Five ASX200 sectors are at high risk of exposure to modern slavery, according to a new report commissioned by the Australian Council of Superannuation Investors (ACSI).
The report provides practical guidance for companies and investors to assess their exposure to modern slavery and aid them in reporting under the new Modern Slavery Act 2018.
ACSI CEO Louise Davidson said, “The introduction of the Modern Slavery Act provides an opportunity for Australian business to combat these issues. Somewhere in the supply chain of most businesses, forced labour or related practices are present.”
More than 40 million people globally are living and working in slave-like conditions, according to the International Labour Organization. Of these, the 2018 Global Slavery Index estimates that 15,000 are living in
Prepared for ACSI by KPMG, the report extends on work that ACSI has previously conducted in the apparel sector, and identifies ‘financial services’, ‘mining’, ‘construction and property’, ‘food, beverages and agriculture’ and ‘healthcare’ as the other sectors most at risk of modern slavery.
The report highlights several intersecting
factors which increase the risk to companies operating in these sectors:
– vulnerable populations
– business models structured around high-risk work practices
– high-risk product and service categories, and
– high-risk geographies.
Until recently, Australian companies were not obliged to assess or address their exposure to slavery. ACSI has engaged with listed companies on labour and human rights standards for many years and campaigned actively for a modern slavery reporting requirement.
Legislation requiring businesses to report on slavery in their operations and supply chains commenced on 1 January 2019. Davidson said, “Eradicating slavery is a mainstream corporate responsibility.”
Every industry is exposed, and every company has a responsibility to act.
The new law sends a clear message that Australian businesses must
not unwittingly condone or facilitate slavery.”
Richard Boele, Head of KPMG’s Global Business and Human Rights Network, said “The ACSI Modern Slavery Report is a timely and useful guide for companies.
Right now, boards and executives need to have conversations about their strategic and practical response to the modern slavery reporting requirements.”
The report contains checklists for companies to assess their ‘modern slavery readiness’.
This is an essential step in developing their preparedness to meet the new regulatory requirements.
We will use the tools in our report to engage with Australia’s largest listed companies and evaluate how committed companies are to acknowledging and managing their exposure.
“Investors can play an important role in ending slavery. ACSI and our members consider labour conditions when forming investment recommendations and we do not want to be complicit in perpetuating slavery”, Davidson said.
“We are ready to work with companies to identify and end forced labour practices.
We will call out companies that don’t take this responsibility seriously to enable the market to make informed choices about where to invest their capital.”