Tis a Season to be Jolly......

Christmas is a time for giving and sharing, a time to spend with family and friends but it can also be busy and stressful with so many items on our to-do list.

I’ve created some tips and suggestions to help you help the planet and the workers who are making the gifts you are giving, so we can all have a sustainable and stress-free festive season.

I came across a guide called the Ethical Hierarchy of Gift Purchasing, by Just Little Changes, and I thought this is a useful tool for all of us.  I’ve added a few of my own suggestions too!

1.       GIVE MEMORIES – days out, memberships and event tickets.

2.       GIVE GENEROUSLY – collectively give to a charity, it really makes the whole family feel good. Check out Peter Singer’s project, The Life You Can Save, for recommendations on the best charities to donate to for the giving season.

3.       GIVE YOUR TIME – share your skills amongst loved ones, elderly neighbours and those less fortunate.

4.       UPCYCLE – get creative, refinish small furnishings and repurpose old toys.

5.       BUY SECOND HAND – check out your local Op Shop, eBay, Gumtree and car boot sales.

6.       MAKE YOUR OWN GIFT – pickling vegies are so on-trend. What about relishes or spicing up some mixed nuts and popping them in a nice second-hand jar from your local Op shop?

7.       ETHICAL BUYING – support non-profits like Oxfam, Trading Circle, Fairtrade and small start-ups that offer great social and environmental products and have ethical philosophies.

8.       BUY LOCAL – check out your local markets for handmade gifts.

9.       Last but certainly not least, when buying be a CONSCIOUS CONSUMER.

CONSCIOUS CONSUMERS

The last thing most people focus on when purchasing their gifts is, where has it come from, is it environmentally preferable, was there any child or forced labour involved in the manufacturing of this product, and are the workers getting paid a living wage?

WHICH RETAILERS FAIR BETTER?

There are not-for-profits and NGOs that are dedicated to helping shoppers buy with greater awareness of how retailers manage their suppliers, eliminate poor working conditions and protect against the exploitation of factory workers.

There are a couple of great websites and guides that can help you make more ethical and thoughtful decisions. Check the list out here!

BAPTIST WORLD AID – End worker exploitation!

Each year, Baptist World Aid publishes a series of industry reports through it’s Behind the Barcode project. The Ethical Fashion Report and the Electronics Industry Trends Report seek to help Australians shop ethically and, by doing so, advocate with their wallets.

Between them, these two reports assess more than 400 brands operating in Australia and around the world. The reports grade those brands on the strength of the systems they have in place to protect workers in their supply chain from exploitation, forced labour and child labour.

Workers should be protected and not harmed. Workers deserve to work in dignified jobs, without being exploited. And workers deserve to work free from the tyranny of modern slavery but for this to happen, we need to be consumers that care.

Your support means more companies will be held accountable for their actions to protect their workers. 

SHOP ETHICAL – Your consumer guide

The Shop Ethical! Guide draws into one place information on the environmental and social track record of the companies behind common brands. They rate the companies from A to F and assess them on areas of environmental and social impact, treatment of animals and accountable business practices.

You can download the app or you can buy the guide.  They have a search function and a whole heap of listings for appliances, clothing, electronics, food, drink, household products, personal care, pet supplies, retail products, toys and even office supplies.

GOOD ON YOU – Fashion without harm

Trusted ethical ratings in the palm of your hand. Good On You ethical brand ratings give consumers the power to make choices that match their values – choices that reflect consumers’ commitment to doing better by people, the planet and animals.  They believe brands should be transparent and, as a consumer, you have a right to know.

Wishing you all a very Merry Christmas and a happy, healthy and prosperous 2019

International labour standards, going beyond modern slavery

I had the very great privilege to attend the International Training Centre of the International Labour Organization (ILO) in Turin, Italy in October.

The ILO was founded in 1919 and is the only tripartite UN agency that brings together governments, employers and workers of 187 member states to set labour standards, develop policies and devise programmes promoting decent work for all women and men.

The one-week training was titled International Labour Standards and Corporate Social Responsibility: Understanding workers’ rights in the framework of due diligence.

It was an incredible experience and a joy to be in an environment of like-minded and passionate professionals from all over the world and from diverse professions and industries. The conference was attended by people from the UN Global Compact, World Bank, ILO member state agencies and private enterprises in the mining, retail and manufacturing sectors.  Of course, I was the participant who travelled the furthest for the incredible education, which was presented by our two immensely knowledgeable and passionate facilitators, Emily Sims and Karl Pfeffer.

As we know, corporate human rights legislation is being rolled out globally; most notably, through the UK Modern Slavery Act (2015) and, closer to home, the Commonwealth Modern Slavery Bill and the NSW Modern Slavery Act (2018). Because of these two key pieces of Australian legislation, we will see big business and government take the charge with addressing modern slavery in their business operations and their supply chains.  This should lead to changes in how the building and construction sector, big business and government procure products and materials.

Labour standards form part of the human rights due diligence process and are critical to ensuring ethical business practices and combating modern slavery.

The ILO has eight fundamental principles and rights at work, which include:

1.       Forced Labour Convention, 1930 (No. 29)

2.        Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)

3.       Right to Organise and Collective Bargaining Convention, 1949 (No. 98)

4.       Equal Remuneration Convention, 1951 (No. 100)

5.       Abolition of Forced Labour Convention, 1957 (No. 105)

6.       Discrimination (Employment and Occupation) Convention, 1958 (No. 111)

7.       Minimum Age Convention, 1973 (No. 138)

8.       Worst Forms of Child Labour Convention, 1999 (No. 182)

Both forced labour and child labour fall under the definition of modern slavery. 

In regards child labour, the Worst Forms of Child Labour Convention, 1999 (No. 182) is the mostly widely ratified ILO convention, with 182 ratifications, 97% of member states. Despite this, there are 152 million victims of child labour. Almost half of these children – 73 million – are involved in hazardous work and 62.1 million live in the Asia-Pacific region, where there are strong links to Australian supply chains.

Similarly, the ILO estimates that more than 11 million people are victims of forced labour, accounting for well over half of the global estimated number of 21 million victims. Put another way, at least three in every 1000 people in Asia-Pacific are in forced labour, that is, trapped in jobs which they were coerced into and which they cannot leave. Manufacturing is one of the sectors where forced labour is most often found, as well as agriculture, construction and mining.

Businesses, along with government, have a role in eradicating modern slavery and protecting vulnerable workers and children. When conducting supply chain due diligence, businesses and government need to not only consider forced labour and child labour but also ensure that workers in their supply chains have safe and healthy workplaces, are paid a living wage and are not harassed or discriminated against. The ILO labour standards can provide guidance with this.

Another key consideration when working with suppliers is the importance of collaboration and for brands (buyers) to take responsibility for how they contribute to issues of forced labour and poor working conditions. When buyers understand the negative impact that business practices such as imposing unrealistic deadlines, excessively squeezing margins and making late payments have on their suppliers, then meaningful change is possible. The key here is better communication between buyers and factories.

Conclusion

Australian businesses and Government agencies that procure products and materials are likely to have modern slavery in their supply chains.  However, the fact that larger corporations and entities in Australia are now required to comply with Commonwealth and NSW modern slavery legislation will have a flow-on effect to smaller businesses in their supply chains.

This issue is complex and challenging but there are opportunities to create real change in the lives of vulnerable workers when government and industry support enterprises to be transparent about the human and labour rights issues in their business operations and supply chain, and to implement remediation plans to mitigate these issues.   

The International Training Centre is the training arm of the International Labour Organization.

It runs training, learning and capacity development services for governments, employers' organisations, workers' organisations and other national and international partners in support of decent work and sustainable development. 

WHAT IS MODERN SLAVERY

Background

Slavery is universally accepted as a crime against humanity.

The Universal Declaration of Human Rights states: ‘No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms.’ (article 4)

There is of course a moral obligation to respect human rights but increasingly we are seeing legislation being enacted across the globe that addresses modern slavery. Business entities are expected to tackle modern slavery not only in their own business operations but also in their supply chains. 

Countries and states that are taking the lead to address modern slavery are:

• Australia – Commonwealth Modern Slavery Bill (2018)

• New South Wales – Modern Slavery Act 2018, passed through NSW Parliament on 21 June 2018

• France – Corporate Duty of Vigilance Law (2017)

• United Kingdom – UK Modern Slavery Act (2015)

• California – Transparency in Supply Chains Act (2010)

• ·Netherlands – Child Labour Due Diligence Legislation (forthcoming)

NB: Australian Commonwealth Modern Slavery Bill update - The legislation has passed the House of Representatives and will be debated in the Senate during the November sittings. The Bill enjoys cross party support.

What is modern slavery?

Slavery takes away a person’s freedom. It dehumanises people and places them in a system of control and abuse.

Modern day slavery sees different types of exploitation than the slave trade that took place in the 1600s – 1900s.  When we think about this, we picture images of slaves that were considered as possessions, and in many cases involved physical harm and restraints such as chains.

Even though slavery has been abolished for 100s of years, slavery still continues to exist.

In today’s context, modern slavery is more often about psychological control through threats and coercion and the use of force over a person.

The Global Slavery Index estimates that modern slavery practices affect an estimated 40.3 million people worldwide, with 24.9 million in forced labour.

In the business context, all workers have the right to:

• work voluntarily

• retain their personal documents i.e. ID cards or passports

• leave the workplace after work

• resign

• refuse overtime

Forms of modern slavery

• Sex trafficking of adults and children

• Forced marriage

• Human trafficking

• Forced labour

• Child labour

• Debt labour

• Servitude

In the business environment, modern slavery can be found in:

• Construction

• Manufacturing

• Agriculture, forestry and fishing

• Accommodation and food service activities

• Wholesale and trade

• Personal services

• Mining and quarrying

With the top three sectors being construction, manufacturing and agriculture.

High-risk Regions and Countries

Although modern slavery is an international issue that affects all countries, it’s important to understand that two thirds of the estimated 40.3 million people in modern slavery were identified in the Asia-Pacific region, where Australian businesses have links. Consequently, Australian organisations may be unwittingly complicit in modern slavery practices like forced or bonded labour.

I work with manufacturers of building products and interior commercial products like office furniture and flooring, and increasingly the Asia-Pacific region is where most of these products are sourced. It’s really important to consider this, particularly when you are assessing your supply chain risks.

Closer to home, cases of forced labour in Australia predominately occur in high-risk industries, which include agriculture, construction, domestic work, meat processing, cleaning, hospitality and food services.

Internationally, five out of the top 10 high-risk countries are in Africa.  North Korea is the number one country listed with the highest victims of modern slavery and over 2.5 million people are estimated to be affected.

Modern slavery generates over 150 billion dollars of illegal profits every year.

The main forms of modern slavery to be aware of in the business context are forced labour, child labour and debt labour.

So, what is forced labour?

The International Labour Organization’s (ILO) definition of forced labour is: "all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily."

This definition consists of three elements:

1. Work or service refers to all types of work occurring in any activity, industry or sector including the informal economy.

2. Menace of any penalty refers to a wide range of penalties used to compel someone to work.

3. Offered voluntarily refers to the free and informed consent of a worker to take a job and his or her freedom to leave at any time.

What is child labour?

According to the ILO, the term child labour is often defined as work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development.

It refers to work that:

• is mentally, physically, socially or morally dangerous and harmful to children; and

• interferes with their schooling by:

o   depriving them of the opportunity to attend school;

o   obliging them to leave school prematurely; or

o   requiring them to attempt to combine school attendance with excessively long and heavy work.

In its most extreme forms, child labour involves children being enslaved, separated from their families, exposed to serious hazards and illnesses and/or left to fend for themselves on the streets of large cities – often at a very early age. Whether or not particular forms of work can be called child labour depends on the child’s age, the type and hours of work performed, and the conditions under which it is performed. The answer varies from country to country, as well as among sectors within countries.

What is debt labour?

Debt bondage, also known as debt slavery or bonded labour, is the pledge of a person's services as security for the repayment for a debt or other obligation. The terms of the repayment are often not clearly or reasonably stated. For example, the services required to repay the debt may be undefined, and the duration of indebtedness may be unclear.

The person who is holding the debt usually has some control over the labourer and has the power to demand services indefinitely.

Debt bondage can be passed on from generation to generation.

Conclusion

Most Australian businesses, both large and small may be unwittingly complicit in modern slavery.  Understanding where the high-risk areas and industries of modern slavery are is a good start.  Conducting supply chain due diligence will be required to understand where forced labour, child labour and other human right issues may be occurring.

We have over 10 years’ experience working with product manufacturers and their supply chains, and we have lots of tools and resources for implementation.  Please get in touch if we can help.

Additional resources to assist in understanding modern slavery

International Labour Organization – Lured by a job, trapped in forced labour - Published on Oct 2, 2015 (YouTube)

Freedom Foundation – What is Modern Slavery (YouTube)

The Global Slavery Index is a fabulous resource to help you understand modern slavery and it has lots of country-specific data

Walk Free Foundation

Standards and Frameworks to Address Modern Slavery

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.

Over 3000 Australian businesses are likely to be reporting to the Australian Government under the Modern Slavery Act, and in addition, it’s been suggested that over 10,000 entities will be subject to reporting under the NSW Modern Slavery Act.

Businesses will be required to report on what they are doing to address modern slavery in their business operations and their supply chains. 

There are numerous frameworks and standards that can help companies implement ethical business practices and address modern slavery risks. Here is a snapshot of these frameworks and standards:

• UN Global Compact

• SA8000® Standard (Social Accountability)

• ISO 26000:2010 – Guidance on social responsibility

• ISO 20400:2017 Sustainable procurement – Guidance

• Sedex (Supplier Ethical Data Exchange)

UN Global Compact (UNGC)

Issues addressed: human rights, labour rights, environment and anti-corruption

The UNGC is a United Nations initiative to encourage businesses worldwide to adopt sustainable and socially responsible business practices. The UN Global Compact is the world’s largest sustainability initiative and is both a practical platform and a learning resource for businesses and stakeholders across the globe.

Signatories (or participants) to the UN Global Compact are required to sign a CEO Statement of Support, which is a statement of commitment to address the 10 guiding principles and the broader social goals outlined in the UN’s Sustainable Development Goals (SDGs).

After 12 months of becoming a signatory the organisation is required to produce an annual Communication on Progress (CoP), outlining how the organisation has addressed the 10 guiding principles.  The report needs to be submitted annually and is uploaded onto the UN Global Compact’s website.

The UN Global Compact is not an auditable standard – it is based on self-disclosure.

The 10 principles include:

Human Rights

-        Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

-        Principle 2: make sure that they are not complicit in human rights abuses.

Labour

-        Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

-        Principle 4: the elimination of all forms of forced and compulsory labour;

-        Principle 5: the effective abolition of child labour; and

-        Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

-        Principle 7: Businesses should support a precautionary approach to environmental challenges;

-        Principle 8: undertake initiatives to promote greater environmental responsibility; and

-        Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

-        Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

UN Global Compact website

SA8000 (Social Accountability)

Issues addressed: labour rights standards including child labour, forced labour, health and safety, freedom of association and the right to collective bargaining, discrimination, disciplinary practices, working hours and remuneration

SA8000 is an auditable certification standard that encourages organisations to develop, maintain and apply socially acceptable practices in the workplace and to incorporate them into a management system. 

The SA8000® Standard can be applied to any company of any size worldwide.  Adopting SA8000 certification means an organisation must consider the social impact of their operations in addition to the conditions under which their employees, partners and suppliers operate.

One of the key requirements of the SA8000® Standard is for workers (usually factory workers) to be paid a living wage. Wages shall be sufficient to meet the basic needs and to provide discretionary income – in some cases this may be more than the minimum wage determined by the law of the sovereign state.

The table below outlines stats relating to the number of facilities that are certified to SA8000, the countries represented, the industries represented and the number of employees who are working in SA8000 certified facilities.

• Number of employees -1,998,17

• Certified facilities-3,860

• Countries represented-64

• Industries represented -56

Social Accountability Internationally (SAI)  

ISO 26000:2010 – Guidance on social responsibility

Issues addressed: human rights, labour rights, environment, fair operating practices, consumer issues and community

The ISO 26000:2010 Guidance on social responsibility addresses the following seven core subjects:

• Human rights

• Labour practices

• The environment

• Fair operating practices

• Consumer issues

• Community involvement and development

• Organisation/Governance

The ISO 26000 is an excellent resource to help organisations adopt sustainability practices and it provides lots of background information about social responsibility, including principles (accountability, transparency, ethical behaviour, stakeholder interests, human rights) and characteristics (expectations of society and role of stakeholders) of CSR.

The guidance document also offers detailed information about the seven core subjects and the Annex includes a really useful table that gives a cross-sector analysis of how the seven core subjects relate to other intergovernmental initiatives like the OECD, UN Global Compact, Global Reporting Initiative, Ethical Trading Initiative, and SA8000.

This document can be used by organisations of all sizes, including small to medium-sized organisations (SMOs) as it includes specific considerations for SMOs.

ISO 26000 is not a management system standard and as such cannot be used as certification.  It is to be used as a guidance document only.

International Organization of Standardization (ISO)  

ISO 20400:2017 Sustainable procurement - Guidance

Issues addressed: human rights, labour rights, environment, fair operating practices, consumer issues and community

ISO 20400:2017 Sustainable procurement – Guidance provides guidelines for organisations wanting to integrate sustainability into their procurement processes.

The standard defines the principles of sustainable procurement, including accountability, transparency, respect for human rights and ethical behaviour, and it highlights key considerations such as risk management and priority setting. It also covers various stages of the procurement process, outlining the steps required to integrate social responsibility into the purchasing function.

ISO 20400 is aimed at organisations of all sizes in both the public and private sectors, as it applies to virtually every purchasing decision from office supplies and caterers, to energy providers, building materials and more.

By focusing specifically on the purchasing function, ISO 20400 is a sector-specific application of ISO 26000.

ISO 20400 provides guidelines, not requirements. It is therefore not intended for certification purposes.

International Organisation for Standardization (ISO) ISO 20400:2017

Sedex (Supplier Ethical Data Exchange)

Issues addressed: labour, health and safety, environment and business ethics, which include anti-corruption

Sedex is a not-for-profit membership organisation for businesses committed to the continuous improvement of ethical performance within their supply chains.

Sedex was founded in 2001 by a group of UK retailers to drive convergence in social audit standards and monitoring practices. It’s tools and services are used by more than 50,000 members in over 155 countries.

The aim of Sedex is to ease the auditing burden on suppliers through the sharing of reports and to drive improvements in supply chain standards. Companies such as Coles, Bunnings, Officeworks and Wesfarmers Industrial and Safety use Sedex to help manage their supply chain risks.

Sedex provides fantastic resources to assist you to work with your supply chain on labour issues, workers health and safety, environmental management and business ethics.

Sedex

Need help…..

If your organisation needs help identifying which certification scheme or framework best suits your business or sustainability strategy, please get in touch. We welcome the opportunity to help you develop your sustainability program.

Are your supply chains free of Modern Slavery?

Background

I attended the Modern Slavery Forum back in April 2017, hosted by the UN Global Compact in Sydney. Andrew  Forrest, non-executive chairman of Fortescue Metals, was part of the line-up of speakers.  He spoke with such passion and commitment about eradicating modern slavery.  He was incredibly inspiring!  Andrew has been a passionate advocate for a number of years and set up the Walk Free Foundation with his family in 2012.

The reason why I mention Andrew Forrest is because he made a comment that was incredibly powerful and stays with me to this day.

Andrew is certain slavery is endemic throughout the supply chains of Australian businesses and he suggests we should “celebrate when we find modern slavery in supply chains” as there is an opportunity to remediate and work with the supplier to improve the conditions of the workers who are making the products and materials we procure. He’s been very public about his own efforts to clean up forced labour in Fortescue Metals’ supply chains.

Of course, Fortescue Metals are likely to have more influence over their suppliers than a small-to-medium enterprise, so I don’t want to underestimate the incredible complexity of conducting human and labour rights due diligence when determining modern slavery within supply chains.

The Modern Slavery Act

Over 3,000 Australian businesses are likely to be reporting to the Australian Government under the Modern Slavery Act (Cth) once it has passed through parliament and takes effect in the second half of 2018. Even more entities must report under the recently passed Modern Slavery Act (NSW). It has been suggested that over 10,000 entities will be subject to reporting. These two new pieces of legislation are likely to directly affect a number of building and interior product manufacturers, and most product manufacturers will be indirectly affected.

If, as a product manufacturer, you are supplying products to government departments, universities, or large corporations like banks, telcos, insurance, building and construction companies who must meet this legislation, then these organisations will be likely conducting due diligence on your organisation to determine the risks associated with modern slavery in your operations and that of your supply chains.

There will be opportunities for early adaptors in this space.  Entities who will be reporting under the Modern Slavery Act will want to partner with organisations that are working to combat modern slavery in their supply chains.  Product manufacturers should consider this in their sustainability strategy. And, I suspect, in the coming years, it will be part of many large organisations’ tender requirements.

How to determine if modern slavery exists in your supply chains

To understand if you have modern slavery in your supply chain it would be advisable to conduct a risk assessment of your suppliers. The steps below will assist this process.

STEP ONE – Conduct a high level, broad analysis of your supply chains. Consider tier 1, 2 and 3 suppliers for the possibility of modern slavery. 

STEP TWO – Map your supply chain. Record where your suppliers are located (region); which country, size of the entity, your dollar spend, whether you have influence over the supplier, and what sort of processes pose the most risk. For example, powder coating and chrome plating in the South Pacific region could be a potential risk for furniture manufacturers to consider.

STEP THREE – Engage with your suppliers and where possible have a conversation with them so you can explain why you are asking specific questions relating to modern slavery (human and labour rights). It’s important to get your suppliers on board. Addressing human and labour rights will not happen overnight and needs commitment from all parties.

STEP FOUR – Document a Sustainable Supply Chain Questionnaire that lists all business human and labour rights issues. Ask your suppliers if they have policies, procedures, and processes in place to address forced labour, child labour, indentured labour, and anti-discrimination.  Ask for evidence to support this.

STEP FIVE – When you have received and reviewed the responses from your suppliers, rate them according to the level of risk they pose. Analyse the responses and set an action plan to start addressing the high-risk suppliers. Set minimum compliance requirements and an Ethical Code of Conduct. 

Additional Guidance

When you’re conducting sustainable supply chain due diligence, don’t just focus on modern slavery issues such as forced labour, child labour and indentured labour, go for the broader human and labour rights issues. These include anti-discrimination, freedom of association and collective bargaining, fair pay and remuneration, and, of course, the health and safety of workers. 

Also include environmental checks.  Check to see how your suppliers are managing their environmental impacts (i.e. waste, energy, emissions, material efficiencies and chemical management) and environmental legal compliance.

The supply chain risk analysis is just the first step in sustainable supply chain due diligence and eradicating modern slavery. If you would like further help with sustainable supply chain due diligence or modern slavery compliance, please give us a call.

Tools and resources that can assist in assessing high risk areas of modern slavery

There are various tools and subscription models that can help conduct risk assessments. The Global Slavery Index is one, another is Verisk Maplecroft.

Links to interesting articles

CHOICE, 14 AUGUST 2017 – Modern Slavery in Supply Chains, Daniel Graham

SYDNEY MORNING HERALD OPINION, 2 JULY 2018 – Found slaves in our supply chain, Andrew Forrest

The NSW MODERN SLAVERY (2018) ACT is here - how this will impact your business

On 21 June, the NSW Parliament passed a Modern Slavery Act, the first legislation in Australia that requires corporations with earnings over AUD$50million to have mandatory reporting on modern slavery in their supply chains.

Modern slavery is one of the most abhorrent global human rights problems at present, with a troubling number of instances still occurring both in Australia and overseas. So, it’s great to see the NSW Parliament taking such a strong stand and enacting a bill which includes penalties for non-compliance.

The objective of the Act is:

a) to combat modern slavery,

b) to provide assistance and support for victims of modern slavery,

c) to provide for an Anti-Slavery commissioner,

d) to provide detection and exposure of modern slavery that may have occurred or be occurring or that is likely to occur,

e) raise awareness of, and provide for education and training about modern slavery

f) to encourage collaborative action to combat modern slavery

g) provide assessment of the effectiveness of laws prohibiting modern slavery and to improve the implementation and enforcement of such laws

h) provide for mandatory reporting risks of modern slavery occurring in supply chains of government agencies and commercial organisations

i) to make force marriage of a child and certain slavery and slavery-like conduct offences in NSW

j) to further penalise involvement in cybersex trafficking

What this means for business

Commercial organisations with an annual turnover of over AUD$50million and operating within NSW are mandated to report annually on what they are doing to combat modern slavery within their supply chain.  Reporting will be required within 5 months from 30 June, each year. 

Key points to the anticipated legislation:

1. Companies will be 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

2. 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

3.  Organisations’ modern slavery statements are to include:

a. The organisation’s structure, its business and its supply chains

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

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

d. Training of employees about modern slavery

4.       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 a full list of requirements under Part 3, Supply chains, Transparency of supply chain, please review the full Modern Slavery 2018 NSW bill.

Government agencies will also be impacted by the NSW Modern Slavery Act

As well as the legislation requiring corporate entities to report, the Act will have a significant impact on NSW government agencies and their procurement processes.

It imposes an obligation for government agencies to take reasonable steps to ensure that the goods and services procured by and for the agency are not the product of modern slavery.

There will be an amendment to the Public Works and Procurement Act to ensure that one of the objectives of the NSW Procurement Board is to oversee this and departments will have to provide annual reports that lay out what steps have been taken to ensure that goods and services, which have been procured, are not the product of modern slavery.

It is expected that the Commissioner will regularly consult with the Auditor-General and the NSW Procurement Board to monitor the effectiveness of due diligence procedures within government agencies.

Opportunities for product manufacturers

If your organisation is not directly affected by the NSW Modern Slavery Act and is not required to report, it may be that the Modern Slavery Act indirectly affects your business.  If your company is supplying goods or services to companies that are having to report, then I would suggest you start conducting supply chain due diligence on your suppliers so you too understand your level of risk and whether your supply chain is free from modern slavery. 

I suspect there will be opportunities for companies that demonstrate their commitment to addressing supply chain risks. Large companies and government agencies will want to partner with socially responsible organisations.

Key takeaways

1. Understand the legislation if your commercial business falls under the reporting threshold.

2. Seek to understand not only the requirements of the Modern Slavery Act, but also your supply chain risks.

3. If your business does NOT fall under the reporting threshold, know that you may be indirectly affected.

4. Set up a system for supply chain due diligence – it won’t only be a government requirement, but industry too.  The Green Building Council of Australia has made it known that they too will be looking at addressing modern slavery (human rights) in supply chains in the next evolution of Green Star rating tools.

5. If you are supplying products to government agencies, know that they will want to partner with organisations that understand their supply chains and have systems in place to conduct proper supply chain due diligence to mitigate risk of modern slavery.

6. The Australian Government in the second half of 2018 will also be legislating against modern slavery.

7. Penalties apply for non-compliance for the NSW Modern Slavery Act.

If you would like to know more about the Modern Slavery Act or how to start the process of conducting sustainable supply chain due diligence, then please get in touch.

Important Links

NSW Modern Slavery Bill 2018

Commonwealth Director of Public Prosecutions (CDPP)- Human Trafficking and Slavery

Green Building Day 2018 - Shaping the future state

Green Building Day 2018 – Shaping the Future State

I was lucky enough to attend two events with the Green Building Council of Australia (GBCA), at the end of May.

The annual Green Building Day 2018 – Shaping the Future State was an interesting event, which focused on key trends – both financial and mega global – that have the potential to affect our cities and our way of life.

The second event was the Green Star Future Focus Workshop, which was held throughout Australia – Sydney, Melbourne, Perth, Brisbane and the Northern Territory – and was a roadshow of sorts to bring together industry sustainability professions to provide input into reshaping the Green Star rating tools.

This month’s blog is jam-packed with information from both these events, including a summary of key market trends that are shaping our future as well as the proposed changes to the Green Star rating tools. Understanding the big picture will help you better serve your clients and grow your business.  

Green Building Day - Shaping the Future State

The first presentation to kick start the day was given by Justin Smirk, senior economist, Westpac.  Justin offered the following economic insights:

• 2018 has experienced a solid start with strong global economic growth
• Global trade is at a very high level, which is feeding optimism
• Growth in China is slowing, tighter lending restrictions
• India has experienced a long run of growth but it can’t replicate China, as they don’t have the resources

Domestic economy

• Australia has experienced 28 years of growth – we’re in the midst of an economic party
• business services is a new growth driver
• consumption is slightly faster than income
• job growth is good, with huge growth in health, education and construction
• wages are languishing – it’s a low income environment with low savings and no buffer like during the mining boom
• more woman are in the labour force and this is an upward trend
• male jobs are not keeping up, unemployment for males is on the rise and this effects a mix of sectors (white collar, manufacturing and construction)
• RBA wants to see higher wages
• mining is in recovery

Housing

• property prices in Sydney have experienced a modest price correction
• house prices have grown quicker than wages due to ease of obtaining credit but growth cannot be sustained
• credit is getting tighter – US rates are going up
• RBA hasn’t increased rates but credit is more expensive
• banks will become more competitive as to how they acquire funds so we may see some major differences in how they lend and different interest rates – currently the banks’ interest rates are all fairly similar
• lower Aussie dollar will keep interest rates low
• affordability is still stretched

Please note, as a ‘disclaimer’ I was busy scribbling down these points so all facts are my interpretation of Justin’s presentation, and he too had a rather lengthy disclaimer.

Justin completed the presentation by summarising…It’s not going to be a boring year!

Weak income growth is set to contain consumption. House prices are set to fall and the cash rate is currently on hold and may continue so into 2019. Political uncertainty will weigh on business. The US has powered ahead in the age of Trump but we must prepare for uncertain events like higher interest rates, a stronger US dollar, and a weaker AUD TWI. China is expected to tightening credit further, which will slow commodities with prices falling and the share markets are also vulnerable to US bonds.

We had Dr Stefan Hajkowicz, senior principal scientist, Strategy and Foresight at CSIRO, give an exceptional presentation on global mega trends. Here is a snapshot of what’s ahead.

• More from less – there’s a shift towards creating greater efficiency from less resource consumption, for example above ground mining of metals and minerals, and resource recycling through E-waste
• Planetary push back – battery storage technology is key to how we will obtain energy in the future
• The Silk Highway – Asia’s economic growth involves billions of people being lifted out of poverty
• Forever Young – we’re facing an aging population and problems with healthcare funding
• Digital Immersion – with artificial Intelligence there will be a whole digital reinvention of our economy
• Porous Boundaries – platform economics and blockchain technology will have significant impact on how business is done
• Great expectations – human experience has to have a high experiential’ factor
• Antibiotic resistant bacteria could make climate change a moot point in terms of a threat to humanity

Other important information and musings

• Climate Change so far 2016 was the warmest year on record and fifteen of the sixteen warmest years on record have now occurred since 2001  

https://climate.nasa.gov/climate_resources/139/graphic-global-warming-from-1880-to-2017/

• Plants make a plausible difference to heat stress – for example, in a heat wave, areas that have greenery and planting cope better
• Sustainable business – success depends on anticipating future market demands rather than focusing solely on current market demands – think long term
• Reducing the cost to do Green Star – GBCA is working towards reducing the cost of Green Star certification

So what are the key takeaways?

• Sustainability means building strategy for change and documenting an action plan
• To be a sustainability leader you need to look at your risks and strategy – what are the big issues, what is material to your business, what is important to your stakeholders, and what are the present opportunities?
• Gen Y employees want to be involved with a company that has a sense of purpose – young people are all about the why
• The GBCA’s Carbon Positive Roadmap will be released on 29 June 18 – keep your eye out for it and think products with low embodied energy, this is the future for product manufacturer
• Human rights are in focus with the Modern Slavery Act so businesses need to address the human and labour rights of vulnerable workers within their supply chain

In light of these future trends and market requirements, the main areas of focus for product manufacturers are modern slavery and carbon. If you want to meet market expectations, start conducting sustainable supply chain due diligence to ensure there is no modern slavery in your supply. Also consider the embodied carbon in your products.

Green Star Future Focus Workshop

The second GBCA event was the Green Star Future Focus, which was a half day workshop with professionals from a variety of industries and sectors, including  government, academia, construction, engineering, ESD consultants, design, product manufacturers  and, of course, the Green Star team.

The GBCA hosted this event and was asking participants to help define:

• What is world leadership in the built environment for human rights issues, resilience, transport, planning, livability, ecology and biodiversity, and health and wellbeing?
• What is best practice? And how do we make sure we don’t leave the mid-tier sector behind?
• How will mandating ongoing operational ratings work?
• How can we change certification to make it cheaper and more streamlined?
• And what lessons should we learn from previous updates?

The GBCA’s vision is to create healthy, resilient and positive places for people and the natural environment. Their purpose is to lead sustainable transformation of Australia’s built environment.

The GBCA’s ongoing commitment to sustainability includes:

• Meeting Paris Agreement obligations
• Redefining world leadership
• Promoting best practice
• Addressing social sustainability
• Driving change in the supply chain
• Bringing back nature to our built environment
• Guaranteeing minimum outcomes
• Driving operational experience
• Promoting holistic thinking

The GBCA would like industry feedback. They are keen to learn and to know what’s important to you and your industry, so please make contact with them.

Also, keep an eye out for GBCA’s Positive Carbon Roadmap for the Built Environment – due to be released late June.

If you would like assistance with creating a sustainability strategy that meets your clients’ future needs or if you need help with supply chain due diligence, please get in touch.

The Australian Modern Slavery Act 2018

Australia is adopting a Modern Slavery Act – so what are the implications for Australian businesses?

The Australian Government is calling on organisations with earnings over $100 million AUD dollars to report annually on what they are doing to address modern slavery – not only within their own business operations but also in their supply chain.   The turnover threshold for businesses is $100 million and will affect companies, government and other legal entities.

The legislation, due to be in place mid to late 2018, is intended to foster transparency and encourage businesses to identify issues and improve practices. It’s about visibility and accountability.

Currently there are 15 Australian companies that are already reporting under the UK Modern Slavery 2015 Act. Some of these include Lendlease, Multiplex, Qantas, Westpac, NAB, Macquarie Bank, ANZ, Rio Tinto, Westfarmers, Brambles and BHP Billiton.

Having attended a Modern Slavery Act Readiness Seminar hosted by the Green Building Council of Australia (GBCA) in April, it is clear that the building and construction industry, along with GBCA, are eager to support this new legislation. There is a push to bring awareness to this very important issue and for industry to play their part in eradicating modern slavery.

So what is modern slavery and who does it affect?

Modern slavery takes many forms including forced labour, wage exploitation, child labour, sexual exploitation and human trafficking.

Global slavery isn’t merely a historical relic. In 2016, around 40.3 million men, women and children, from every part of the globe, were victims of modern slavery. In 2016, the Walk Free Foundation produced a Global Slavery Index report  which found that two thirds of modern slavery occurred in the Asia-Pacific region – involving around 30,435,300 men, woman and children.

In an article posted by Michael Chen Head of Sustainability at Westpac, almost every industry is affected but higher risk exists in:

• Manufacturing (including electronics, steel, automobiles, garments and textiles)

• Agriculture, seafood and aquaculture

• Mining and minerals

• Shipping and transportation

• Construction and commercial property

What is the legislation likely to require?

Under the proposed Australian Modern Slavery Act, entities that have any part of their operations in Australia, and have earnings over $100 million, will require board-level sign-off on a public statement outlining their risk assessment, management approach (including policies and procedures), and due diligence processes in relation to modern slavery. This statement will be required to be reported annually on the entity’s website and to a central public repository of reports.

At this stage, no penalties are proposed for entities that do not fulfill these requirements, although, I suspect, most organisations understand the reputational risk to their brand, and shareholders and consumers will expect them to comply. 

Opportunities for product manufacturers who are early adaptors

This legislation is likely to directly affect hundreds of Australian and international corporations and, indirectly, thousands of small to medium sized businesses who supply these entities with goods and services. There will also be opportunities for smaller entities to opt in on the reporting requirements of the Modern Slavery Act.

So, if you’re supplying products to these corporations, working on Green Star projects or supplying materials to top tier building and construction companies, there is an opportunity for you to help these organisations by addressing your own internal business practices and that of your supply chain.

Although the government is legislating on modern slavery, this talks to the broader issue of workers’ human and labour rights. Human and labour rights issues include not only slavery but also fair working conditions, the health and safety of workers, anti-discrimination, freedom of association and child labour.

No company or business owner wants to support organisations that have unethical business practices so we have some suggestions on the best way to begin this critical and complex journey.

Here are my top 5 tips for product manufacturers who want to address these issues:

1. Hiring casual staff – ensure the labour hire company that you are working with has recruitment and employment practices and standards that comply with local and national labour laws.

2. Review your own internal labour polices – as stated above, this talks to the broader issue of human and labour rights. Ensure you have policies and procedures in place and that staff are made aware of these policies (e.g. work health and safety, fair pay, equal opportunity and anti-discrimination).

3. Make a commitment to conduct supply chain due diligence – map your suppliers, conduct risk assessments, look at areas where there is the high likelihood of human and labour rights issues occurring, and start engaging with your suppliers.

4. New suppliers – set up new procedures and processes so when you are procuring new products or materials from regions or countries of high risk, you only procure from organisations that have a high level of compliance. Check their business operations by issuing questionnaires that cover off environmental and social compliance.

5. Education is the key – help your suppliers understand the importance of addressing this issue. Australia is not the only country legislating against modern slavery. The UK has had legislation in place since 2015. Other countries such as the US, Switzerland, Germany and the Netherlands are also looking at legislating against modern slavery. If your product or material manufacturer is supplying goods to these regions, then they should be complying with international human and labour rights standards.

We understand that conducting sustainable supply chain due diligence can be tricky, frustrating and difficult but it’s also rewarding, especially when you see that you are having influence and creating better working conditions for vulnerable workers.

If we can help you help your clients combat modern slavery, and help you understand how to conduct supply chain due diligence, please get in touch.

Further blogs will be posted on sustainable procurement, sustainable supply chain, and frameworks and standards to help you manage this process.

Useful links

PROPERTY COUNCIL OF AUSTRALIA – Looking Through the Human Rights Lens, 13 Dec 2017

GREEN BUILDING COUNCIL OF AUSTRALIA – Future Focus for Product Manufactures

The next evolution of the Green Star rating tools

The beginning of sustainable transformation of the built environment started in 2003 when the Green Building Council of Australia (GBCA) launched the first Green Star rating tool, Office Design v1.

In more recent times, industry has become familiar with four Green Star rating tools that address the majority of Australia’s built environment - these tools include:

• Design & As Built
• Interiors
• Performance
• Communities

At the start of 2014, there were 646 Green Star certified projects – today, there are 1750. That’s an additional 1000 buildings, fit-outs and communities in three short years and it gets more impressive:

• Thirty-seven per cent of Australia’s office space is Green Star-rated
• More than 725,000 Australians work in Green Star offices
• 42,000 people live in Green Star apartments
• More than 425,000 people are moving into Green Star-rated communities
• 1.3 million people visit a Green Star-rated shopping centre each day

So, when it comes to the GBCA tackling broader sustainability issues, what’s next?

Global megatrends are reshaping our industry and the built environment. This is being driven by the Paris Climate Change Agreement and the UN Sustainable Development Goals, legislation which tackles issues associated with modern slavery, human rights, health and wellbeing of building occupants, big data and artificial intelligence.

The GBCA are aware that Green Star must evolve and adapt to meet industry expectations of what a sustainable built environment should deliver so they are planning on updating the Green Star rating tools to reflect this evolution.

They have produced a summary paper on the Green Star Future Focus, which outlines their vision, the proposed changes and timeframes, and invites industry into a consultation process.

The GBCA has also produced a Green Star Future Focus fact sheet, specifically designed to educate product manufacturers about the proposed changes in the new version of the Green Star rating tools. The GBCA is also offering manufacturers opportunities to provide feedback about the potential benefits and possible challenges involved in this change process.

The proposed changes will:

• increase focus on the environmental and social impacts of products and materials
• address embodied carbon
• introduce recognition for the use of carbon neutral certified products, materials and services, and
• reward and recognise the social sustainability of transparent supply chains. Manufacturers and supply companies of major materials used on Green Star projects will also be encouraged to report and disclose to builders, developers and owners, their commitments to addressing human rights violations in the supply chain.

What this means for product manufacturers

There are opportunities for product manufactures to show leadership and to demonstrate commitment to addressing environmental and social impacts.  The proposed changes mean your clients will be seeking:

1. A specific Environmental Product Declaration (EPD) in accordance with ISO14025 or EN15804.  The purpose of an EPD is to accurately measure the life cycle impacts of products and to calculate the embodied carbon of the product.

2. Carbon neutral certification either from the Australian Government Carbon Neutral Certified program or from other recognised bodies. An EPD will assist the product manufacturer in achieving carbon neutral certification.

3. Environmental product certification, noting that holistic certifications, which address social and health impacts, will be more valued.

4. A public commitment to addressing human rights issues in your supply chain.

The GBCA are keen to hear your thoughts on this and they have a public comment period open until the 30 April 2018.

The new rating tools will be released from 2020 onwards and will likely become mandatory for Green Star projects from 2021 onwards.

Stay tuned - If you want to stay up to date with the Green Star changes, then sign up for GBCA’s newsletter and or follow on social media. A detailed consultation paper will be released later in 2018 and this will be followed by further engagement to develop Green Star credits, educational content and delivery of rating tools through later 2018 and early 2019.

For detailed information on the future focus of Green Star and information from GBCA check out the links below.

Let’s talk about the future of Green Star, by GBCA’s Jorge Chapa

GBCA Future Focus for Product Manufacturers

GBCA Green Star Future Focus Summary Paper

If we can help future proof your organisation for this transition, please call to arrange an appointment.

Libby

Is being good, good for Business?

It was Anita Roddick, the founder of the Body Shop, who said, “Being good is good for business”. This quote is my inspiration for driving change with my clients. I’m not only motived by good outcomes for the planet, I want good business outcomes for my clients. I want to show them that their businesses can flourish and prosper in tandem with having good ethical business practices.

Dame Anita Roddick was a British businesswoman, human rights activist and environmental campaigner who shaped ethical consumerism and proved that you could operate a thriving, profitable and ethical business.  She was a true trailblazer!

It is a different ball game, however, for smaller organisations. Running a small business is challenging but whilst directors and managers may be constantly juggling multiple priorities, it’s still possible to incorporate business ethics into your organisation.  There are plenty of opportunities to:

·         create a better working environment for staff

·         have a positive impact on the environment and the community

·         engage with your suppliers around their environmental and social                        initiatives

In small business, these initiatives really need to come from the TOP. Without strong leadership from the director or GM, it’s unlikely that any environmental or social initiative will get off the ground.

I work with a number of small to medium enterprises and one client, in particular, is a great example of strong, ethical leadership. The Managing Director’s commitment to making a difference in people’s lives starts with his own staff and he demonstrates this by creating a great work environment. The offices are well decked out with lots of plants and greenery and it’s a great space to be in. The manufacturing facility has a gym and a personal trainer to help keep staff fit and healthy, and he really goes all-out with the staff Christmas parties as an opportunity to say thank you and give back. He also ensures that he and his staff support charities and community events, not only in Australia, but also overseas – he loves to get his staff involved so they too get a kick out of helping others. It’s a win win!

BUT being good is not just about taking care of your own staff and your local community; it’s about addressing sustainability issues in the broader context. By this, I mean ensuring that the products and materials you are procuring are made without any human and or labour rights abuses and with minimal environmental impact.

So, with that, this Managing Director is working with his key suppliers and issuing a Suppliers Code of Conduct, which, in short, means that he wants the suppliers to commit to taking care of their staff by:

·         paying them a decent wage

·         ensuring they are working in a safe environment

·         that there is no child, forced or bonded labour

·         no discrimination or corruption

·         that they have the right to freedom of association and collective                          bargaining

·         that they are free from harassment

He does all this because he believes it’s the right thing to do.  His business is thriving and every so often it makes me wonder if the two are connected!

This example is inspiring and I feel real change is around the corner. Businesses may soon not have a choice to do the right thing. It may be that addressing environmental and social compliance becomes a pre-request for doing business with the larger organisations like banks, telcos, insurance companies and construction companies.

The Australian government is planning on enacting a Modern Slavery Act in 2018. The Modern Slavery Act will see entities earning over 100 million dollars report annually, outlining their actions to address modern slavery in supply chains. The government wants the business community to respond more effectively to modern slavery and develop and maintain responsible and transparent supply chains.

Over 30 million of the estimated 40 million people under modern slavery around the world are in the Asia-Pacific region, where a lot of Australian companies are sourcing products.

A number of large Australian companies have been conducting supply chain due diligence (environmental and social compliance) on product manufacturers for a number of years but I suspect due to the Modern Slavery Act, this will become a greater priority for them.

I have helped a number of clients (product manufacturers) complete extensive and complex questionnaires from construction companies asking for full environmental and social compliance to qualify to work with them. So, it just makes good business sense for product manufacturers to start procuring products that are made without any harm to the environment and or human health. 

Large companies see the advantages of partnering with these types of organisations.

Some tips on how to build an ethical brand

1. DEFINE your company values. Doing the right thing for your business starts with defining core values. Identify what values are important to you and your organisation using a collaborative approach – find out what’s important to your staff.

2. COMMUNICATE effectively. Make sure your company values are well communicated and front of mind so when tricky situations arise, these values can be called upon.  Let them be the company’s moral compass.

3. LEAD by creating winning teamwork. Leading people to do the right thing as a team can be challenging but lead by example, take accountability, make the tough decisions, motivate, inspire and recognise good behaviour and teamwork.

4. ENDEAVOUR to beat, not meet, industry standards. Doing the right thing is not just about getting by or following the rule of law; it’s about meeting and exceeding clients’ and industry expectations. Lastly, but certainly not least;

5. DEVELOP a strategy. Conduct a gap analysis of the work you have already done in relation to environmental and social initiatives. What’s your vision, what does best practice look like? If you want to be an industry leader in sustainable and ethical business practices, then plan out the next 5 years.

And don’t assume that doing the right thing comes naturally and doesn’t require effort and perseverance. Nothing worthwhile is easy, but it’s likely your good work will be rewarded. 

Links to organisations that demonstrate company values and purpose

Pepsico, Performance-with-purpose

Patagonia, Environmentalism

Unilever, Sustainable-living

For further guidance on how to build an ethical brand, please contact Libby at Sustainable Business Matters.