Following an international conference on modern slavery: ‘Implementing Australia’s Modern Slavery Act – Know Your Supply Chains’, our team shares new insights and takeaways.
The Modern Slavery Act 2018 (Cth) has been in force for six months, and the first Modern Slavery statements will start falling due in 2019. Last week, with a view to equipping companies to comply with the Act, the Department of Home Affairs (DHA) hosted Australia’s first international conference on modern slavery: ‘Implementing Australia’s Modern Slavery Act – Know Your Supply Chains’.
MinterEllison attended the conference and over two days we heard from global experts, government representatives, business and civil society on the Modern Slavery Act 2018 (Cth), understanding your Supply Chain, how to identify and address Modern Slavery risks, preparing modern slavery statements, the UK Act and other global perspectives.
Key insights and takeaways from the conference
Further Government Guidance will be released:
- the draft guidance issued by the DHA will likely be updated before it is released in its final form and may include appendices relevant to each sector; and
- the Commonwealth Government will release a scoping note setting out how it proposes to comply with the requirement for it to make a Modern Slavery Statement.
- Risk based approach: The Act was drafted with the expectation that companies will take a risk based approach to mapping their supply chain and reporting on risks of modern slavery. While most businesses will not feasibly be able to map their whole chain top to bottom before the first statement is due, companies should start with the highest risks and aim for improvement over time.
- Educate yourself and your people: Before you start trying to map your supply chain and operations to identify risks of modern slavery, make sure you and your people know what constitutes Modern Slavery. Know what you are looking for!
- Leadership Buy-in: It is important to get 'buy in' from top executives at the start of this process and pick someone with a passion for Human Rights, and the appropriate skills and influence within the Company, to take the lead. How do you get this buy in? Call on company values and make it personal – talk about the people affected not just processes and compliance. Also, remember that the Modern Slavery Act 2018 (Cth) requires the Board to approve a Modern Slavery statement before it is submitted.
- Cross functional / multi-divisional approach: Your response to Modern Slavery should involve teams from across the business.
- Focus on people in the supply chain – not processes! Companies should think about its approach to Modern Slavery issues, and identifying Modern Slavery risks, in a broader Human Rights context. In doing so, it was recommended that companies implement the UN Guiding Principles on Business and Human Rights, which are an internationally recognised set of standards to prevent and address human rights abuses occurring in the context of businesses.
- Compliance tools and methods of oversight could include:
- supplier code of conduct;
- pre-screening of suppliers;
- contractual terms;
- planned and un-planned (ie. unannounced) audits;
- educating suppliers; and
- worker voice platforms eg. anonymous hotline and feedback apps.
But, remember no one tool is the answer.
- Having a supply policy, procedures and checklist is a must but make sure you empower your people with discretion, so that if something does not 'feel right' they raise it. Reward transparency and prevention both internally and in your supply chain.
- Use partnerships and collaboration to combat modern slavery:
- industry groups and coalitions - use your collective influence;
- consult with experts;
- engage with NGOs in Australia and on the ground in the countries where your suppliers are located; and
- work with trade unions and your suppliers to give workers a voice.
- Investors: Investors will be 'readers' of modern slavery statements. These statements will be used as part of Environmental, Social and Governance (ESG) evaluations of potential investments, and investors will not want to see a mere compliance approach. Remember that lending and investing activities are to be included in reporting entities’ ‘operations’ for purposes of their Modern Slavery Statements – investors will be required to disclose investments in their own Modern Slavery Statements and will be judged on those investments. See for example the recent article published in The Age entitled 'Banks financing 'rights abusers' in palm oil trade'.
- Interaction with the UK Act: If a Modern Slavery Statement is compliant with the Commonwealth Act the statement will be also be compliant with the UK legislation (but not the other way around).
Update on NSW Modern Slavery Act
In June 2018 the Modern Slavery Act 2018 (NSW) (NSW Act) was passed by the NSW Parliament and received royal assent. The NSW Act was originally expected to commence 1 July 2019. However, recent discussions in the NSW Legislative Council suggest that the NSW Act may not commence in its current form.
On 19 June 2019, the Minister for Public Service and Employee Relations, Aboriginal Affairs, and the Arts (the Minister) told the Legislative Council an Amendment Bill and draft regulations will be referred to the Standing Committee on Social Issues for its inquiry and report. The Minister said that, given the Commonwealth Act had been passed since the assent of the NSW Act, it was open to the Committee to determine whether some or all of the NSW Act was now unnecessary.