At the ‘Implementing Australia’s Modern Slavery Act – Know your Supply Chains’ Conference, panellist Robin Mellon, Senior Advisor at the School, delivered five insightful key messages about modern slavery risks in supply chains, using industry examples to illustrate.
(1) Focus on the people in your supply chain, not the processes
You may have a great project or procurement processes in place, but how often do you focus on the people along those supply chains? Let’s look at two quick examples.
STONE – Less than 2 years ago, a report published by two Dutch organisations revealed major human rights and labour rights violations occurring in India during the production of granite. More than 30 natural stone companies from the UK, EU, US, Canada and Australia were named in the report as sourcing products from 22 quarries, none of which had a prevention system for child labour. Given the scale of abuses outlined in the report, numerous organisations pulled a range of products – including granite benchtops – from sale over concerns their supply chains were tainted with slavery and child labour. So, was this reaction justified? Was this about reputation? Or about the people within their supply chains?
CLEANING – Two years ago a Sydney cleaning and facility management firm that had, according to the Federal Court, treated 49 vulnerable foreign workers as “slaves” by exploiting them, refusing to pay them for months, and leaving them to go without furniture, food and critical medical treatment, was fined nearly $450,000. The Fair Work Ombudsman told the court that workers, most of whom were foreign nationals on temporary visas with limited English language skills, were unlikely to have been familiar with Australian labour laws, and many, if not all, were struggling financially. Looking at these two examples, if businesses procuring granite or cleaning services had asked the right questions in the right way, how much action could have been taken to work with, and improve things for the people in their supply chains over time?
(2) ‘Risk’ should focus on the risk of harm to people, not just the probability of being found out
There’s a lot of work going on around ‘heat mapping’ and ‘hot spotting’ at the moment, using different countries or materials or environmental impacts or other criteria – but I would encourage you to keep the risk of harm to people uppermost in your minds. Page 30 of the Draft Guidelines is clear that “the concept of risk in this context means risk to people rather than risk to your entity such as reputational or financial damage.”
So, if you fight to protect your reputation first, people may suffer. If you fight to protect people, your reputation will probably be protected in the long term.
(3) Raising awareness is vital
The work of the Supply Chain Sustainability School since its launch just over 4 years ago has been around raising awareness of core economic, environmental and social issues with free sustainability learning resources. One of the biggest risks that exist in your supply chain, whether it’s around labour exploitation, materials re-use or biodiversity, is that your suppliers or sub-contractors simply don’t understand the language you’re using or the priorities you’re communicating – so raising awareness needs to take precedence. That may be a simple way of explaining the terms used. That may just be putting up posters in lunchrooms and changing rooms to ‘normalise’ the language and concepts around Modern Slavery. Or it may be through more complex online courses, which are already available for free.
(4) Don’t let complexity be a deterrent
In fact, ‘simple’ supply chains seem to be a rarity – Nestle, Apple and IKEA are examples of complex supply chains that are being addressed one step, one material, one tier, one product at a time. You can’t try to address thousands of suppliers at once, and so start small, send clear signals and look across different sectors for opportunities to improve. One of the things that worries me most is not complexity, or when people can see parts of their supply chain that concern them, but when there are opaque sections of a supply chain – areas that lack transparency and where people don’t even know how or where to look for the information. Lack of transparency is a huge hazard, especially when it comes to complex supply chains.
(5) Clauses aren’t going to be enough
Organisations across Australia are going to need to take collaborative effort, not just rely on the legal team inserting some extra paragraphs into a standard contract – and that means everyone from your Board members and the Senior Leadership Team involved with sign-off of a Modern Slavery statement to your staff members and contractors who can help identify when things are ‘not right’ – and take action. Responsibility for change should be shared, not passed on to your contractors and sub-contractors who may be least able to influence these complex supply chains and send clear signals. So don’t rely on clauses, collaborate internally and externally, use your procurement influence, and send clear signals about change.