In this exclusive article for PASA, Fiona David, Founder of Fair Futures, delves into the three key steps procurement leaders can take to ensure more effective and meaningful modern slavery risk management.
For busy and overstretched procurement professionals, knowing that your team has responsibility for detecting exploitation and coercion of workers in complex, globally interconnected supply chains can feel like an overwhelming burden.
After all, we hear constantly that modern slavery is a “hidden crime”. If police have trouble detecting this crime, how on earth are procurement teams meant to find it?
Fortunately, there are some relatively simple steps that procurement leaders can take to clarify expectations internally, make the case for additional resources and make it much easier for their teams to work.
Let’s be clear. I don’t mean ‘easier’ in the sense that modern slavery risk management will take ‘no effort’. Risk management involves work and resources. However, the work will become much ‘easier’ if you are able to build internal commitment, secure the resources you need, and help your team understand what they need to do and how to do it well.
A critical part of your leadership involves securing the resources you need to succeed, while preparing your team and your organisation for the future.
Building your organisation’s capacity to manage modern slavery risk will likely become even more important in coming years, especially given the push locally to reform and strengthen the Modern Slavery Act reporting regime. If your business has links to the European Union, the EU Forced Labour Regulation and Batteries Regulation will likely already have implications for your team.
Humanising the issue
In a world of commercial pressures and KPIs, it can be all too easy to lose sight of the reality of what sits behind terms like “modern slavery”. It is important to get behind the labels and help your organisation and your team members see the reality of the situations we are talking about here.
People who are subjected to the exploitation and coercion involved in modern slavery probably started off just like you and me, wanting to earn a living to support themselves and their families. They might move within their country or even overseas to pursue opportunities for higher paid work or an education that they can’t get close to home.
It is through this process that criminals take advantage of their unfamiliarity with systems, or their lack of family or social protection. These criminals will use a variety of tactics like threats, force and coercion, including physical and sexual violence, to get people to work while their earnings are being controlled and stolen.
Humanising and putting a face to the issue is what drives corporate commitment. There are many ways to achieve this, such as bringing in expert speakers, holding high-quality training that uses case studies and scenarios or engaging with survivor-leaders. While this has to be done respectfully, people who have survived modern slavery have shared their stories of recovery and the challenges they have faced along the way.
Making the business case for resources
Given the endless jargon in this space, it’s little wonder that procurement professionals can sometimes be confused as to exactly what it is they are being asked to do with modern slavery risk management.
So it follows that your executive leaders, who may only think about this issue once a year when they get the annual Modern Slavery Act statement to sign off, may have a relatively limited understanding of what it takes to get on top of modern slavery risk.
When trying to explain what’s involved in modern slavery risk management, analogies can be extremely helpful. For example, drawing parallels between safety risk management and modern slavery risk management is incredibly effective.
Like safety, modern slavery risk management is about preventing catastrophic harm to people’s lives. And, just as safety risk management is not as simple as trying to catch every person who falls off a ladder, modern slavery risk management is not as simple as telling people to “find slavery cases”. Instead, the objective is to genuinely understand what the risk factors are in the environment, so that you can put the right systemic and structural frameworks in place to:
- Help prevent or reduce these risks from actually happening
- Help the many people in your value-chain who are there on the ground help you to spot and respond to risks in real time
- Have a process in place for when risks are realised, so that people who have been hurt can be supported to recover while accessing justice, and so that lessons can be learnt to ensure that accidents do not happen twice
Likewise, modern slavery risk management requires proper resourcing. It starts with a thorough risk assessment which, far from being a waste of time, is all about ensuring you allocate scarce resources where they are most needed.
Risk assessment should then inform considered and continuing due diligence, which will likely involve a mix of supplier engagement and possibly supplier training, and active contract management including site visits.
The effectiveness of these efforts will depend on real-time information about risk flowing from effective grievance mechanisms. Like safety, modern slavery risk management requires having processes in place to respond (“remediation”) when things go wrong.
Again, just like safety, how businesses “walk the walk” on modern slavery risk management speaks volumes about their culture and commitment to their corporate values. From an executive perspective, the strength and seriousness of modern slavery risk management is directly connected to the organisation’s reputation, brand and trust.
In Australia today, exposure to modern slavery in supply chains is not a theoretical risk. Recent reporting has shown that Australian entities are importing thousands of orders from Chinese companies with alleged links to forced Uyghur labour.
As several NSW government entities learnt the hard way, it is far better for procurement teams to be on the front foot with this risk than for their organisation to be on the front page of the news.
Preparing for the future
At present, Australia’s Modern Slavery Act requires large companies to report on various aspects of modern slavery risk management, including their due diligence efforts. The only guidance on what due diligence is understood to mean is included in non-binding guidance.
A recent review of the Modern Slavery Act recommended amending the Act to introduce a proactive obligation on companies to implement a modern slavery due diligence system.
The Albanese Government agreed to undertake consultations to identify how the Modern Slavery Act could be amended to enhance its due diligence requirements. This will include consideration of global regulatory developments, which will include the introduction of frameworks like Europe’s Corporate Sustainability Due Diligence Directive, the EU Forced Labour Import Ban and the EU Batteries Directive.
When you consider the trend towards increasing codification of previously vague sustainability reporting obligations through mechanisms such as the Australian Accounting Standards Board Reporting Standard on Climate-Related Disclosures, the direction of travel seems pretty clear.
As various investor and superannuation groups noted in consultation on the Modern Slavery Act review, any due diligence obligation that is introduced will need to be carefully scoped, so that it is both useful and realistic.
This means ensuring that due diligence processes are proportional to the size, complexity and resources available to an entity, and importantly, focus on the most likely and severe risks that are in closest proximity to the business’s supply chains and operations.
While the prospect of increasing obligations may sound daunting, it is also an opportunity to make the case internally for appropriate resourcing, and to organise your due diligence efforts in ways that align with the international standards that will likely influence reform in Australia.
As a procurement leader, you can start drawing on existing tools like the OECD Due Diligence Guidance for Responsible Business Conduct, to help shape how your organisation and your team understands due diligence in the modern slavery context. Not only will this give your teams greater certainty over expectations, you will be positioning your team to be ready for the likely next phase of reform in Australia.
As noted above, while modern slavery risk management will always involve work, it can also be made easier.
Through growing insight internally about the reality of how modern slavery impacts people, and drawing analogies between modern slavery risk and existing business processes that are well understood, you will increase your prospect of securing the resources you need to institute effective modern slavery risk management.
Implement these steps and you may find modern slavery risk management becomes some of the most meaningful work you will ever do as a procurement leader.
Please reach out if you need guidance by contacting Fair Futures.
About Fiona
Fiona David is the founder of Fair Futures. For close to three decades, Fiona has championed anti-slavery progress, making a name for herself nationally and internationally as a leading expert in high-impact policy reform and systemic societal change.
Having led the creation of the landmark Global Slavery Index, Fiona’s grasp of key data and critical insights has made her one of the most sought-after advisors to governments, businesses and high profile organisations alike.
Fiona takes an evidence-based policy approach which has served her well in her effort to influence law reforms in Australia and abroad. Her previous role as Research Chair of the Minderoo Foundation resulted in scaled investment in research excellence linked to impact by $28.5 million.
Fiona has led the drafting of United Nations model laws on transnational organised crime and migrant smuggling, and has conducted extensive research and training on these issues in crime hot-spots globally.
Drawing on her vast experience which spans from her early work as a human rights lawyer fighting against the commercial sexual exploitation of children, to building programs to prevent migrant smuggling backed by Sweden, Italy and the US, Fiona is the go-to adviser to governments, leading philanthropists, business leaders and humanitarian organisations.
Her role in building Walk Free, one of the world’s most powerful and active anti-slavery organisations, showcases her ability to mobilise everyday citizens, businesses, organisations, faith-based groups and political actors to take action against modern slavery.
