In 2018, the Commonwealth Government passed a law which increased the transparency and accountability which is applied to large corporations with regard to modern slavery practices such as forced labour, debt bondage and deceptive recruiting.
Known as the Modern Slavery Act 2018, the new law requires organisations whose annual consolidated turnover exceeds $100 million to report annually on the risks of modern slavery in their operations and supply chains as well as actions they are taking to address these risks.
For those whose financial year finishes on June 30, the first round of modern slavery statements became due on March 31 (the original December deadline was extended by three months because of COVID). These statements related to 2019/20 – the first full financial year which passed since the legislation came into force.
During a breakout session at the Transform event held by the Green Building Council of Australia (GBCA) in late March (shortly before the reporting deadline), leaders reflected on trends in modern slavery approaches and what needs to be done.
The session was led by Lauren Zanetti, Senior Policy Officer, Business and Human Rights at the Australian Human Rights Commission. Panellists included Petie Walker, General Manager, Project Management & Direct Procurement at Stockland; Jean-Louis Haie, Director, Human Rights & Social Impact Services at KPMG; Poonam Datar, CEO of the Cleaning Accountability Framework (CAF) and Andrew Hogben, Group Procurement Manager at Mirvac.
As defined under the Act, modern slavery encompasses slavery and slavery like practices. These include servitude, forced labour, force marriage, human trafficking, debt bondage and deceptive recruiting for labour or services.
Speaking of property and construction, Haie says risks can be present across three areas.
First, there is corporate procurement such as office supplies and IT hardware. Whilst these areas are not specific to construction, risks associated within them still need to be managed.
Next, there is on-site labour in construction, maintenance and operation. Here, Haie talks of a high use of potentially vulnerable workforce populations which can include low-skilled and/or migrant workers. Adding to that, there is a prevalence of short-term flexible contracting and working arrangements which often stretch across multiple sites. In this environment, maintaining visibility to prevent exploitation can be difficult.
As noted below, these onsite challenges extend beyond construction and into areas of operation such as cleaning and security services.
Finally, there are products, materials and equipment. Here, visibility is often difficult as long and complex supply chains involve multiple locations and a wide range of products. Often, low-tier suppliers operate in high-risk countries.
Developers stress the importance of proactive approaches.
Speaking of her employer Stockland, Walker says the company is driven by its purpose and understands the need for leadership on issues of corporate responsibility. This extends beyond delivering outcomes for direct stakeholders and encompasses actions to ensure that the company has a beneficial social, economic and environmental impact for the millions of lives whom its operations touch worldwide.
Speaking of Mirvac, he says the company’s vision centres around creation of vibrant and positive urban environments and communities. As it goes about this, any areas of its supply chain which cause harm would not be congruent with this goal.
Furthermore, Hogben says Mirvac has acknowledged the potential for problems within the building supply chain along with its own ability as a large property player to influence this.
Asked what companies are doing, Haie says the new Act has been a game-changer and that many organisations are beefing up effort and investment in this area.
He says the focus of many clients whom he advises extends beyond reporting and compliance and encompasses meeting expectations of parties such as clients, investors and commercial stakeholders.
On actions thus far, Haie says there has been a focus on establishing an effective modern slavery risk management framework. Toward this end, many organisations have established human rights policies, have undergone training and education and have been undertaking risk assessment.
Companies have also started to engage with suppliers through means such as supplier codes of conduct, self- assessment questionnaires and terms and conditions.
Finally, collaboration is happening at in industry level through groups such as GBCA, the Property Council of Australia, the Infrastructure Sustainability Council of Australia and the Supply Chain Sustainability School.
Hogben says Mirvac’s action to date revolves around three areas.
First, the company set up a committee to examine where risks may lie. This includes senior staff who can impact company policy, oversee compliance and put weight behind ‘deep dives’ into specific areas.
Next, Mirvac has brought in experts with practical experience to provide training to key people.
Finally, it has undertaken assessments to identify the most important risk areas. Toward this end, it has now started to delve into depth and ‘get under the skin’ of supply chains for some key materials.
Walker, meanwhile, says Stockland in 2019/20 took a considered approach toward supplier engagement and building supplier and employee awareness. Initially, this focused on ‘Category A’ suppliers who entailed either a high degree of risk or a high proportion of company spend.
Going forward, Stockland aims to take learnings from this and broaden engagement to include all high-risk suppliers with whom it spends over $10k annually.
The company will also continue to develop in-house planning and expand the scope of a number of pilot deep-dives which it has undertaken into examining supply chain labour and environmental risks on key areas within its built form.
(During the seminar, Walker shared results of several deep dive projects. These will be described in a future article.)
Still challenges lie ahead.
Whilst efforts on supply chain consultation are encouraging, Haie says companies should go further. This involves wider supply chain engagement along with investing deeply into high-risk areas. Companies should also hold strategic conversations with partners, related entities and suppliers on modern slavey as part of selection processes.
Organisations should also use technology to drive greater visibility in the extended supply chain, Haie added.
On supplier engagement, Hogben says a challenge involves engaging not just with suppliers but with the workforce of those suppliers. This is important as workers themselves have first-hand experience of potential problems.
Until you get into ‘deep dives, meanwhile, Hogben says it can be difficult to communicate expectations about what happens when non-compliance occurs. This includes expectations around how suppliers are expected to rectify problems and the information they are expected to provide.
Getting down to this level, Hogben said, will enable Mirvac to include such details within its contracts. As things stand, the company has modern slavery clauses within supplier contracts but issues at this level are yet to be spelled out in such clauses.
When it comes to property, one area of particular risk is cleaning services.
According to Datar, cleaners are vulnerable for several reasons. They include complex supply chain structures, low barries to entry and a high proportion of temporary migrant workers whose immigration status is precarious and whose English language literacy may be low. Added to this, many workers lack social networks, knowledge of workplace rights and power to report and obtain redress when experiencing exploitation at work.
Common slavery-like practices within the cleaning industry include withholding of wages, immigration related coercion of employment, deceptive recruitment, debt bondage, confiscation of personal documents and substandard working conditions.
Datar stresses that all forms of exploitation are serious. Moreover, whilst some forms of exploitation may be less severe, their presence within a workplace serves as an indicator that more severe forms of exploitation are also likely to exist within that workplace.
On worker engagement, Datar agrees that this is critical. As the ‘eyes and ears on the ground’, workers are the best form of defence against modern slavery. Often, workers are the first to see risks forming which become something bigger when transferred up supply chain, he adds.
Nevertheless, he says the vulnerability of workers can lead to fear of speaking up amid concern of retribution.
Within the cleaning sector, Datar says parties involved include building owners, building managers, contractors and cleaners.
As the party who directly employs them, contractors can easily terminate the employment of any cleaner who speaks up (whilst permanent employees have protections under the Fair Work Act, cleaners are often employed on a casual or subcontract basis and are thus vulnerable to termination).
Those who complain to building owners and managers, meanwhile, could see their employers stripped of the cleaning contract at the next tender. This puts all cleaners who worked for that employer out of work.
To overcome this, Datar says companies must enable workers to speak up safely with the knowledge that there will be a support mechanism behind them.
For this to happen, companies must ensure that workers are:
- Confident of their ability to speak anonymously and confidentially.
- Ideally, able to speak as a collective (there is power and safety in numbers).
- Ideally, able to speak with someone from their own background
- Educated and informed about their rights to identify violations and raise them as an issue
- Informed about who to speak to and the mechanisms which are in place to deal with grievances safely and securely.
This will take time as workers are starting from a position of entrenched fear.
To help mange risk, Datar says the Cleaning Accountability Framework is an important tool.
Under this tool, companies can have their cleaning supply chains independently assessed and certified against criteria such as wages, labour rights and job security; adequate pricing and transparency of contracts; workplace health and safety; financial viability checks of cleaning contractors; worker engagement and freedom of association; and investigation and resolution of issues throughout the supply chain.
In addition to audits, CAF also engages with the supply chain to drive understanding about key aspects which are assessed and why a culture of compliance needs to be embedded.
Finally, Hogben says three things need to happen at a broader level.
Both nationally and internationally, there should be a standardised approach about how alleged instances of modern slavery are reported.
Streamlined approaches would also be beneficial for companies who undertake robust processes to ensure they do not need to needlessly duplicate previous effort.
Finally, both companies and the industry as a whole need to drive greater visibility and control in respect of supply chains.
“We need to get better at understanding the chain of custody around products,” Hogben said.
“We need these QR codes to flow though the supply chain so that you could pick up any brick and know exactly who it came from, who made it and where the raw materials came from.”