Social licence is key to New Zealand business survival

By Marrit Mulder

A number of New Zealand based organisations will be affected by the impending Australian Modern Slavery Act. Are you one of them? The proposed Act is likely to be passed in 2018 and will apply to organisations with over A$100 million revenues in Australia, regardless of where they are based. Your organisation may be required to provide a public report on how you identify and combat modern slavery problems in your operations as well as in your supply chain.

Deloitte’s 2018 report on State of CSR in Australia and New Zealand   highlights that there is significant opportunity to demonstrate that New Zealand wants to be a leader in mitigating modern slavery practices. First steps for businesses are to understand their business profile and define whether the modern slavery act applies to them.

What is Modern Slavery?

Modern Slavery is often defined [1] as a broad umbrella term and is used to describe a number of crimes, including human trafficking, forced labour, sexual slavery, child labour, domestic servitude, bonded labour and slavery.

Many business leaders are surprised to think there may be modern slavery in their businesses, but there are an estimated 40 million victims of modern slavery globally [2]. Up to two thirds are in the Asia Pacific region, where many New Zealand supply chains extend.

While it may be tempting to think that Modern Slavery only occurs in your global supply chain, we have seen instances where it sits on our doorstep. Exploitation has been associated with the construction, dairy, horticulture and hospitality sectors in New Zealand [3].

Why a Modern Slavery Bill?

By requiring organisations to be transparent about the extent to which they rely on vulnerable and exploited workers, the Government hopes to reduce modern slavery practices in supply chains.

What do organisations need to do?

Businesses will need to understand the requirements of the imminent Modern Slavery Act, which expects businesses to report on their measures for the prevention, mitigation and, where appropriate, remediation of modern slavery practices, as early as 2020.

So what can you do right now to get your organisation ready for the Modern Slavery Act:

1.    Conduct a modern slavery assessment

Map your operations and supply chain to identify your risk of exposure to modern slavery. Analyse spend volume, product categories and location with data analytics to screen for hot spots and risk prioritisations.

2.    Commit

Build internal buy-in with senior management, raise awareness and socialise the issue. Ensure responsibilities to manage modern slavery risks are clear.

3.    Develop

Develop your modern slavery framework based on the risk prioritisation, including policies, procedures, supplier code of conducts and contracts, training material and grievance mechanisms. For example, a Supplier Code of Conduct could encompass:

• Respect for human rights
• Voluntary employment (no modern slavery)
• Working conditions
• Wages and benefits
• Right to collective bargaining
• Appropriate training
• Health and safety
• Humane treatment
• Non-discrimination

4.    Engage and Implement

Adapt existing management systems to operationalise policies. Engage with employees and the supply chain to articulate your company’s approach to prevent, identify and mitigate modern slavery issues and what it expects of employees and supply chain members.

Take steps to prevent, mitigate or remedy potential and actual modern slavery from occurring, including assessing suppliers’ likelihood of modern slavery and current abilities to remediate.

5.    Monitor, respond and report

Track suppliers’ performance against policies on modern slavery. Deal with issues and concerns. Continuously evaluate and improve your modern slavery framework. Provide internal and external reporting on performance against goals.

Many organisations have started to act now to prepare themselves. For further information speak to Aloysius Teh or Marrit Mulder.

Download the State of CSR report here. 

Marrit  is a Manager in the Risk Advisory practice, working with businesses to strengthen their governance, risk and compliance frameworks. She is passionate about business and human rights and stamping out modern slavery. Through this she is a content expert, helps organisations making it practical, raising awareness and connecting people.

[1] https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Foreign_Affairs_Defence_and_Trade/ModernSlavery/Interim_Report/section?id=committees%2Freportjnt%2F024092%2F24920

[2] https://www.globalslaveryindex.org/2018/findings/highlights/

[3] https://www.auckland.ac.nz/en/about/news-events-and-notices/news/news-2016/12/worker-exploitation-widespread-study.html