How to Tackle Modern Slavery in Supply Chains and Improve Reporting
*RECORDING, KEY HIGHLIGHTS & RESOURCES NOW AVAILABLE*
(see below)
Over 500+ people from large corporations, government, consultancies, investment managers and SME suppliers registered for givvable's webinar for businesses (recording below) on How to Tackle Modern Slavery in Supply Chains and Improve Reporting today.
In this webinar, our expert panelists Dr Stephen Morse, Nga Pham, CFA. and Megan Pepper discussed what modern slavery is, what steps organizations can take in relation to their supply chains, and how they can improve their reporting.
Topics covered included:
1) What modern slavery is and why it is important for businesses to identify all forms
2) Why it is imperative that businesses of all sizes go beyond assessing the modern slavery risk in their value chains to actively engaging and collaborating with suppliers to tackle this issue
3) Key challenges large organizations and SMEs face when addressing modern slavery, particularly in supply chains
4) The modern slavery reporting requirements and what may be on the horizon
5) How businesses – big and small – can improve their modern slavery reporting
6) Tools available to help businesses tackle modern slavery
Moderated by Frances Atkins, Director of givvable.
What next?
THOUGHT LEADERSHIP Shortly we will be releasing our thought piece on practical steps organizations can take in tackling modern slavery and improving their reporting. This will include what we can expect from the review of the Modern Slavery Act 2018 (Cth), which is expected to be tabled in Parliament in the next few months.
ASSESS YOUR SUPPLIERS Start assessing supplier sustainability with a free account on givvable's Search & Discover platform. On the platform you can set your criteria, discover suppliers with aligned attributes, create shortlists and invite suppliers to pre-validate their credentials. A 10% discount code is available to premium users that registered for the webinar.
IMPROVE YOUR DUE DILIGENCE Would you like to learn how givvable can help your organization further its sustainability objectives and understand how its suppliers are taking action in relation to protecting human rights and preventing modern slavery using AI, Big Data and Advanced Modelling? Send us an email at hello@givvable.com. You can also learn more here.
KEEP LEARNING Monash Business School is running its next Executive Education Program on Modern Slavery Reporting in August 2023. Also take advantage of tailored e-learning from Unchained Solutions: Module 1: Engaging with the Issue of Modern Slavery and Bundle of 6 Modules for Industry Professionals. Unchained Solutions is making available a 10% discount code to those that registered for the webinar. Completion of Unchained Solutions e-learning on Modern Slavery is also tracked on givvable.
Links to resources
Here are the links to the resources referred to in the webinar:
- Reports providing context on the current state of play in relation to modern slavery:
(a) Walk Free Global Slavery Index
(b) ILO, Walk Free, International Organization for Migration, Global Estimates of Modern Slavery: Forced Labour and Forced Marriage - Nga Pham, PhD., CFA, Bei Cui, PhD., Ummul Ruthbah, Ph.D, Monash University – Measuring Disclosure Quality of Modern Slavery Statements: ASX300 Companies, December 2021 (see p.11 for the Modern Slavery Disclosure scoring framework referred to in the Webinar)
- Nga Pham, PhD., CFA, Bei Cui, PhD., Ummul Ruthbah, Ph.D, Monash University – Modern Slavery Disclosure Quality Ratings: ASX 100 Companies Update 2022, October 2022 (see p.6 for the Building blocks of excellence in modern slavery reporting referred to in the Webinar)
Summary of webinar - Key highlights
WHAT IS THE STATE OF PLAY? Megan Pepper, Head of Sustainability at givvable.com, discussed the current state of modern slavery, with an estimated 50 million people in situations of modern slavery around the world, of whom 28 million are in forced labor. Women and girls and other vulnerable groups like migrant workers are disproportionately impacted. There are various events over the last five to 10 years that have heightened the risk of all forms of modern slavery. Governments around the world are strengthening their modern slavery legislation and policy, and there is a real imperative for businesses to be assessing and addressing modern slavery in their supply chains.
WHAT IS MODERN SLAVERY? During the webinar, Dr Stephen Morse, CEO of Unchained Solutions, defined modern slavery as the commodification of people for the purpose of exploitation and financial gain. He explained that modern slavery involves the removal or extreme limitation of personal choice, voice, and movement, and gave examples of indicators that could help identify cases of modern slavery, such as low pay, excessive work hours without rest, and lack of contracts. Stephen also noted that modern slavery is a complex issue that sits on a continuum, and that poverty and lack of opportunity can contribute to its occurrence. Finally, he mentioned that modern slavery takes different forms such as forced labor, servitude, human trafficking, and forced marriage.
HOW DOES MODERN SLAVERY RELATE TO ESG? Frances, Director of givvable.com, and Megan discussed the relationship between modern slavery and ESG (Environmental, Social, and Governance) issues. While modern slavery is often talked about in isolation due to the presence of the modern slavery legislation, it is important to consider it from a holistic, multidimensional perspective as it intersects with various ESG issues. Protection of human rights is the most obvious intersection. Other ESG issues that intersect with modern slavery include anti-corruption, including strong governance practices to prevent corruption and bribery, and climate change, in particular clean energy supply chains. Reports have linked modern slavery with clean energy supply chains, including for minerals mined in high-risk jurisdictions for modern slavery.
WHY IS IT IMPORTANT TO IDENTIFY ALL FORMS OF MODERN SLAVERY? Dr Nga Pham, from the Monash Centre for Financial Studies, talks about the different types of modern slavery and why it is important for businesses to identify all forms of modern slavery. She mentions that Stephen's explanation of the elements and indicators of modern slavery is useful, and that there are specific types of exploitation that fall under the umbrella of modern slavery, such as human trafficking, slavery, forced marriage, debt bondage, deceptive recruitment, and child labor in the worst form. Nga also mentions that, based on their research, one-third of the 300 largest companies in the market report forced labor as a risk in their operations and supply chains, while 22% report child labor as a risk and 16% report debt bondage and human trafficking as their key risk. She recommends that companies go beyond the umbrella term to identify specific risks relevant to their sector, as this would enable them to have a more targeted approach in their risk management, especially for small companies.
HOW CAN ORGANIZATIONS MOVE BEYOND RISK TO TAKING ACTION? Frances and Stephen discussed the need for ongoing risk assessment and collaboration with suppliers in order to tackle the issue of modern slavery in supply chains. Stephen emphasizes that data is important, and also that modern slavery due diligence involves taking active steps to explore the supply chain even further, and this requires a stakeholder-based approach. Stephen suggests that building capacity with suppliers by providing resources, expertise, and tools to help them comply will go a long way to incentivize them to work collaboratively. The conversation concludes with a discussion of some of the methods that businesses have implemented, and their relative ineffectiveness to date, to address their reporting requirements, including check-the-box, supplier assessment questionnaires and legalistic representations imposed on suppliers. They highlight how the use of modern technologies can enhance modern slavery programs.
WHAT ARE KEY CHALLENGES FACED BY ORGANIZATIONS IN ADDRESSING MODERN SLAVERY? Nga Pham discusses the key challenges faced by companies when trying to address modern slavery and how to improve the quality of modern slavery statements. She explains that one of the major issues is that companies struggle to have an updated understanding of their own operations and supply chains. Nga Pham suggests that companies need to invest in building a supplier database and have a good supplier risk assessment system in place. Engagement with suppliers is also important. When companies start to look into their own operations and supply chains, they may realize exploitative labour practices that may not be modern slavery but need to be addressed. The risk assessment output should be designed in such a way that it indicates further avenues of action. Remediation mechanisms need to be in place to provide compensation or support to victims of modern slavery. Lastly, Nga Pham emphasizes the importance of preventing modern slavery from happening in the first place. In summary, Nga stresses that organizations need to find, fix and prevent modern slavery.
WHAT ARE PRACTICAL TOOLS ORGANIZATIONS CAN IMPLEMENT? The speakers discuss practical tools organizations can use to improve their approach to addressing modern slavery in their supply chains. Megan suggests that understanding the sustainability credentials of suppliers is important and mentions givvable's platform as a tool for screening and identifying action to protect human rights and prevent modern slavery. She also lists key certifications relevant to human rights practices. Frances mentions the disclosure quality index from Monash University as another data point for assessing the quality of modern slavery statements. She also stresses the importance of collaborating with suppliers to raise awareness and improve understanding of these issues. Stephen notes that suppliers may lack the appetite or capacity to address modern slavery and highlights the importance of having a reporting mechanism and a clear ethical framework to encourage suppliers to do good.
WHAT MAY BE ON THE HORIZON FOR MODERN SLAVERY REQUIREMENTS? There is a review of the Modern Slavery Act underway that is looking at the operation of, and compliance with, the Act. The review is considering whether the seven mandatory reporting criteria are appropriate, whether the transparency framework is effective for addressing modern slavery risk – or whether more explicit due diligence steps should be spelt out, and whether the $100 million reporting threshold is appropriate. The review is also looking at whether there should be some penalties for non-compliance and whether we need to have an independent anti-slavery commissioner. The current Labor government had made some pre-election commitments in this space as well, including introducing penalties for non-compliance and an anti-slavery commissioner. It is expected that the Act will be strengthened, potentially in relation to enforcement mechanisms and the introduction of an anti-slavery commissioner.
WHAT DOES BEST PRACTICES REPORTING LOOK LIKE? Nga Pham discusses two parts of the question regarding what companies are doing for their own reporting and what is coming next. She shares a modern slavery disclosure scoring framework (see Links to Resources), which can be used as a benchmark for reporting purposes and explains the five categories of disclosure. Nga also talks about the observations made in the last two years and the increasing trend of the reports scored towards better practices in the identification of risks, independent social audits, and third-party verification of supplier responses. Finally, she mentions some recommendations from the review of the UK Modern Slavery Act, including penalties for non-compliance, exclusion from the list of potential candidates for government procurements, and director disqualification.