The legal and practical side of modern slavery: Zoic and Bartier Perry joint seminar

The NSW Government might still question the need of the NSW Modern Slavery Act, but in the Australian business and human rights community there is a growing momentum for articulating the relationship between business’ supply chains and operations, and their embedded negative human rights impacts. And while there is a rising number of guidelines and human rights due diligence tools, there is still a gap between their applicability to address the legal requirements, and the assurance these tools provide to eliminate modern slavery in a company’s supply chain.

As a response to these concerns, Zoic and Bartier Perry joined forces to present a seminar on 14 November 2019. This presentation was born out of a recognition that businesses are increasingly seeking to comply with the Modern Slavery Act (MSA) and responsible sourcing principles, while trying to avoid duplication in efforts with the use of overlapping approaches.

Jason Sprague (Bartier Perry) focused on the legal face of the Commonwealth MSA and its compliance, the requirements and strategies for fulfilling them, as well as its impacts and consequences for breaching the Act.

Carsten Primdal (Zoic) shared his experience in China and Asia to explain how to understand, measure and report on what happens in the supply chain, as well as when traditional human rights due diligence might be insufficient. He used anecdotes and short video clips from factories in Asia to highlight his key points and provided practicals tips to improve compliance of supply chains with human rights principles.

These two narratives noted that for doing business with integrity, businesses need to tackle gaps in their operating methods and set up accurate changes optimise their social footprint. These changes must address the critical modern slavery risks and social issues both direct and indirect, and both upstream and downstream of their operations. The extent of actions to address modern slavery risks in a company vary according to where the company is [in the modern slavery “journey”]; some might start with policies, codes and contracts, others focus on developing their remediation approach, others intensify the role of audits in their supply chain. Regardless of the actions taken, businesses must consider how any changes are embedded into their processes, how internal and external stakeholders actually understand them and how they integrate these changes into their human rights due diligence.

As 2019 comes to an end, the MSA has reminded us that businesses face strategic but critical challenges: the changing expectations from society of business’ role beyond profit, and the need for businesses to craft a strategy that responds to the impacts of their operations which is quickly reshaping their competitive environment. In this context, Carsten reminded us of three essential and interconnected messages; 1) within the human rights due diligence- a risk based approach it is essential for businesses to address modern slavery, 2) despite the complexity of supply chains the focus should be on people and the harm to people, and finally, 3) to look deeper: while things might appear ‘acceptable’ on the surface, it is important to be aware of potential flags that indicate we should look deeper into our supply chains.

Zoic and Bartier Perry aim for this presentation to have tangible impacts that generate social value.

Women in Procurement – Modern Slavery Panel

On 1 May I am sitting on a panel on Modern Slavery at a conference in Sydney.

The Conference is Women in Procurement, co-organised by CIPS Australasia, and the purpose is to advance and empower women in procurement, while sharing best in class knowledge. As a female entrepreneur and business owner delivering sustainable supply chain services, there are a number of reasons why I am very pleased to be on this panel.

Promoting women and gender equality while being able to help reduce the abhorrent practice of Modern Slavery, is at the pinnacle of the hierarchy of reasons, but being sought out to voice my ideas also gives us the chance to showcase the esteem in which our team at Zoic is held and what we have to contribute in this respect.

Specifically I am proud that we have a team with on the ground experience in the supply chain, working with hundreds of factories in at-risk countries, remediating cases of child and bonded labour, which means that in addition to desk research we also know what works in practice.

Our team has translated strategies into real life actions, resulting in true improvements for businesses and the people working in the supply chain. Our team has experience in delivering large projects in China, Asia, Europe and North America, putting boots on the ground and getting the results.

So why me, you may ask? Well, the easy answer is that they asked me, the more profound is the work we do and that our team has substance.

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Modern Slavery Bill (Cth) through parliment – by Kylie Lloyd and Andrea Herrera

Australia’s Modern Slavery Bill 2018 (Cth) finally made its way through Parliament. The Bill was passed by both Houses on 29 November 2018 after the House of Representatives approved the amendments raised in the Senate, which will give the responsible Minister additional powers to request an explanation or remedial actions to companies that fail to report.

The Modern Slavery Bill 2018 (Cth) constitutes an annual reporting requirement for companies with an annual consolidated revenue of $100 million or more and other Australian entities to publicly report on the slavery risks in their supply chains. While this requirement is mandatory for entities with revenues above the threshold, organisations with smaller revenues can join the scheme and provide voluntarily statements.

Reporting entities must provide an annual statement within 6 months of the end of their financial year to the Minister for Home Affairs. The statements, which will be made publicly available in an online register, will require the approval of the entity’s principal governing and the signature of a responsible member of the entity.

What will be required to include in a Modern Slavery Statement?

The statement will be required to include information on the organisation’s structure, potential modern slavery risks in their operations and supply chains, actions taken to determine and address the risks recognised, and the process to evaluate the effectiveness of those actions. Specifically, it must include the following:

  1. Identify the reporting entity
  2. Describe
    • the structure, operations and supply chains of the entity;
    • the risks of modern slavery practices in the operations and supply chains of the reporting entity and any entities it owns or controls;
    • the actions that the reporting entity and any entities it owns or controls have taken to assess and address the risks identified, including due diligence and remediation processes;
    • How the entity assesses the effectiveness of those actions;
    • The consultation process with any entities the reporting entity owns or controls
  3. Any other information that the reporting entity or the entity giving the statement considers relevant

The Bill was first introduced in June 28 2018, when the Australian Government put on notice Australia’s largest corporations, signalling the commencement of reporting requirements that will encourage greater transparency along the lengths of the supply chain.

Once the Bill receives Royal Assent from the Governor-General, becomes an Act and come into force, is expected that reporting entities will be required to provide their statements to the Minister within six months of the end of the 2019-2020 Australian financial year. Organisations with an international financial year will need to report within six months of their year-end.

NSW reporting regime

In parallel, NSW has already a modern slavery reporting requirement. It became the first Australian jurisdiction to enact this requirement in June 2018, however the Modern Slavery Act 2018 (NSW) is pending proclamation and regulation before commencement. After the Commonwealth Bill is enacted, there will be two reporting regimes in Australia, Commonwealth and NSW.

The NSW Act requires commercial organisations with employees in NSW and an annual turnover of $50 million to publish annual modern slavery statements. Differently to the Commonwealth Bill, the NSW Act delivers a range of penalties of up to 10,000 penalty units, for organisations that fail to prepare or publish a compliant modern slavery statement or knowingly provide false and misleading information in a statement.

Although the regulations on the NSW Act are yet to be publicly accessible to determine the specific information which organisation will be required to report, is presumed that NSW will accept that the Commonwealth reporting regime is comparable to its own. Nevertheless, it has been stated that the NSW Government desires to harmonise its reporting framework with the Federal reporting regime to prevent duplicating administrative tasks and ensure the reporting obligations will not overlap with the Commonwealth regulations.

Companies that perform well to these requirements, will establish their differentiation in the market when compared to their competition.

 

 

Zoic is currently providing advice in NSW to organisations to meet these reporting requirements. Contact ask@zoic.com.au to discuss how modern slavery legislation may impact your business.

NSW Modern Slavery Bill – a moment in history

There we have it, yesterday, 21 June 2018, the NSW Parliament passed the Modern Slavery Bill 2018. The first in the nation. The passage of the Bill demonstrates the State’s strong commitment to ensuring that modern slavery does not play a part in NSW, and overseas.

While the Bill introduces new offences for cybersex trafficking, forced marriages of children and other slavery-like conduct, the Bill also seeks to achieve supply chain transparency by requiring commercial organisations with turnovers of more than $50 million to prepare an annual public modern slavery statement, with penalties for non-compliance.  As part of this Bill government agency procurement will be required to report on the effectiveness of due diligence processes in ensuring that the procurement of goods and services by government agencies are not the product of modern slavery.

Small medium enterprises are given an 18month grace period to comply with the Bill.

The Modern Slavery Bill provides for the appointment of an independent Anti-slavery Commissioner, with responsibilities that include supply chain risk monitoring and advice, the development of codes of practice, and broader community awareness-raising. One of the Commissioner’s roles will include maintaining a freely-available public register which records whether organisations have disclosed that their goods or services are potential products of supply chains involving modern slavery (including whether any remedial steps have been taken).

The Bill contains provisions for courts to make orders prohibiting certain conduct. Contravention of an order, without reasonable excuse, is an offence attracting pecuniary penalties and/or imprisonment.

The bottom line for companies and service providers in NSW – whether you are impacted by the threshold level or are a supplier to government (in this case, including local government) – you will be required to report on your modern slavery management activities. Failure to do so could result, in penalties or damage to brand and reputation.

The implication for companies will grow as the Government contemplates a Commonwealth Modern Slavery Bill, due to be presented to Parliament soon.

Zoic has been involved in the development of human rights management frameworks in Asia Pacific, and are currently providing advice in NSW in developing modern slavery management programmes. Contact ask@zoic.com.au for more details on our capabilities.