Australian businesses readying for action to combat modern slavery

For Australian businesses, addressing modern slavery within supply chains is no longer a question of why it should be done, but how. Yet the importance of addressing this and other human rights abuses by businesses is not a message that is filtering through to the top levels of government.

“One of the arguments put to me by certain ministers and shadow ministers is that businesses don’t want a modern slavery act — they think it is an impost on business,” Andrew Forrest, chairman of Fortescue Metals Group and founder of the Walk Free Foundation, told Devex. “These ministers are hearing from a third or fourth level bureaucrat who has no real idea about the depth and tragedy of modern slavery. I am a businessperson and I am saying this is an important business issue and we want it addressed through a modern slavery act. Australian businesses have networks that cobweb all over Asia and the Indo-Pacific region, where 70 percent of the world’s slaves are literally incarcerated.”

Following in the footsteps of the United Kingdom, the Netherlands and France, which have introduced modern slavery legislation, the Australian government is conducting an inquiry into establishing a Modern Slavery Act in Australia. As part of this, the inquiry is currently seeking feedback from organizations, in Australia and internationally, on the importance of the act to their business.

It is an opportunity business groups are urging their members to be vocal on.

Motivations of the inquiry

Chris Crewther, Liberal Party MP and chair of the inquiry, told an audience of business representatives, at the modern slavery forum hosted by the Global Compact Network Australia on April 6, that despite misunderstandings of the potential burden to business, instruction of the act has cross-party support within government.

Vocal support of businesses, including the Business Council of Australia, which represents the top 100 companies and organizations in Australia, were instrumental in achieving this.

Rather than determine if legislation was relevant, the inquiry was going to be more focused on the most appropriate way of introducing it to Australia — it would not simply be a “copy and paste” of external legislation.

Included in the inquiry would be discussion on a repository of businesses covered by the act to be searched publicly for greater accountability, establishment of an anti-slavery commissioner, the business income threshold required before the act is relevant and an optional opt-in for businesses under that threshold.

“It is critical that businesses speak up and share their views as to why they see potential benefits in this legislation,” Alice Cope, executive manager of the GCNA, explained to Devex. “The government will need to hear from businesses on why this is important and the benefits to them, as well.”

Modern slavery is complex and an issue for all businesses

Speaking to Devex about his personal experiences with slavery in his supply chain, Forrest said that it is unrealistic for any business to consider themselves untainted by modern slavery, due to the complexity of supply chain networks.

“I discovered slavery in my supply chain,” Forrest said. “I discovered it because I bothered to look in detail at my network. I sent out affidavits to all my suppliers to sign attesting there was no forced labor in the supply chains. Several of our suppliers could not sign the affidavit or refused to.”

In investigating the barriers to sign off, Forrest came across a large manufacturing organization based in the Middle East, which was also working with a number of Fortune 500 companies. “They had thousands of East Indian, Indonesian and Thai workers trapped in remote warehouses in a desert,” he said. “These people could not leave — their passports were confiscated — and were literally slaves.”

Discovering slavery within a supply chain does not mean failure of a business in addressing human rights. It is an opportunity to make a difference.

“No one is going to get this perfect the first time around,” Vanessa Zimmerman, group advisor for human rights with Rio Tinto, explained to Devex. “It is a complex issue and businesses equally have complex supply chains. But you have to start by thinking about processes to better understand supply chains. It’s not OK to say it’s too complex.”

Forrest is continuing to engage in debate on the topic with the hope of questions and pushback. “The instant people think they don’t have slavery and their company shouldn’t be bothered with, they are the people and they are companies that are the reason slavery exists in supply chains — they don’t bother to look.”

What should Australia’s modern slavery act include?

According to Cope, the GCNA are seeing strong support from Australia’s business sector on action for humanitarian issues, including slavery. “There is a great energy across sectors to tackle the issue and Australia is ready for participation,” she said. “Businesses already have an internationally recognized responsibility to respect all human rights. For businesses that are advanced and genuinely engaged on the issue, a transparency requirement is not an additional burden for them. For those that are behind, it is a good motivator ... To legislate this is a good thing, and not necessarily an additional burden on business.”

Currently, Cope explained, there are a lot of businesses investing time and effort into analyzing their supply chains. “But there are also a lot of laggards and a lot of businesses that aren’t necessarily understanding and responding to risks and issues.” Discussions from businesses believe legislation could create a level playing field.

Other business discussions include the best approach to supply chain transparency. “Should this be influenced by the U.K. or should it be a due diligence approach, influenced by French legislation that came into force earlier this year?” Cope asked. “U.K. legislation is not prescriptive on what a statement should contain. There has been discussion as to whether Australian legislation should be prescriptive and clear on what it should contain and where [it] is applies. On the flipside, if it is too prescriptive it can become a tickbox exercise for some companies. But you want companies to go through a proper due diligence process. Different views are being expressed and it is leading to good discussion.”

Lessons from Rio Tinto

Rio Tinto recently put out their modern slavery statement, linked to U.K. legislation. And Zimmerman explained it was a positive experience for the company. “From Rio’s point of view, we’ve recognized that slavery is a human rights issue and there are core operational, reputational and economic consequences to not getting this right.”

The statement took the company a lot of time, effort and resources. But that was an important part of the process. “It does take time to prepare a modern slavery statement — and it should,” Zimmerman said. “If it doesn’t take time you’re not looking into the steps your company is taking well enough. It is an opportunity to look at gaps and how you are tracking. The benefits are that it helps with risk management.”

Rio Tinto revised their supplier code of conduct, placing strong expectations around their rejection of slavery and forced labor with expected action of suppliers. Internally, staff are expected to “know their supplier,” and conduct appropriate checks as part of the engagement or renewal processes to look for a range of potential issues including modern slavery.

“We wrote our modern slavery statement and survived,” Zimmerman explained. “It was a good process for us to go through and helped us to identify some of the issues we wanted to continue working on internally.”

Beyond the inquiry

Two new announcements from Forrest will take the fight of businesses against modern slavery beyond a government inquiry.

“A very unique partnership has been formed, which will be of extreme interest to the global business sector,” he told Devex. The Walk Free Foundation and the International Labour Organization are set to develop a joint, agreed measurement on numbers of people held in modern slavery to be captured in time for the convening of the United Nations in New York this September. It will be a combination of known research and Gallup polls conducted within countries.

“The gaps and differences between reported numbers means that certain chief executives have been able to question slavery,” Forrest said, explaining that all businesses will be provided with the numbers to help understand issues within supply chains, and for conversations with governments. “It’s an exciting initiative because in the world of business, if you can’t measure it, it doesn’t exist.”

But his second initiative will see strong direct push from business on government through the Bali Process, a forum consisting of 45 member countries working on issues such as people smuggling and trafficking and co-chaired by Indonesia and Australia.

Deloitte will be leading engagement with country leaders on behalf of businesses to push for stronger and faster action on modern slavery. And the results will be discussed at a joint forum between government and businesses in Perth on August 23.

A call for action

Submissions to the Australian government inquiry close on April 28 for organizations from Australia, and May 19 for international submissions. As of April 13, only five submissions have been published and government, NGOs and the business sector are calling on Australians to be vocal in their support for action.

“There is not one actor that can fix this problem,” Cope said “Everyone has a role to play. Through this inquiry, I want to see them get together the various stakeholder groups and see how here can be collaboration and information sharing.”

An interim report from the inquiry is expected in August, with a final report due in December that will be watched closely from groups with a stake in seeing direct and swift action.

“This is the most pressing global human issue,” Forrest said. “A population, twice the size of Australia, is trapped in modern slavery.”

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