All posts by martijn

Why do Companies Find it so Hard to Choose Between Profit and Principle?

Businesses with ties to the Xinjiang province in China find themselves at a junction.

Caught in debates concerning Uyghur people being the victim of modern slavery and genocide, they must deal with concerns expressed by Western governments and human rights groups, and an increasingly agitated Chinese Communist Party.

Some commentators have suggested that foreign companies that (in)directly profit from the systematic exploitation of Uyghurs in China must choose between profit and principle.

It seems like a straightforward question: do companies want to profit from the state-organised repression, exploitation and extermination of an ethnic minority, or do companies condemn the treatment of Uyghur people in China and deal with the backlash?

The conundrum underlying the question is as old as capitalism itself: what social costs are we willing to accept in order for companies to make a profit?

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How an Industry Known for Exploiting Workers is Cleaning Up its Act

The cleaning industry has long had a reputation for exploiting workers, as cut-throat competition delivers contracts with profit margins so thin there’s little room to pay cleaners their legal entitlements.

The Cleaning Accountability Framework, with the help of a group of business, law and IT researchers, is making inroads into what has seemed at times an intractable problem.

Dr Martijn Boersma, who lectures in industrial relations and business ethics at the University of Technology Sydney Business School, has been working with CAF and says non-compliance with labour standards has been a big issue in the cleaning industry.

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Banning Goods Produced By Uyghur Forced Labour

The Customs Amendment (Banning Goods Produced By Uyghur Forced Labour) Bill 2020 is currently under consideration by the Australian Senate Foreign Affairs, Defence and Trade Legislation Committee and a report is due by 12 May 2021.

Professor Justine Nolan and Dr Martijn Boersma have made a submission arguing that the Australian Government should:

  1. Expand the proposed Bill to prohibit the importation of all goods produced or manufactured using forced labour (regardless of their geographical origin).
  2. Consider the ability to impose fines on importers and end-buyers who import prohibit good and apply such fines for the provision of institutional support for survivors of trafficking and modern slavery.
  3. Ratify ILO Protocol of 2014 to the Forced Labour Convention, 1930 (PO29) to ensure the development of  holistic legislative framework that will sit alongside the Modern Slavery Act, and a new law that bans the importation of goods produced or manufactured using forced labour.
  4. Consider publicly disclosing which goods are prohibited from importation, as well as associated importers, manufacturers and geographical locations.

Business & Human Rights: The Days of Toothless Laws Are Coming to an End

When the UK Modern Slavery Act was introduced in 2015 and its Australian counterpart followed three years later, these pieces of legislation were heralded as ground-breaking.

Both Acts require entities that meet the annual revenue threshold to report on the risks of modern slavery in their operations and supply chains, what actions they have taken to address those risks, and what the outcomes of those efforts have been.

Crucially, the Modern Slavery Act in each country lacks hard sanctions for non-compliance and solely relies on stakeholder scrutiny and market forces for enforcement.

The UK Home Office states that “failure to comply […] may damage the reputation of the business. It will be for consumers, investors and Non-Governmental Organisations to engage and/or apply pressure where they believe a business has not taken sufficient steps”.

In Australia, Home Affairs states that non-compliance can “damage your entity’s reputation, undermine your ability to do business with other entities and damage investor confidence.”

While Australian entities are yet to report, reporting in the UK has been underwhelming. In 2017, 43 per cent of companies on the London Stock Exchange did not produce a report, nor did 42 per cent of the top 100 companies that were awarded government contracts.

It appears that many businesses in the UK had no fear of a consumer backlash for being non-compliant with the Act, even if that consumer was the government itself.

The vague threat of reputational risk thus seems insufficient to prompt action. This is corroborated by the UN Special Rapporteur on Contemporary Forms of Slavery, who commented that  “soft law’ frameworks have […] had a limited effect in ensuring corporate and state accountability”.

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“Addressing Modern Slavery” at BAD in Sydney

The full program for the 2020 Bad Sydney Crime Writers Festival, which will run in-person on 7–8 November at the State Library of NSW, has been announced.

Festival guests appearing in front of a live audience include journalists Jess Hill, Gary Jubelin, Kate McClymont and Mark Morri; novelists Tom Keneally, Garry Disher, Caroline Overington and Chris Hammer; and Jana Wendt in conversation with former NSW deputy police commissioner Nick Kaldas.

Other sessions, some of which will be live streamed, include ‘The Crime of Modern Slavery’ with Justine Nolan, Martijn Boersma and Jennifer Burn, and ‘Auschwitz in Fiction after 75 Years’ with Alan Gold, Suzanne Leal, Diane Armstrong and Michaela Kalowski. New trends in crime writing will be examined by Benjamin Stevenson, Greg Woodland and Petronella McGovern in ‘Fresh Blood, New Writing’.

See the full program. Get tickets for in-person sessions, or book tickets for live stream sessions.

The session on Modern Slavery will take place on Saturday 7 November, at 2.30pm.

The Social License to Operate: A Concept Fit-For-Purpose?

David Murray, former chair of troubled investment firm AMP, has been called out as being unfit to meet shareholder expectations of modern boards, due to what many believe are outdated views on risk and governance frameworks.

One of the points of criticism is that Murray had criticised the notion of “the social license to operate” in a campaign against including this term in the ASX Corporate Governance Guidelines.

Does David Murray have a point? Do we even know what a social license to operate entails?

While businesses are arguably being held to a higher social standard than before, it is questionable whether the social license to operate, as a concept, is fit for purpose.

In a forthcoming book chapter, I examine concepts such as the “social license to operate” as well as similar notions such as “corporate purpose” and “stakeholder capitalism”.

The research concludes that the use of these concepts is unlikely to result in structural changes to ways of doing business – and their use is more likely to uphold the status quo.

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Call for Papers: Modern Slavery and the Employment Relationship

Following the United Kingdom in 2015, Australia introduced its Modern Slavery Act in 2018. The Government produced guidance documents to recognise that modern slavery sits on a continuum of exploitation and should not be addressed in isolation. It acknowledges that there is a spectrum of abuse and that it is not always clear at what point poor working practices and lack of health and safety awareness seep into instances of human trafficking, slavery or forced labour. The overarching aim of this special issue is to examine how exactly employment relationships can deteriorate into forms of labour exploitation and modern slavery. We set out to identify the key factors contributing to this process, to determine what approaches can reduce the risk of labour abuses occurring, and to discern novel ways to remediate exploitation once identified. We aim to create a better understanding of modern slavery and the employment relationship by establishing how and why workers may move along the continuum of labour exploitation.

Timeline:

  • 25/09/2020 – Submission of abstracts to the guest editors
  • 12/10/2020 – Confirmation/acceptance of abstract and invitation to submit full paper
  • 31/01/ 2021 – Full paper submission for presentation at Symposium
  • 02/2021 – Symposium in Sydney – alternatively a virtual symposium will be held
  • 01/03/2021 – Full original papers to be submitted online to the JIR for peer review
  • 28/10/2021 – Accepted papers to be finalised/submitted online to the JIR

 

Modern Slavery Special Issue

Review of “Addressing Modern Slavery” in Journal of Industrial Relations

Modern slavery has gained attention in scholarship, legislation and media in recent years – and rightly so. As Nolan and Boersma discuss, the term ‘modern slavery’ is not unproblematic but is now commonly used to refer to several practices, including forced labour, bonded labour, trafficking, child slavery and forced marriage (pp. 7–8). The book is extremely timely and of particular interest in Australia since the introduction of the Modern Slavery Act (Cth) 2018. This Act requires large businesses and the Commonwealth government to report on risks of modern slavery in their operations and supply chains (including overseas) and steps they are taking to address them. The first reports under the Act are due in 2020.

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Melbourne Asia Review on Addressing Modern Slavery

Addressing Modern Slavery provides important insights into the complexities that perpetuate slavery in a contemporary context, long after it was officially abolished. This book confronts the dark side of development that comes with intractable, complex, multi-tiered global supply chains. In particular, it highlights that global supply chains not only link us to modern slavery, but frequently generate the preconditions necessary for modern slavery to flourish in industries such as agriculture, manufacturing and mining, which account for the majority of slaves in the world. Governments can also be complicit: while modern slavery can be connected to companies and consumers through supply chains, there are also governments that actively promote and benefit from slave labour.

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The reasoning behind conscious consumption

The Twitterverse was recently asked “Morally, is it worse to get something from Amazon, or Harvey Norman?”

The question solicited many responses: some described the character of the CEOs, others mentioned the wages and taxes paid (or not paid) by each company, while yet other Twitter users cited the labour conditions experienced by workers at these companies.

These factors may or may not influence whether you buy from Harvey Norman or Amazon, but they aren’t issues that help to answer the moral question. As a matter of fact, the question whether to buy from Harvey Norman or Amazon arguably isn’t a moral one at all.

Don’t get me wrong, I think it is important that people ask themselves questions such as these, but this specific question is a not a moral one: rather, it is an ethical question, the answer to which is informed by your values.

At the risk of sounding pedantic, let me explain.

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