

• Evaluate all new projects against the aspiration to contribute positively to mitigating climate breakdown and encourage our clients to adopt this approach.

• Upgrade existing buildings for extended use as a more carbon efficient alternative to demolition and new build whenever there is a viable choice.

• Include life cycle costing, whole life carbon modelling and post occupancy evaluation as part of our basic scope of work, to reduce both embodied and operational resource use.

• Adopt more regenerative design principles in our studios, with the aim of designing architecture and urbanism that goes beyond the standard of net zero carbon in use.

• Collaborate with engineers, contractors and clients to further reduce construction waste.

• Accelerate the shift to low embodied carbon materials in all our work.

• Minimise wasteful use of resources in architecture and urban planning, both in quantum and in detail.”

In their commitment to developing sustainable and integrated approaches to the built environment, Architects Declare Australia also acknowledges there may be a lot we can learn from indigenous perspectives on our relationship with the environment. “In Australia, we as architects are aware that Aboriginal and Torres Strait Islander peoples have long espoused the cultural, social, economic and environmental benefits embedded in the holistic relationship of Caring for Country.”

Is Architects Declare the key to meaningful change in the building and construction industry?

ABC Radio National’s Blueprint for Living host, Jonathon Green, lead a very informative discussion on this subject. His interview featured Caroline Pidcock, an architect and spokesperson for Architects Declare Australia, and Elizabeth Farrelly, author, architecture critic, columnist with the Sydney Morning Herald, and former Sydney City councillor.

I encourage you to listen to the full podcast – it’s only 14 minutes long and provides a robust discussion between two professionals who care equally about climate change and the environment but come at this from very different perspectives.  

Here are a few key points from the conversation:

Elizabeth Farrelly applauds the initiative but is sceptical about what architects can really change, “architects are not terribly powerful in the industry, as everyone well knows,” and she sees architects as, “the servants of developers or rich people wanting big houses – not two groups [most] sympathetic to the environmental movement…”.

The truth is that architects have been reluctant, which frustrates Elizabeth, “they don’t want to speak out, to hurt the feelings of the person paying the bill.”

Elizabeth wants to see architects stand up to their clients and stand up for their principles. 

Caroline states, “we must inspire others not to be overwhelmed by the bad and get them inspired and empowered by the good things. There are good things happening, but they just don’t get the attention of the bigger projects.”

Elizabeth’s point is that, “sadly the big things will make the big difference, and we need to do big things properly”.

There are 16,500 registered architects in Australia, so what is the critical mass needed to push policymakers to make change happen?

According to Caroline, “the theory is that to create a movement you need about 4-5% of any group – if you can change them, you can get the movement going.”

They are aiming to get 1,000 architects engaged.  “We need government regulation to make this happen, but we need groundswell to make this happen [first].”

I have to agree with what Elizabeth was implying; we really need to have the building and construction industry engaged, and the developers at the table – like the UK, which now has a Construction Declares initiative.

It’s been my experience consulting with product manufacturers over the last decade that, for the most part, the architectural and design firms have been somewhat ‘missing in action’. They have not been vocal when it comes to specifying sustainable products - unless of course if it’s for a Green Star project.

But this aside, like Elizabeth, I too applaud the Architects Declare initiative and can’t wait to see how this movement takes off!

WATCH THIS SPACE…

Founding signatories to Architects Declare Australia include:

ARM Architecture, Alec Tzannes, Bates Smart, Breathe Architecture, Brit Andresen, BVN, Circa Morris-Nunn, Clare Design, Design 5, dwp | design worldwide partnership, FJMT, TheFulcrum.Agency, Glenn Murcutt, Greenaway Architects, Gregory Burgess Architects, Hassell, Iredale Pedersen Hook, Jackson Clements Burrows (JCB), John Wardle Architects, Ken Maher, Kerstin Thompson Architects, Koning Eizenberg Architecture, Inc., Liminal Studio, Partners Hill, Peter Stutchbury, Rick Leplastrier, Six Degrees, Taylor and Hinds Architects, TKD Architects, Troppo, and Woods Bagot.

Website links to additional information on Architects Declare Australia

Architects Declare Australia – including full list of signatories

A very interesting article from Architectureau – “Australian architects join global movement to declare climate emergency”

ABC Radio National, Blueprint for living, Hosted by Jonathon Green, “Architects declare a climate emergency”

FOOTNOTE

[i] Architects Declare Australia, “Australian Architects Declare Climate & Biodiversity Emergency”, https://au.architectsdeclare.com/

Building the business case to tackle modern slavery

Introduction

Increasingly, customer attitudes, market expectations and social values are prompting companies to address human rights and modern slavery risks in their business operations and supply chains. In today’s globalised economy, outsourcing products and services doesn’t mean outsourcing the responsibility of risk. Conducting modern slavery and human rights risk assessments is the key to maintaining the integrity of a brand.

Building the business case for tackling modern slavery

The first step in developing a modern slavery due diligence process is to understand WHY you are undertaking this program. There are several compelling reasons for taking action to improve human rights impacts throughout your business operations and supply chains.

The business case will vary depending on the industry sector, stakeholder expectations, your organisation’s social footprint, business strategy and company culture. Some businesses are driven by their company values and by creating an ethical business culture, some companies may address modern slavery because their clients are putting pressure on them to do so, and others may be motivated by a combination of these factors.

The business case can be both a moral imperative and a business reality.  

The benefits for business

Here are some of the reasons it makes good business sense to address modern slavery.

Moral imperative – Many companies are driven by their corporate values to respect human rights, which include modern slavery impacts. These values are incorporated into all aspects of the business, from the way they treat their staff to how they manage their supply chains. Having a business with strong values and purpose creates not only good business relationships and customer loyalty but also assists with staff retention. Employees want to work for an ethical organisation that plays no part in human rights abuses.

Clients’ expectations – There is growing awareness of the way businesses operate in terms of their human rights impacts.  For several years, businesses have been including human rights and modern slavery requirements in business tenders, prequalification processes, suppliers’ self-assessment questionnaires and suppliers’ codes of conduct.  Businesses want to partner with ethical organisations, and it’s likely that companies will seek out suppliers who are voluntarily reporting under the Commonwealth Modern Slavery Act. Similarly, companies may prefer to work with suppliers that produce an annual Modern Slavery Statement showing how they assess, address and evaluate their modern slavery risk. This may create market preferences for working with suppliers who are taking the initiative rather than those who are not taking measures.

Brand reputation – Reputational risk is one of a company’s biggest strategic risks, so it makes good sense to develop a due diligence process to identify, prevent and mitigate human rights and modern slavery impacts – not only in your company’s business operations but also through the products and services that you procure. Demonstrating a strong commitment to tackling modern slavery, as well as being honest and transparent about the risks associated with your business, can have a positive effect on your brand reputation. Whereas, if your company is doing little or nothing to address human rights and modern slavery risks, then it may work against you.  Higher-profile businesses run the risk of attracting adverse attention and being ‘named and shamed’ by the media and small or medium sized businesses risk competitors becoming aware of their lack of commitment and using this to discredit them.

Industry requirements – The building and construction industry has begun to address modern slavery and human rights impacts through tender and prequalification processes, as well as suppliers’ self-assessment questionnaires. The Green Building Council of Australia (GBCA) and WELL (International WELL Building Institute) are considering introducing sustainable procurement (which includes modern slavery, human rights and environmental impacts) and social responsibility in the updated versions of their rating tools.

Global regulations relating to human rights and supply chains – Globally, many countries and states are setting regulations for businesses to address human rights. Countries doing this include the United Kingdom, Australia, France, Germany and California, and, according to the World Business Council of Sustainable Development (WBCSD), more legislation is expected to follow, with 33 countries having, or in the process of developing, National Action Plans on Business and Human Rights.[i]

Local Legislation requirements – With the introduction of the Commonwealth Modern Slavery Act (2018) and the NSW Modern Slavery Act (2018), many businesses will be required to produce an annual Modern Slavery Statement to outline what their organisation/entity is doing to assess and address modern slavery risks in their business operations and their supply chains.  Combined, this legislation is estimated to affect over 5000 organisations and indirectly affect many more.

Government procurement – If your business is supplying goods and services to the NSW or Commonwealth governments, then you will need to start assessing and addressing modern slavery risks in your business operations and supply chains.  The NSW Modern Slavery Act mandates that government agencies must take reasonable steps to ensure that goods and services procured by and for the agency are not the product of modern slavery.

Shared Value – The most successful and sustainable businesses are creating shared value for all stakeholders, suppliers, customers and employees.

[i] World Business Council of Sustainable Development, Nov 2918, https://humanrights.wbcsd.org/wp-content/uploads/2017/11/WBCSD-Business-Human-Rights-analysis_Nov-2018.pdf

Need help?

Addressing modern slavery impacts and broader human rights issues can be challenging and complex but we’re here to help.

We can help you:

-        Educate your team on what modern slavery is

-        Conduct a risk assessment to assist in identifying high-risk suppliers

-        Mentor and support staff with the modern slavery due diligence process

-        Document policies, procedures and action plans that address human rights and modern slavery

-        Develop and implement remediation measures when modern slavery is found

We also provide tools, guides and templates that you can use directly with your suppliers in the due diligence process – you don’t have to start from scratch!

Contact us now for a FREE CONSULTATION to see how we can work together to combat modern slavery.

Update on the NSW Modern Slavery Act 2018

I had the great pleasure of attending a business roundtable on 28 May to discuss key requirements of the NSW Modern Slavery Act. A key focus of the meeting was the NSW Government’s readiness to work with the business community to address the risks of modern slavery. 

The esteemed panel of speakers included:

-        Professor Jennifer Byrne - NSW Interim Anti-Slavery Commissioner, NSW Government

-        Paul Green - Former politician representing the Christian Democratic Party from 2011-2019

(Paul Green and the Christian Democratic Party introduced Australia's first anti-modern slavery bill to the New South Wales Parliament in 2018)

-        Kimberly Randle - Executive Director and Lawyer, FairSupply

-        Jeff Nagle - Co-Founder, FairSupply  

A Recap

The NSW Modern Slavery legislation applies to organisations with employees in NSW and an annual turnover of between AUD$50 million and AUD$100 million. Profession Byrne estimates that this will affect around 1600 organisations.

The NSW Modern Slavery Act 2018 asks companies to identify the risk of modern slavery occurring in their business operations and supply chains and to outline the steps they are taking to assess and address modern slavery risks.

Modern slavery is a process in which victims are objectified and stripped of their humanity and their control over their life. Modern slavery is defined as:

-        Slavery

-        Servitude

-        Debt bondage

-        Forced labour

-        Child forced labour

-        Deceptive recruiting

-        Forced marriage

-        Human, child and organ trafficking

Both the Commonwealth and the NSW Acts bring attention to companies’ supply chains because this is where the greatest risk of modern slavery lies. As Professor Byrne stated, modern Slavery is a deeply human, deeply global and deeply economic issue that will change the business landscape.

Update on NSW Modern Slavery legislation

Professor Jennifer Byrne shared her thoughts and insights on what the NSW Government wants to see achieved through the implementation of the NSW Modern Slavery legislation. She highlighted that:

-        Australian businesses have an opportunity to make a difference by the way they respond to cases of modern slavery, particularly in their supply chains.

-        The NSW Government’s preferred approach is to be consistent and complementary with the Commonwealth Modern Slavery Act, and the NSW Government will adopt the Commonwealth’s 7 reporting criteria.

-        There has been strong consultation between the Commonwealth and NSW Governments to ensure a streamlined approach.

-        Like the Commonwealth’s approach, the NSW Modern Slavery legislation is based on the UN Guiding Principles on Business and Human Rights and it implements the United Nations’ Protect, Respect and Remedy framework.

-        Reporting entities that generate an annual turnover between AUD$50 million and AUD$100 million can elect to report under the Commonwealth Modern Slavery Act 2018 rather than the NSW Modern Slavery Act 2018.

-        Reporting criteria will be subscribed in the regulations, as will be the detail of the Supply Chain Reporting Scheme.

-        The NSW Modern Slavery Statement will need to be submitted 6 months after the company’s end of financial year.

-        The NSW Act prioritises the wellbeing of the victims of modern slavery in NSW and a Modern Slavery Hotline will be set up to assist victims.

Professor Byrne also made the following very important point - the government wants to learn from business and collaborate to ensure there is meaningful change in addressing modern slavery risks.

The NSW Government website states:

“Everyone is responsible for operating at the highest ethical standards and the Act is an opportunity for shared learning with the business community in the fight against modern slavery. Collaboration strengthens our stance against modern slavery.

“As one of the largest procurers of goods and services in Australia, the NSW Government’s actions can make a difference around the world.”

NSW Government Procurement

The NSW Government has the purchasing power of over 35 billion dollars and is one of the largest procurers of goods and services in Australia.  Because of this, the government has significant influence and it is aware that the many businesses that supply it with goods and services will be impacted by the legislation’s requirement to report on and address modern slavery risks. 

The NSW Modern Slavery Act mandates that government agencies must take reasonable steps to ensure that goods and services procured by and for the agency are not the product of modern slavery.

The NSW Government is aware of how this will impact its suppliers and it is connecting with suppliers to better educate and inform them.  Companies that are supplying goods and services to NSW government agencies should take heed and consider how they will assess and address the risks of modern slavery in their operations and supply chains.

Conclusion

Both the Commonwealth and the NSW governments have made it very clear that this legislation is seeking to change the operating ethos of companies so that awareness of modern slavery becomes part of a company’s DNA.

Professor Byrne indicated that the NSW Government is keen to engage and collaborate with reporting entities and is interested in fresh ideas and platforms to promote awareness of this very important issue and new legislation.

Ultimately, it’s clear that there are opportunities for business leaders to lend their influence to address modern slavery and improve the dignity and human rights of workers.  

So, get in touch or sign up for updates from the NSW Government.

Need help?

Addressing modern slavery impacts and broader human rights issues can be challenging and complex but we’re here to help.

We can help you:

-        Educate your team on what modern slavery is

-        Conduct a risk assessment to assist in identifying high-risk suppliers

-        Mentor and support staff with the modern slavery due diligence process

-        Document policies, procedures and action plans that address human rights and modern slavery

-        Develop and implement remediation measures when modern slavery is found

We also provide tools, guides and templates that you can use directly with your suppliers in the due diligence process – you don’t have to start from scratch!

Contact us now for a FREE CONSULTATION to see how we can work together to combat modern slavery.

Innovate Rights - New Thinking on Business and Human Rights: 15th & 16th May 19

Introduction

Academia, government, civil society (NGOs) and business came together at the Innovate Rights: New Thinking on Business and Human Rights seminar to discuss the advancement of human rights in business.

The seminar was hosted by the Australian Human Rights Institute and director, Louis Chappell, reminded us that it had been 6 years since the Rana Plaza building collapse in Bangladesh, where 1134 people were killed, and hundreds injured.  

This disaster was a turning point for business and human rights because it brought the issue of human rights in supply chains into our homes. In the aftermath of that event, there was incredible scrutiny on the retailers who were sourcing products from this factory and, for the first time, mainstream consumers were aware of human and labour rights issues and wanted to know which retailers were involved.

Unfortunately, it took this tragic incident for the world to wake up – and, regrettably, it appears there has been little progress in addressing workers’ rights since.

Shared insights

Addressing and advancing human rights impacts needs to be driven by business, government and civil society.

Current modern slavery laws, both in Australia and in other jurisdictions (i.e. UK, California and the Netherlands), reflect social attitudes and the changes we want to see. 

Whilst there is social support for tackling modern slavery, there is general consensus that addressing human and labour rights in supply chains is incredibly challenging, particularly where there is failure from states to protect and respect workers’ rights. Businesses have a huge role to play and have incredible potential to influence worker empowerment in their supply chains. In an article in the Human Rights Defender magazine titled Business and Human Rights, Current and Future Challenges, only 29 of the 100 highest earning entities in 2017 were countries, the rest were corporations. This speaks to the power that business has to influence social, economic and political realities.

Business responsibility

Today there are more ‘slaves’ than in another other time in history and a lot of the victims of modern slavery are found in business supply chains.

Whilst this is alarming, there are opportunities here for businesses to choose to be part of a virtuous circle rather than a vicious circle; to be a force for good, not evil.

It’s not only consumers that want to see business addressing human rights but also employees. Companies are populated by humans that want no part in human rights abuses. This is something they want to see changed – particularly the millennials.

So what do we want to see from business leaders

An esteemed panel of experts, which included Sam Mostyn (sustainability adviser), Justine Nolan (UNSW Sydney), Amol Mehra (The Freedom Fund), David Cooke (Konica Minolta) and Auret van Heerden (fair labour advisor) shared their insights in a session titled A Blueprint for Business Leadership on Human Rights.

It was evident from all members of the panel that the majority of business leaders are uninformed and/or fearful of the exposure of being linked to modern slavery impacts.

It was suggested that a number of senior leaders and CEOs would like to step-up and address human rights, but they’re terrified.  Boards and senior management are not skilled in addressing this issue, so we need to raise awareness and see CEOs and boards getting comfortable with the conversation around human rights.

Respecting and protecting human rights will only work if respecting all human rights is part of a company’s business strategy. There must be a clear vision from the LEADER about what ‘doing good’ looks like.

When speaking about the recently enacted modern slavery legislation, the panel observed that the corporate sector is resource rich and well positioned to implement shifts if they have the right intention. But a degree of a compliance mentality exists, which means that some will just do the minimum to avoid penalties. 

It was also noted that business is not good with self-regulation, as we saw the biggest changes to workplace safety happen only when penalties where applied to CEOs for safety incidents.  So, it will be interesting to see how the current NSW and Commonwealth Modern Slavery legislation will affect business and how they will address not only modern slavery risks but human rights impacts. It’s clear that nobody wants to see business approach this as a ‘tick and flick’ exercise because if that’s the case, its unlikely real change will happen.

We need to see leaders authentically communicate their PURPOSE, which will help attract the right people into their organisation, create better shareholder outcomes, and lower the risk to the business of not doing the right thing.

We need courageous and visionary leaders who regard human rights, social justice and concerns for others as an enormous benefit to business. By looking after others, particularly the vulnerable, the more you put out, the more you get back. It’s not only the right thing to do, but it’s actually the only thing to do.

Larry Fink, the CEO of BlackRock, the world’s largest investor with $US 6 trillion under management understands the link between purpose and profit and has stated:

Business leaders must finally, once and for all, let go of the outdated and erroneous notion that social factors — and not just diversity — are irrelevant to the economic success of our companies... Committing to a purpose and having a positive social impact is increasingly central to good management and shareholder value.

How can we all work towards worker empowerment and the end of modern slavery

1. COLLABORATION - This is the key! Collaborate with industry peers and key stakeholders to address modern slavery and human rights risks. NGOs, industry bodies and associations can all play a role in assisting organisations to collectively tackle the issue of modern slavery. There are lessons learned from the garment sector. For example, the Fair Wear Foundation, an independent, non-profit organisation, works with a 130 brands and industry influencers to improve the working conditions of workers in garment factors.

2. PROCUREMENT PRACTICES - We also need to understand how our procurement and purchasing practices affect our suppliers. For instance, we need to stop aggressive price negotiation and unrealistic lead times. Business should also consider the importance of social compliance as part of the criteria for selecting new suppliers and not just focus on quality and price. The cost of the product should not be on the only factor in procurement.

3. CAPACITY BUILDING - The Australian Government has outlined in its Draft Guidance for Reporting Entities document the importance of building meaningful partnership with suppliers. One way of doing this is to build the supplier’s capacity to address human rights through awareness-raising, training, coaching and the development of skills to address modern slavery risks in their company and their supply chains.

These a just a few ways we can create change, and with expertise and a desire for real change we can all make a difference.

Conclusion

We need business leaders to understand WHY it’s important to their business and their stakeholders to address human rights. We need them to find the courage to take risks and to say that they don’t have all the answers but are willing to make a start.  Both employees and consumers want to see action from business to address human rights; they want to see businesses that are transparent, engaged, honest and have integrity.

It was recognised in the panel’s parting comments, that over the two days of the conference there had been very little said about the role of small to medium sized businesses (SMEs) in relation to addressing human rights impacts. It was acknowledged that SMEs needs to be part of the conversation, as they play a major role in supplying goods and services to businesses and government who are required to report under the modern slavery legislation. 

The next question then is how to engage with SMEs, how to make it relevant and bring them along?

My Business have published an article – SME’s not immune from the Modern Slavery Act

Key Takeaways

• Human rights need to be demystified – it is about simple human dignity, inclusion and diversity.

• Be clear on your goal – work towards having a value chain that goes for worker empowerment, not worker exploitation.

• Modern slavery dialogue is important – it is just one piece, but not the only piece and there needs to be a broader discussion around human and labour rights.

• Understand the root causes of human rights in your supply chains and how to address them – see what works and what doesn’t work, go for progress, not perfection.

• Get proactive – examine your own procurement practices.

• Tackling modern slavery and human rights takes COURAGE, CURIOSITY AND COMMITMENT.

Getting Guidance on the Commonwealth Modern Slavery Act 2018

Getting Guidance on the Commonwealth Modern Slavery Act – a seminar hosted by STOP THE TRAFFIK

Introduction

STOP THE TRAFFIK presented a terrific webinar on 9 April hosted by two very informative and passionate professionals, Paul Redmond from UTS and Rebecca Mills from the Australian Government Department of Home Affairs. These two strong advocates for eliminating modern slavery shared the latest news and insights into the Commonwealth Modern Slavery Act and the release of the Government’s new Draft Guidance for Reporting Entities document.

Background

The Commonwealth Modern Slavery Act 2018 requires entities (including foreign entities) conducting business in Australia with annual consolidated revenue of over $AUD 100 million to produce an annual modern slavery statement. The statement requires businesses to outline the actions they’ve taken to assess and address modern slavery risks in their operations and supply chains.

To ensure a high-level commitment, the statement must be approved by the board of directors, or equivalent, and signed by a director. It will also be made publicly available through an online central register.

The Act sets out seven mandatory criteria which require every statement to:

1.       Identify the reporting entity

2.       Describe the reporting entity’s structure, operations and supply chains

3.       Describe the risks of modern slavery practices in the operations and supply chains of the reporting entity and any entities it owns or controls

4.       Describe the actions taken by the reporting entity, and any entities it owns or controls, to assess and address these risks, including due diligence and remediation processes

5.       Describe how the reporting entity assesses the effectiveness of these actions

6.       Describe the process of consultation with any entities the reporting entity owns or controls (a joint statement must also describe consultation with the entity giving the statement)

7.       Any other relevant information [1]

Modern Slavery Act 2018 Draft Guidance for Reporting Entities

The Australian Government Department of Home Affairs has created a draft guidance document to assist businesses to comply with the Commonwealth Modern Slavery legislation. It’s a really well written guide which helps businesses understand their reporting responsibilities and how to submit a modern slavery statement.

The Modern Slavery Act 2018 Draft Guidance for Reporting Entities document uses the language of the UN Guiding Principles on Business and Human Rights and references the UN Principles when it states, “Under the UN Guiding Principles on Business and Human Rights your entity has a responsibility to respect human rights. This includes taking action to prevent and mitigate and where appropriate remedy modern slavery in your entity’s operations and supply chains. Investors, business peers, civil society and governments expect you to understand and meet this responsibility”.[2]

The draft guide will assist entities that are required to report, and it also explains how companies who recognise the business case for opting in early can voluntarily submit a Modern Slavery statement. Each chapter will help you understand the reporting requirements and the appendices include valuable background information, recommendations and resources.

Key features of the guidance document include:

-        a detailed section on how to report

-        how to work with your suppliers

-        useful information on indicators of modern slavery

-        how to respond to cases of modern slavery

-        how to work with the Government’s Modern Slavery Business Engagement Unit

-        tips on writing a modern slavery statement

The draft guide is an excellent resource because it’s written in plain english and provides plenty of case studies.

Modern Slavery Business Engagement Unit

In addition to providing a guidance document to help businesses, the Department of Home Affairs has set up a Modern Slavery Business Engagement Unit which is responsible for implementing the Act and providing general advice and support to entities about compliance with the reporting requirements.

The Business Engagement Unit has 5 key functions:

-        To provide advice and support to entities about compliance and reporting requirements

-        Undertake awareness-raising and training about modern slavery and reporting requirements

-        Promote best-practice and monitor compliance

-        Administer the online central register for statements

-        Coordinate the Commonwealth Modern Slavery Statement[3]

Additional support and advice is available for business by contacting the Modern Slavery Business Engagement Unit – email: slavery.consultatons@homeaffairs.gov.au

When do you need to report?

-        First reporting period commences – 1 July 2019

-        First reporting period ends – 30 June 2020

-        First modern slavery statement due – 31 December 2020

Key messages for businesses to consider

-        Understand the business case for compliance and communicate this through all levels of your business

-        Ensure your human rights due diligence processes extend through all divisions of your business operations (HR, procurement, legal and financial –investments and lending)

-        Take a risk-based approach to identify high-risk suppliers and determine the leverage you have to influence anti-modern slavery practices in your supply chains

-        Look for opportunities to partner and collaborate with NGOs and industry peers

-        Demonstrate improvement overtime and know that its ok to start at the beginning and develop a plan

-        Commit to continual improvement and understand that different businesses will have different resources and capabilities

-        Don’t panic if you find modern slavery because what matters is how you respond to it and how this is reported – being transparent is far better than providing empty aspirational statements

-        Demonstrate leadership in your industry by proactively tackling modern slavery

Need help?

Addressing modern slavery impacts and broader human rights issues can be challenging and complex but we’re here to help.

We can help you:

·         Educate your team on what is modern slavery

·         Conduct a high-level risk assessment which maps your supply chain and identifies high-risk suppliers

·         Mentor and support staff with the modern slavery due diligence process

·         Document policies, procedures and action plans that address human rights and modern slavery

·         Develop and implement remediation measures when modern slavery is found

We also provide tools, guides and templates that you can use directly with your suppliers in the due diligence process – you don’t have to create these from scratch!

Contact us now for a FREE CONSULTATION to see how we can work together to combat modern slavery.

[1] Australian Government Department of Home Affairs, Modern Slavery Act 2018 Draft Guidance for Reporting Entities

[2] Australian Government Department of Home Affairs, Modern Slavery Act 2018 Draft Guidance for Reporting Entities, p9, section 12.1

[3] Australian Government Department of Home Affairs, Modern Slavery Act 2018 Draft Guidance for Reporting Entities, p57, section 193.1

Addressing modern slavery - NSW Government procurement

In 2018, we saw two key pieces of modern slavery legislation enacted in Australia, the Commonwealth Modern Slavery Act (2018) and the NSW Modern Slavery Act (2018). These new laws reflect a growing awareness of the need to address modern slavery in business operations and supply chains.

Modern day slavery involves exploitation, threats, violence and coercion, and is perpetrated by those seeking profit and gain at someone else’s expense.  Modern slavery affects men, women and children, with women and girls accounting for 71% of modern slavery victims.

Slavery is illegal almost everywhere, yet it occurs in factories, mines, fields, fisheries, and in the provision of general goods and services.  Two thirds of victims of modern slavery are living in the Asia-Pacific region, where there are strong links to Australian business supply chains.

Changes in NSW Government procurement

The NSW Modern Slavery Act (section 25, Part 3) provides powers for the NSW Procurement Board to monitor the effectiveness of due diligence procedures to ensure that the procurement of goods and services by government agencies is not the product of modern slavery.

In addition, there will be an electronic public register kept by the NSW Anti-Slavery Commissioner, which will not only identify commercial organisations that have not disclosed a modern slavery statement but also government agencies that are failing to comply with the directions of the Procurement Board, in relation to modern slavery.

NSW Government tender requirements

The NSW Government’s new tender requirements not only address modern slavery, but they also consider the broader sustainability impacts of environmental and human and labour rights issues in product manufacturing.

Government is starting to ask intelligent and meaningful questions about how companies approach and address sustainability in their business operations and supply chains and this is reflected in the introduction of supply chain and modern slavery sections in government tender documents. 

Over the last few months, I have helped a number of clients implement policies and processes that have assisted them to meet the NSW Government Request for Tender requirements.

Tenderers were asked to demonstrate their approach to the following sustainability elements;

-        Full transparency and traceability of supply chains

-        Reduced carbon emissions in the transportation of products

-        Zero safety incidents with product users

-        Reliable product sustainability labels

-        Minimising non-recyclable waste in the supply chain and packaging

-        Strategies to manage workers health and safety in line with relevant legislation and NSW Government guidelines

Bringing awareness to modern slavery

The modern slavery section of the NSW Government’s Request for Tender document refers to the NSW Modern Slavery Act (2018) and defines modern slavery as exploitative practices, including slavery, servitude, human trafficking, forced labour and debt bondage.

The tender questions focus on how suppliers approach auditing and assurance, supplier engagement and risk management, and how they identify the likelihood of modern slavery in their supply chains. The NSW Government is also asking tenderers to demonstrate willingness to work with the government to implement and improve risks relating to modern slavery in their supply chains.

Whilst the modern slavery responses are not scored as part of the evaluation process, suppliers are encouraged to provide transparent, complete and candid responses.

This is a great approach by the NSW Government as they too understand how complex and challenging tackling modern slavery is.

Conclusion and next steps

The NSW Modern Slavery legislation requires NSW Government agencies to take reasonable steps to ensure goods and services procured by and for them are not the product of modern slavery. Commonwealth entities will also be required to publish modern slavery statements under the Commonwealth Modern Slavery Act (2018).

With the might of their purchasing power, government and industry have huge influence to bring about change in human and labour rights issues, as well as transparency and traceability of supply chains.

Although, at this stage, the tender process does not actually score entities’ responses in the modern slavery section, it does require tender applicants to address these questions.

The approach the NSW Government is taking is constructively encouraging entities to address modern slavery rather than punishing them and in turn discouraging transparency. This seems to strike a balance with incentivising businesses to take action and understanding that eradicating modern slavery is an ongoing, complex process.

The clients I’ve supported through the tender process have been keen to develop knowledge, capability and processes to work with their suppliers and they not only see the business case for addressing modern slavery, they also understand it’s the right thing to do.

So, if you already – or intend to – supply goods and services to either the NSW or Commonwealth Government, and you need help with modern slavery compliance or sustainable supply chain due diligence, then please get in touch.

ST BAKHITA’S DAY – ETHICAL SOURCING SEMINAR

I attended a modern slavery event on Friday 8 February, hosted by the Catholic Archdiocese of Sydney. The esteemed panel of speakers included:

-        Ms Jennifer Westacott – Chief Executive, Business Council of Australia

-        Mr Moe Turaga – Survivor of slavery in Australia and anti-slavery advocate

-        Hon Alex Hawke, MP – Commonwealth Special Minister of State

-        Hon Tanya Plibersek, MP – Deputy Leader Federal Parliamentary Labour

-        Mr Mans Carlsson-Sweeny – Head of ESG Research, Ausbil Investment Management Pty Ltd

-        Ms Jo-anne Schofield – National Secretary, United Voice 

-        Mr Jeffrey Westbrook – Head of Procurement, St Vincent’s Health Australia

-        Mr Shehan Michael – Procurement Manager, Sydney Catholic Schools

-        Ms Sonja Duncan – Director, SD Strategies Sustainability Expert

These guest speakers represent a cross-section of society including the Liberal Party, Labour Party, Catholic Archdiocese, business and trade unions.

One commonality across the panel was the passion and focus of the speakers on the end game of eradicating modern slavery in one generation. I am excited to share their perspectives, wisdom and insights with you.

BACKGROUND

According to the Walk Free Foundation, there are approximately 40 million victims of modern slavery, globally. And, although modern slavery is a crime in Australia, right now there are around 15,000 people enslaved in this country. Australia is the second jurisdiction in the world to bring in modern slavery legislation, the first being the United Kingdom.

Two thirds of victims of modern slavery are living in the Asia-Pacific region so it’s no wonder that other countries in our region are looking at our Modern Slavery Act – most notably New Zealand, who will soon be following.

Modern day slavery involves exploitation, threats, violence and coercion, and is perpetrated by those seeking profit and gain at someone else’s expense. Slavery is illegal almost everywhere, yet it occurs in factories, mines, fields, fisheries, and in the provision of general goods and services.  It’s in the clothes we wear and the food we eat.

Today, modern slavery is an economic issue.

WHAT IS BUSINESS AND CIVIL SOCIETY DOING TO ADDRESS MODERN SLAVERY?

The Catholic Archdiocese has played a major role in campaigning government to enact legislation relating to modern slavery. Other organisations, NGOs and individuals who have also been influential include Jennifer Westacott, the Chief Executive of the Business Council of Australia.  Ms Westacott has had enormous influence pushing for modern slavery legislation and has brought business and government with her.

The Catholic Archdiocese is playing a leading role within the community and is focused on eradicating modern slavery in its aged care facilities, hospitals, schools and universities. It is reviewing its contractual and business practices to ensure its supply chains are free of modern slavery.

Understanding modern slavery risks can be tricky and complex but the best way to start is by understanding your supply chain and by conducting a supply chain risk assessment of your products and services.  It’s not only about understanding your tier one suppliers, but all suppliers within the supply chain.

Companies like Kmart and Target (part of Wesfarmers) have partnerships with the Better Work Program (BWP). The BWP is a partnership between the International Labour Organization (ILO) and the International Finance Corporation and it brings together government, global brands, factory owners, unions and workers to improve working conditions in the garment industry.

Woolworths conducts annual risk assessments of its suppliers and has unannounced factory site inspections. It addresses risk and reports every twelve months.

Both sides of government – Liberal and Labour – have a strong commitment to tackling modern slavery. As Tanya Plibersek says, “no one thinks job well done, we can relax”. The Labour Government thinks there should be penalties for failing to report or for breaching the Australian Modern Slavery Act but as it currently stands, the Act has no penalties for non-compliance. The NSW Modern Slavery Act (2018) differs here however because it does include penalties for non-compliance.

MODERN SLAVERY IN AUSTRALIA

One of the panel members, Mr Moe Turaga, shared his shocking story of being lured into modern slavery in Australia.

Moe is originally from Fiji. His cousin, a Fijian elder, said he could come to Australia and work and study and earn enough money to send home to his mum.

Once Moe arrived in Australia, his cousin took his passport, gave it to a migration agent and told him there was a debt that had to be paid for his travel and visa cost.

For over three years, Moe worked from dusk to dawn seven days a week, doing hard work picking grapes and watermelons.  Moe and his fellow workers lived in appalling conditions and had very little contact with the outside world. It was two years before he had an opportunity to speak with his mum and that’s when Moe found out that no money from his work had been sent home.  He was devastated!

Fortunately, Moe met a kind neighbouring farmer named Audrey at the local church who offered him and his co-workers jobs, got their passports back and changed their lives.

Moe is now a modern slavery advocate living in Queensland, but he offers a final comment saying, “many survivors have a real sense of shame”.

KEY TAKEAWAYS

Here’s a snapshot of the many insights and interesting information shared during the seminar:

-        If a business model is based on modern slavery, it won’t be sustainable

-        Modern slavery, although likely to present in developing nations, can also occur in developed nations like Australia, the UK and Europe, especially where there is an influx of migrants

-        The Australian Modern Slavery Act requires investment companies to report on modern slavery in their portfolios, unlike the UK modern slavery legislation, which does not specify ‘investors’

-        Labour exploitation comes down to two key issues: lack of a living wage and lack of trade unions

-        Child labour exists because parents are not paid enough

-        The draft guidance document on the Commonwealth Modern Slavery Act (2018) will be released very soon

HOW TO GET STARTED – INSIGHTS FROM THE PANEL ON ADDRESSING MODERN SLAVERY

-        Partnership is the new leadership – collaborate!

-        Review current procurement practices and risk management

-        Integrate modern slavery awareness into existing processes

-        Conduct a human rights risk assessment – use platforms such as the Global Slavery Index and Transparency International to help identify modern slavery hot spots

-        Consolidate your suppliers – give them a reason to improve their human and labour rights practices, give them more business

-        Establish robust grievance mechanisms

-        Align KPIs in the procurement team with your procurement policy – i.e. don’t have conflicting demands like price discounts and negotiations

-        Finally, and importantly, carefully consider your modern slavery statement:

§  Be realistic

§  Be honest

§  Be transparent

CONCLUSION

Modern slavery should be about upholding the human rights of individuals, not about ticking boxes. Large businesses are likely to unknowingly be complicit in modern slavery, but they have a huge opportunity to influence their supply chains with the might of their purchasing power. 

Here’s what we can ALL do to eradicate modern slavery:

-        Put ourselves in the shoes of someone who has no choice to go to work and who is working in unbearable and unsafe working conditions

-        Work on knowing what’s in your supply chains

-        Inspire a culture of discovery in supply chains

-        Be aware when we are purchasing from high risk areas, but don’t stop purchasing from these regions otherwise nothing will change

-        Work on building social capital in developing countries

-        Support ethical organisations and Fair Trade

Every life has value, purpose and dignity. Let’s get moving to eradicate modern slavery!

FURTHER READING AND RESOURCES

Slave to Fashion by Safia Minney, is an excellent book for someone who is wanting to learn about modern slavery, the UK modern slavery legislation and what fashion brands are doing to address modern slavery. The author provides excellent resources to assist in making more ethical purchasing decisions.

Walk Free Foundation

The Walk Free Foundation is an organisation working towards ending modern slavery. It is known for its publication of the Global Slavery Index. In 2013, the Walk Free Foundation became a founder of the Freedom Fund, an anti-slavery non-profit organisation.

Global Estimates of Modern Slavery: Forced Labour and Forced Marriage (Report)

Modern Slavery Legislation: A recap

In 2018, we saw two key pieces of modern slavery legislation enacted in Australia - the Australian Modern Slavery Act 2018 and the NSW Modern Slavery Act 2018.

Under the Australian Modern Slavery Act over 3000 companies will be required to publish modern slavery statements disclosing what they are doing to combat modern slavery in their business operations and their supply chains. Even more businesses will be affected under the NSW Modern Slavery Act because it has a lower reporting threshold.

Why we need modern slavery legislation

There is estimated to be 40.3 million people working in slavery, worldwide.  Modern slavery affects almost every sector, region and company.

The Walk Free Foundation proposes that just under two thirds of the estimated 40.3 million people in modern slavery are in the Asia-Pacific region. Many of the goods produced in the Asia-Pacific region are linked to the global supply chain of many businesses across the world, including Australia. 

Australian companies that procure goods from the Asia-Pacific region may unwittingly be complicit in modern slavery and human and labour rights abuses.

The Australian Modern Slavery Act 2018 requirements

The Australian Modern Slavery Act 2018 came into effect on 1 January 2019 and it requires entities operating in Australia, with more than AUD $100 million annual revenue, to produce an annual public statement describing the risks of modern slavery in their operations and supply chains.

Smaller entities that fall under the reporting threshold of AUD $100 million can opt-in and voluntarily report.

A modern slavery statement must include:

• The reporting entity’s structure, operations and supply chains

• A description of the risks of modern slavery practices in the operations and supply chains

• Actions taken by the reporting entity, and any entity that it owns or controls, to assess and address those risks, including due diligence and remediation processes

• Assessment of the effectiveness of such actions

To ensure a high-level commitment, the statement must be approved by the board of directors or equivalent and signed by a director.

Non-compliance to legislation

The Australian Modern Slavery Act does not impose financial penalties on non-complying entities, although the government will keep a publicly available online register of modern slavery statements and failures to comply may require explanation and remediation. This excerpt outlines the extent to which government can oversee compliance under the legislation:

The Minister may request an explanation about the entity’s failure to comply with a requirement in relation to modern slavery statements, and may also request that the entity undertake remedial action in relation to that requirement. If the entity fails to comply with the request, the Minister may publish information about the failure to comply on the register or elsewhere, including the identity of the entity.

Entities will understand the significant risk to reputation and to their brand for non-compliance, as entities will not want to be named-and-shamed by NGOs.

Who does the Legislation affect?

An Australian entity, or any entity which carries on business in Australia, with an annual turnover of AUD $100 million will be affected by this Commonwealth legislation. This includes partnerships, trusts, charities, companies and universities, regardless of whether they are incorporated. Corporate Commonwealth entities or Commonwealth companies which have consolidated revenue of a least $100 million for the reporting period will also be required to report.

Reporting

The first relevant period for reporting will relate to the financial year 2019. Therefore, modern slavery statements will be due between January to December 2020, depending on each company’s annual reporting period. This may differ slightly for entities with an international financial year – they may have to report earlier.

NSW Modern Slavery ACT 2018 requirements

Commercial organisations with an annual turnover of over AUD $50 million, and operating within NSW, are mandated to report annually on what they are doing to combat modern slavery within their business operations and their supply chains. 

Key points to the legislation:

-        Companies are required to prepare a modern slavery statement outlining the steps taken to ensure that the goods and services they procure are not a product or service of modern slavery – maximum penalty: 10,000 penalty units or AUD $1.1 million

-        Commercial organisations must make their modern slavery statement publically available in accordance with the regulation – maximum penalty: 10,000 penalty units or AUD $1.1 million

-        Organisations’ modern slavery statements are to include:

The organisation’s structure, business and supply chains

• Its due diligence process in relation to modern slavery in its business and supply chains

• The areas of its business and supply chains where there is a risk of modern slavery and steps taken to assess and manage risk

• Training of employees about modern slavery

-        A person must not provide information in connection with a matter that the person knows, or ought to reasonably know, is false or misleading – maximum penalty: 10,000 penalty units or AUD $1.1 million

For more information on the NSW Modern Slavery Act, visit the Sustainable Business Matters blog page

Differences between the NSW and Australian Modern Slavery Acts

The NSW Act is stronger in its reporting requirements than the Australian Modern Slavery Act and it has a lower reporting threshold (i.e. annual turnover AUD $50 million) than the Australian Act, which has a reporting threshold of AUD $100 million. Financial penalties for non-compliance are imposed only under the NSW Modern Slavery Act, although this is expected to be reviewed in 3 years under the Australian Act. The NSW Act also creates the role of an independent Anti-Slavery Commissioner.

Conclusion

The point of the legislation is to bring awareness and drive change to eliminate modern slavery in companies’ operations and their supply chains. We know addressing modern slavery and human and labour rights issues can be complex and challenging. It will take time, education and commitment from all stakeholders, including board members, managers, procurement teams and suppliers.

Due diligence needs to be taken to map your supply chain, understand where the modern slavery risks may be, engage with your suppliers, and put in place policies and procedures to help your company and your suppliers eliminate the risk of modern slavery impacts.

For more information on how to prepare for the Modern Slavery Act, please visit the Sustainable Business Matters website for a free guide on Preparing for the Modern Slavery Act.

If you would like to book in a free consultation, please call Libby on 0448 026 508 or email libby@sustainablebm.com.au