Modern slavery and the long race to the top

As Australia’s Modern Slavery Bill makes its way through Parliament, the property industry’s leaders are collaborating on a new platform to help stamp out human rights abuses in our supply chains.

In June, the Australian Government put the nation’s largest companies on notice, signalling the start of reporting requirements that will encourage greater transparency along the length of our complex and often opaque supply chains.

Once passed, the Modern Slavery Act will require more than 3,000 large companies based or operating in Australia to report annually on the risks of modern slavery in their operations and supply chains, and to demonstrate the actions they are taking to address those risks.

Companies with annual revenues of more than $100 million will be required to submit a modern slavery statement each year, which will be published online.

The Australian Government will also be required to release its own annual statement on modern slavery risks in Commonwealth procurement.

The Property Council welcomes the legislation. “We want to establish a ‘race to the top’ and support businesses that find and remediate rather than conceal instances of slavery,” says Property Council’s policy manager for sustainability and regulatory affairs, Francesca Muskovic.

Muskovic says the property industry is well placed to lead Australia’s efforts.

“Our industry is a proven adopter of best practice and has a long-held culture of collaboration.

“But we are on the start of a very long journey. It will take years and years for companies to unpick their supply chains and build a comprehensive understanding of where their products and raw materials come from. It doesn’t happen overnight,” Muskovic warns.

 

Stepping up supply chain scrutiny

Heather Moore, the Salvation Army’s national policy and advocacy coordinator, has spent the last 15 years vocally campaigning to end slavery and trafficking.

She expects the legislation will change the way business operates, and many companies are in for some serious shocks.

“People will be shocked, because no one has been talking about this. The government statistics on slavery and trafficking aren’t a reflection of the potential scale of the problem in domestic supply chains,” Moore says.

“The latest Global Slavery Index estimates that 15,000 people are held in slavery-like conditions in Australia at any given time. Even if this number is on the high end – and it does include forced marriage – that is grossly disparate from the government’s statistics.

Moore says Australia’s current anti-slavery and trafficking laws, while robust, have been poorly implemented, with just 22 convictions and less than 400 people referred to government support programs for victims.

“Not a single conviction has related to construction. But I challenge any company that says: ‘we have rigorous processes in place and we haven’t found anything’. If you had rigorous processes in place, you would have found it,” Moore says.

“There has also been no public education on modern slavery and how it’s different to historical notions of slavery. People don’t believe it’s actually happening in Australia.”

The prospect of supply chain scrutiny is a daunting one, and Moore says the “rabbit hole metaphor” is apt. In a complex value chain like property, supply chain scrutiny encompasses everything from construction labour and materials through to cleaning and security contracts and the operations of building tenants.

But she doesn’t want to discourage companies from taking action. “It is daunting – but it’s manageable. It will be a race to the top – but we aren’t talking about a sprint. We are talking about a long race.”

 

More than a piece of paper

Robin Mellon, chief executive officer of Australia’s Supply Chain Sustainability School, has spent the last couple of years educating the construction industry on emerging supply chain risks.

“Our supply chains are being radically transformed by demands for greater transparency and accountability, and modern slavery is one of the most visible embodiments of that,” he says, adding that other trends, from blockchain and technology to the traceability of carbon, will also drive change.

“Having a human rights policy or supplier code of conduct won’t be good enough anymore. A piece of paper saying you ‘respect and support the rights of others’ just won’t cut it.

“A lot of businesses and supply chains may unknowingly depend on slavery or poor conditions to be profitable; they may not have a business model unless people are working in these circumstances. If you can buy steel offshore at a lot less than the price you can in Australia, then could it be because people aren’t getting paid or are in terrible conditions?” he asks.

According to the Walk Free Foundation, a non-profit established by Andrew ‘Twiggy’ Forrest, more than 40 million people are currently caught in some form of modern slavery, and two thirds of these people live in the Asia-Pacific.

“This means modern slavery is very much connected to Australian companies,” says Walk Free Foundation’s strategic policy manager Shaeron Yapp.

Modern slavery is a “complex but interrelated spectrum”, Yapp adds. At one end are the very worst forms of forced, child and bonded labour. On the other end are indicators that lead to slavery – underpayment or withholding of wages, confiscating passports or forcing people into squalid living conditions, for example.

“It’s a natural response to feel overwhelmed by the scale of the problem. We are talking about millions and millions of victims.”

In May the Chartered Institute of Procurement and Supply found that 20 per cent of organisations had not taken any measures to ensure a slavery-free supply chain, but 80 per cent said the reputational risk was the greatest motivator to address the issue.

Yapp says the legislation is not about “naming and shaming companies”.

“Everyone is affected by this. No company is free of slavery in its operations and supply chains. And if it affects you, it’s likely to affect your competitors. Collaboration is the key.”

Yapp says the industry must treat modern slavery as a “pre-competitive issue” – something supported by the property industry’s leaders.

 

Join the long race to the top

“This is a non-compete space,” says Davina Rooney (pictured), chair of the Property Council’s National Sustainability Roundtable and Stockland’s general manager of sustainability and corporate procurement.

A founding member of the Supply Chain Sustainability School, Stockland has promoted human rights through policies and programs for a number of years.

“We are aware of how hard this issue will be to tackle so it is critical that we work together as an industry, rather than take a fragmented approach,” Rooney explains.

Led by the Property Council’s National Sustainability Roundtable, 13 of the industry’s leading companies are coming together to co-create and road test a common questionnaire and online platform that would provide a consistent framework for reporting and reduce the reporting burden for suppliers. The framework will be piloted by the 13 companies, with the intention of opening it to the entire property industry to use and share information.

“We can’t create something that is great for consultants but doesn’t change anything for people potentially impacted at the end of the supply chains,” Rooney says.

While the Bill makes its way through Parliament, the Salvation Army’s Heather Moore encourages companies to start conversations now to seize the opportunities while managing the risks.

“Most Australians have an abstract and hyperbolic concept of modern slavery. From what I can see in property and construction, people have a more realistic perception of the potential risk around domestic supply chains. And this is an area where your industry could really lead.

“Don’t wait for this legislation. Start talking to your suppliers because this is the way of the future. Investors want it. Customers want it. Join the long race to the top.”

Francesca Muskovic will be appearing before the Parliamentary Inquiry to represent the views of Property Council members on Thursday 2 August.