Tag Archives: Corporate Governance

Modern Slavery Good Practice Toolkit

July 2, 2023Uncategorizedaddressing modern slavery, Australia, civil society, companies, Corporate Governance, corporate social responsibility, CSR, exploitation, forced labour, global supply chains, human rights, labour, labour standards, legislation, Martijn Boersma, modern slavery act, Supply Chainmartijn

The final instalment of a research series jointly conducted by nine academic and civil society organisations has been made publicly available. The publication, known as the Good Practice Toolkit, offers businesses crucial insights into human rights due diligence and ways to amplify their compliance with Australia’s Modern Slavery Act (MSA).

Drawing upon data collected over several years, the toolkit examines corporate responses to the MSA and their engagement in human rights due diligence. It zeroes in on two notably weak facets of business practice: stakeholder engagement and supplier relations.

The Toolkit’s main recommendations are:

Prioritise suppliers with demonstrated respect for human rights.
Work in partnership with suppliers in designing and communicating expectations.
Conduct meaningful and sustained engagement with workers and their representatives.
Engage with relevant stakeholders in the design of policies.
Use effective grievance mechanisms as an engagement tool.

The Australian Human Rights Institute (UNSW Sydney), Business and Human Rights Centre (RMIT), the University of Melbourne, the University of Notre Dame Australia, the University of Western Australia and Willamette University, in association with the Human Rights Law Centre, the Business & Human Rights Resource Centre and Baptist World Aid, conducted this research. It follows earlier reports, ‘Australia’s Modern Slavery Act: Is It Fit For Purpose?’, ‘Broken Promises’ , and ‘Paper Promises’ .

Summarised: Review of the Modern Slavery Act 2018

May 28, 2023Uncategorizedaddressing modern slavery, Australia, civil society, companies, consumers, Corporate Governance, corporate social responsibility, due diligence, exploitation, forced labour, global supply chains, human rights, Martijn Boersma, modern slavery, modern slavery act, review, trafficking, worker exploitationmartijn

Addressing modern slavery requires more than criminalising the illegal control of or mistreatment of individuals. It necessitates a comprehensive response to the various forms of modern slavery, including human trafficking, servitude, worker exploitation, child labour, forced marriage, debt bondage, and deceptive recruitment.

Australia has recognised this challenge and has implemented a range of laws, programs, networks, and support services to tackle it head-on. One key component of Australia’s response is the Modern Slavery Act 2018, which focuses on transparency reporting. This legislation mandates large businesses and entities operating in Australia to submit an annual statement to the government, outlining the actions they are taking to address modern slavery risks within their domestic and global operations and supply chains.

To promote transparency and accountability, these statements are made available to the public through the Modern Slavery Statements Register. As of early 2023, the Register has published over 7,000 statements from nearly 8,000 entities headquartered in more than 50 countries. This government-run register is the first of its kind internationally and has already garnered significant attention.

In accordance with the Modern Slavery Act, a review was initiated three years after its commencement, starting on March 31, 2022. The review aimed to assess the effectiveness of the Act in combating modern slavery and explore potential improvements to its framework and administration. It also sought to evaluate whether the law was being taken seriously and effectively implemented. Below you can find a summary of the review and recommendations, as well as the full list of recommendations made.

Continue reading Summarised: Review of the Modern Slavery Act 2018 →

New Research: Is the Australian Modern Slavery Act Fit For Purpose?

April 3, 2023Uncategorizedaddressing modern slavery, Australia, companies, Corporate Governance, corporate social responsibility, CSR, due diligence, exploitation, forced labour, global supply chains, government, human rights, human rights abuses, modern slavery, modern slavery act, remediation, Reportingmartijn

The Australian Modern Slavery Act 2018 (MSA) aims to combat modern slavery in the operations and supply chains of Australian businesses by requiring them to report on their efforts to address this issue. However, the question remains whether the Act is fit for purpose. This new report, based on data collected from a business survey and focus groups conducted in 2022 and 2023, offers new insights to inform policy change and business practices by examining the gaps between policy and practice in corporate modern slavery statements.

Effectiveness and barriers

Our investigation gathered input from respondents regarding the MSA’s effectiveness, best practices for implementing remediation measures, and potential reforms. The report presents evidence of corporate responses triggered by the MSA and stakeholders’ perceptions of its impact. Findings reveal a broad consensus that the current corporate responses to the Australian MSA are generally not benefiting victim-survivors of modern slavery. While the MSA raises awareness in the best case, it may also provide a superficial appearance of compliance for businesses that continue to depend on opaque supply chains and cheap labor without substantive commitment to addressing abuses.

Two critical issues highlighted by survey and focus group participants for improving policy and practices to address modern slavery are enhancing supplier relationships and stakeholder engagement. Respondents identified several barriers to effective remediation, including current procurement practices, low trust between suppliers and reporting entities, and inadequate resourcing by businesses for remediation efforts that would compensate and empower victim-survivors of modern slavery. Remediation is a crucial aspect of addressing modern slavery, and effective processes must prioritise risk to people over risk to business.

Remediation and potential reform

The findings also offer insights into practices that may contribute to more effective remediation of modern slavery, providing valuable lessons for government policy focus and businesses seeking to improve their approach to remedy. Survey data indicates that participants who engage key stakeholders in remediation, such as trade unions, report the most effective approaches. Other essential tools include risk management practices like supplier training and increased transparency from suppliers—practices currently utilised by Australian businesses.

Data from this report and previous research demonstrate a strong desire for MSA reform and the need to incentivise improved practices. A majority of survey respondents:

Endorse establishing an Anti-Slavery Commissioner;
Support harmonising the MSA with international standards, such as the UN Guiding Principles on Business and Human Rights (UNGPs), and emerging legislation in other countries;
Agree that mandating human rights due diligence requirements would lead to improved responses to addressing modern slavery;
Support a mix of policy measures, including sanctions and incentives (such as disqualification from government tenders, financial penalties, and director liability) to better tackle modern slavery.

There is a clear disconnect between policy and implementation when it comes to addressing modern slavery within the operations and supply chains of Australian businesses. This stems from a lack of transparency in corporate supply chains, which hinders both the detection and resolution of modern slavery issues. To effectively combat this, it is essential to prioritize enhancing supplier relationships and collaborating with key stakeholders such as trade unions. The problem can only be resolved if it is first acknowledged and understood. Gaining better insight into labor conditions in supply chains through engagement with frontline workers is a fundamental and indispensable initial measure in the battle against modern slavery.

All respondents advocated for reform of the MSA to drive company action that benefits victim-survivors of modern slavery, rather than merely promoting superficial compliance with the Act. This report, therefore, serves as a call to action for both policymakers and businesses to work together to enhance the effectiveness of the MSA and genuinely address the issue of modern slavery in corporate supply chains.

Human Rights Due Diligence: An Overview

March 28, 2023Uncategorizedcompanies, Corporate Governance, corporate social responsibility, CSR, due diligence, exploitation, forced labour, human rights, human rights abuses, regulation, worker exploitationmartijn

The purpose of this resource is to offer a comprehensive overview of global human rights due diligence legislation, including both proposed and enacted laws. Initially created for the Australian Cotton Industry, this document is also valuable for policymakers, industry professionals, civil society, and scholars interested in understanding trends in human rights due diligence, comparing legislation across countries, and estimating anticipated changes for businesses operating in Australia.

The Growing Focus on Mandatory Due Diligence

Over the past few decades, there has been heightened scrutiny on the societal impacts of businesses. International organizations have developed non-binding guidelines and recommendations since the 1970s, acknowledging companies’ responsibility to uphold human rights and implement due diligence across supply chains. However, these voluntary international agreements have fallen short in effectively safeguarding human rights within commercial supply chains. Consequently, governments have experienced increasing pressure to incorporate these guidelines into domestic legislation.

In recent years, there has been a notable increase in country-level due diligence legislation, inspired by guidelines from international organizations. Examples of such legislation include the California Transparency in Supply Chains Act 2010, the UK Modern Slavery Act 2015, the French Corporate Duty of Vigilance Law 2017, and the Australian Modern Slavery Act 2018. Our analysis highlights the rapid development of due diligence legislation, with numerous drafts currently under parliamentary discussion. Critics have voiced concerns regarding the nature of these reforms, citing lenient penalties, weak requirements, and a limited scope of businesses affected. Despite these criticisms, the growing prevalence of domestic due diligence legislation demonstrates its potential to pave the way for significant change.

Key trends in human rights due diligence legislation:

Increasing robustness: New legally binding regulatory frameworks are becoming increasingly more robust, with the expectation that mandatory due diligence across supply chains will be the end result.
Expanding expectations: There is a growing expectation for small and medium-sized businesses to incorporate aspects of due diligence, as seen in the Aotearoa New Zealand proposal and Canadian Modern Slavery Act.
Industry-specific legislation: Laws targeting specific industries have emerged, such as the New York Fashion Act and the US FABRIC Act.
Broadening scope : Some proposals extend the scope of workplace violations to include worker exploitation, as in the Aotearoa New Zealand proposal.
Legal redress for victims: Certain laws provide opportunities for victims to seek legal redress, as in the Dutch Child Labor Law.
Increased fines and penalties: Some acts impose higher fines and penalties, such as the US Uyghur Forced Labor Act and the German Act on Corporate Due Diligence.

These trends indicate a global shift towards stronger and more comprehensive human rights due diligence legislation, emphasising the importance of businesses in upholding human rights and promoting sustainability across their supply chains.

Research on Political Investorism and Market Lobbying

February 7, 2023Uncategorizedadani, carmichael, Corporate Governance, divestment, insider lobbying, market lobbying, modern slavery, outsider lobbying, political investorism, shareholder activism, super funds, superannuation funds, unnatural insidermartijn

New research out today on political investorism and insider/outsider market lobbying, which analyses shareholder activism and lobbying of market actors. We argue that political investorism in Australia is shaped by our corporate governance rules and market power of superannuation (pension) funds. We identify a category of ‘unnatural insider’ to describe the tactic of traditional outsiders acquiring insider status for political aims. Case studies analysed include market lobbying and threatened boycotts of banks/insurers over the Adani Carmichael coal mine, shareholder targeting of Coles over modern slavery, and superfund divestment campaigns.

Broken Promises: business failure on modern slavery

November 21, 2022Uncategorizedaddressing modern slavery, civil society, companies, Corporate Governance, corporate social responsibility, exploitation, forced labour, global supply chains, human rights abuses, modern slavery, modern slavery act, Reporting, transparency, worker exploitationmartijn

A new report, Broken Promises: Two years of corporate reporting under Australia’s Modern Slavery Act, examines the second year of corporate statements submitted to the Government’s Modern Slavery Register by 92 companies sourcing from four sectors with known risks of modern slavery: garments from China, rubber gloves from Malaysia, seafood from Thailand and fresh produce from Australia.

It finds that:

66% of companies reviewed (down from 77% in the first year) are still failing to comply with the basic reporting requirements mandated by the legislation, with some companies not submitting reports at all;
Over half (56%) of the commitments made by companies in the first year of reporting to improve their modern slavery response remained unfulfilled based on their second year statements;
43% of companies reviewed (down from 52% in the first year) are still failing to identify obvious modern slavery risks in their supply chains;
There is a mere 6% increase in the number of companies appearing to be taking some form of effective action to address modern slavery risks, with two in three companies still failing to act.

Seafood, rubber gloves, oranges: tainted by modern slavery?

November 21, 2022Uncategorizedaddressing modern slavery, Broken Promises, Corporate Governance, corporate social responsibility, exploitation, forced labour, global supply chains, human rights abuses, modern slavery, modern slavery actmartijn

If your clothes are made in China, rubber gloves from Malaysia and seafood sourced from Thailand, researchers are warning you may be at risk of supporting modern slavery practices.

Those were identified as the sectors with the highest risk of modern slavery in a new report, produced by a coalition of human rights organisations and academics.

And despite previous warnings of the risks to Australian companies sourcing these products, little has changed to improve the risks.

Continue reading Seafood, rubber gloves, oranges: tainted by modern slavery? →

Using Market Devices to Address Labour Abuses

September 9, 2022Uncategorizedaddressing modern slavery, civil society, cleaning, Cleaning Accountability Framework, companies, Corporate Governance, corporate social responsibility, exploitation, forced labour, labour standards, Market Devices, Supply Chain, transparency, Unions, vulnerable workers, wage theft, worker exploitationmartijn

This study examines how the risk of labour standards noncompliance can be rendered calculable and commensurable through a market device. We present a case study of the Cleaning Accountability Framework (CAF), an industry certification scheme, which seeks to address labour exploitation in the Australian contract cleaning industry. We pay particular attention to the central device of the certification scheme – the pricing schedule. We examine how the pricing schedule shaped the calculative space informing contracting parties during the procurement process. In doing so, the pricing schedule increased transparency around the potential risk of labour standards noncompliance. The nature of this transparency and the perceived objectivity of the pricing schedule acted to reshape the market for contract cleaning, resulting in a redistribution of accountability for labour exploitation. We also examine how the pricing schedule formed part of a wider framework of accountability, and how these mechanisms enabled strategic co-enforcement of labour standards compliance by supply chain stakeholders. Overall, our study indicates the potential for accounting practices to play a more active role in shaping how markets address modern slavery risks.

The Law Down Under Podcast: Modern Slavery

September 9, 2022Uncategorizedaddressing modern slavery, Corporate Governance, corporate social responsibility, exploitation, forced labour, global supply chains, human rights, labour standards, migrant workers, modern slavery act, regulation, Reporting, Supply Chain, trafficking, transparency, worker exploitation, working conditionsmartijn

UN report on China’s abuse of Uyghurs: What Should Australia Do in Reponse?

September 9, 2022Uncategorizedaddressing modern slavery, Australia, China, civil society, companies, consumers, Corporate Governance, corporate social responsibility, exploitation, forced labour, global supply chains, government, human rights, human rights abuses, modern slavery, Uyghursmartijn

For three years, Sadam Abdusalam watched his newborn grow into a toddler through the screen of a mobile phone. He was thousands of kilometres away in Australia, and his son Lufti and his wife Nadila were stuck in China’s Xinjiang province, unable to leave.

A Uyghur originally from Xinjiang, Mr Abdusalam was separated from his family for three years after the Chinese Communist Party (CCP) seized Nadila’s passport in 2017. He said the CCP began taking “as many” Uyghurs’ passports as they could in that year.

Continue reading UN report on China’s abuse of Uyghurs: What Should Australia Do in Reponse? →

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Tag Archives: Corporate Governance

Research on Political Investorism and Market Lobbying