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!