CIPS Australasia firmly believes that accountability and responsibility for inadequate or exposed supply chains sits firmly with procurement professionals
Thought slavery was dead? Think again – By Lynne Richardson
Mention the term slavery and images of men, women and children in chains spring to mind, forcibly removed from their homelands and shipped overseas to a life of servitude on a rich man’s plantation. That form of slavery was abolished in many parts of the world during the 1800s. However, slavery didn’t end then.
Today, ‘modern slavery’ is the term used for those people who are exploited or completely controlled by someone else, and are forced to work through coercion or mental or physical threat; they may be physically constrained or have restrictions placed on their freedom of movement (for example, by having their passports confiscated); they are often dehumanised and treated as a commodity, or bought and sold as ‘property’ by an ‘employer’.
‘Human trafficking’ is a term most of us will have heard of – it involves transporting, recruiting or harbouring people for the purpose of exploitation, using violence, threats or coercion.
According to international human rights organisation Anti-Slavery International, modern slavery can affect people of any age, gender or race. However, most commonly, slavery affects people and communities who are vulnerable to being taken advantage of, and is more likely to occur where the rule of law is weaker and corruption is rife. It can also happen to groups of people who are not protected by the law – migrants, for example, whose visa status is irregular, are easy to blackmail with deportation.
The International Labour Organisation (ILO) estimates that around 40.3 million people globally are in modern slavery, including 24.9 million in forced labour. Sounds like an issue that only happens overseas in developing countries, right? Wrong. In fact, no country is free from modern slavery – and it’s happening right here in New Zealand.
Slavery in Hawke’s BayIn December last year, a 64-year-old Samoan national was arrested and charged with human trafficking and slavery following a lengthy investigation by Immigration New Zealand (INZ) and New Zealand Police.
It is alleged that Viliamu Samu, a New Zealand resident, regularly brought Samoan nationals to New Zealand to work illegally for him in the horticultural industry. It is believed the alleged offending had been ongoing since the 1990s across the Hawke’s Bay region.
Allegations made by the victims include not being paid for work completed, having their passports taken, and being subjected to physical assaults and threats. The victims also allege that their movements were closely monitored and controlled by Mr Samu, and there were restrictions on both where they went and who they had contact with.
Industries most at risk from modern slavery include agriculture and horticulture, shipping and transportation, and construction
INZ assistant general manager Peter Devoy says the arrest was the result of around two years of detailed investigative work by INZ and NZ Police. “We are absolutely committed to eliminating people trafficking in New Zealand,” says Mr Devoy.
Detective Inspector Mike Foster, Eastern District Police, says it is alleged that Mr Samu recruited people in Samoa, promising them well-paid jobs. “Information collected during the joint investigation suggests that the man, who was seen as a respected member of his community in Samoa, targeted vulnerable people who had limited education and literacy.”
Shipping industry at riskAnd it’s not just orchard workers. The shipping industry has been identified as being particularly susceptible to the risk of modern slavery, given that seafarers are often from nations that have human rights, labour rights and corruption challenges. The practical limitations on effective enforcement of basic conditions onboard vessels certainly contribute to the problem.
The independent organisation for seafarers’ rights, the International Transport Workers’ Federation (ITF), has regularly expressed concern at charterers’ levels of due diligence concerning the working conditions aboard ships they charter. Government inquiries and even the law reports periodically record examples of practices having attributes of slavery, including withholding crew pay, or even crew starvation.
A 2012 inquiry by the New Zealand government found a high incidence of human rights and labour law violations by foreign-flagged chartered vessels operating in New Zealand’s exclusive economic zone (EEZ) and noted instances where local companies were required to compensate unpaid workers. As a result, foreign-flagged fishing vessels were banned from New Zealand waters; any vessels working within the EEZ now have to operate under the New Zealand flag, and therefore are subject to New Zealand’s labour and safety laws.
In March last year, the New Zealand Supreme Court allowed a group of Indonesian seafarers compensation for their unpaid wages, to be paid from the sale of a Korean-flagged sister vessel forfeited to the Crown for offences against the Fisheries Act 1996.
UK legislation a world-first
A report from EY says the UK’s Modern Slavery Act 2015 was the first of its kind in Europe, and one of the first in the world, to specifically address slavery and trafficking in the 21st century. Whilst not all sections of the act are directly applicable to business, provision 54, ‘transparency in supply chains’, impacts the corporate sector.
Provision 54 came into force on 29 October 2015 and requires commercial organisations in any sector with a global annual turnover of £36 million or more who do business in the UK to disclose (in an annual slavery and human trafficking statement) the steps they are taking to address modern slavery in their business and supply chain. If an organisation has taken no such measures, this must be disclosed. EY estimates the act will apply to over 12,000 businesses in the UK. However, there is currently no mechanism to check which companies are required to report.
The transparency requirement applies to any incorporated company or partnership (including limited liability partnerships) that carries on its business, or part of its business, in the UK. The requirement is applicable regardless of the company’s geographic location, thus the obligations also apply to overseas businesses providing goods or services within the UK.
The act requires organisations to prepare and publish a statement, rather than take any positive steps to eradicate slavery from their supply chains. However, the UK government envisages that organisations that fail to take action will face commercial pressure to do so.
Australian legislationAustralia’s Modern Slavery Act came into force on 1 January this year. As with the UK legislation, Australian businesses and other organisations with a turnover of AU$100 million or more are now required to report annually on the risks of modern slavery in their operations and supply chains, and the action they have taken to assess and address those risks, and the effectiveness of their response. To ensure high-level engagement, the statement has to be approved by the board of directors or equivalent and signed by a director.
The statements will be publicly available on a central register maintained by the Commonwealth. The Commonwealth government itself, and those of its entities that satisfy the reporting revenue threshold, will also have to prepare a statement. Around 3000 companies are expected to file a statement by the deadline of January 2020.
Andrew Forrest, founder of the Perth-based Walk Free Foundation, says the act is a major step towards stamping out slavery in Australian company supply chains. “The act will help us ensure the goods we buy are slave free. We cannot continue to allow the often-invisible victims of modern slavery to be stripped of their freedoms. The products they produce are found in the supply chains of Australian and international companies that provide the food we eat, the clothes we wear and the consumer goods we use. It is our responsibility to end this criminal abuse of human rights, and this world-class legislation will help us do that.”
The Chartered Institute of Procurement & Supply (CIPS) Australasia has also welcomed the news, having been actively involved in campaigning for the passing of the legislation. CIPS conducted a survey in May last year to explore the extent to which businesses were aware of the issue, and what guidance and support procurement professionals would need to comply with the new legislation. The research found that one in five procurement professionals had not taken any measures at all to secure their supply chains against modern slavery, and that more than half lacked the skills and confidence to tackle the issue if they found it.
Mark Lamb, CIPS general manager, Asia Pacific, says: “The act is an important step towards creating a more humane society and to help eliminate abuses in Australia’s supply chains. The risks are inherent in every organisation, large or small, public or private, and across all sectors, whether it’s tech, steel production, automotive, agriculture and seafood production, textiles or retail. The impact is not just on the individuals themselves, but businesses can be brought down by reputational damage as consumers are increasingly looking for and supporting more ethical organisations,” he notes.
“We must do all we can to ensure procurement professionals are aware, are ready and able to not only complete their statements by the deadline, but also build their skills and knowledge to ensure their suppliers are also compliant. We firmly believe that accountability and responsibility for inadequate or exposed supply chains sits firmly with procurement professionals.”
New Zealand businesses on noticeIn an address to the business community at the Mekong Club in November last year, Deputy Prime Minister and Minister of Foreign Affairs, Winston Peters, said that the NZ government is committed to eradicating modern slavery and human trafficking.
On 19 September 2017, New Zealand, along with the governments of Australia, Canada, the UK and the US, endorsed a set of four principles to combat human trafficking in global supply chains. “This includes a commitment for governments to take steps to prevent and address human trafficking in government procurement practices,” Mr Peters said.
“New Zealand is dedicated to taking firm action in line with these principles and will be doing so in conjunction with our refreshed national plan of action to prevent people trafficking, forced labour and slavery. This whole-of-government plan recognises that prevention, detection, investigation, prosecution and victim protection are all critical elements of a comprehensive approach.”
Action plansSo what can companies do to position themselves to comply with the new requirements and meet increasing stakeholder expectations? Global law firm Norton Rose Fulbright says that many businesses, regardless of where they are based, will sooner or later find themselves on a trajectory towards reporting as a result of the introduction of these modern slavery laws.
Steps to take to prepare for meeting reporting requirements (or indirectly, the expectations of customers and counterparties for their reporting) include:
- • Mapping the organisation’s structure, businesses and supply chains
- • Formulating policies in relation to modern slavery, including collating current policies, identifying gaps, adapting existing policies and formulating new policies
- • Carrying out a risk assessment – identifying those parts of the business operations and supply chains where there is a risk of modern slavery taking place
- • Assessing and managing identified risks – this may include carrying out further due diligence in the entity’s operations and supply chains, and reviewing and adapting contract terms and codes of conduct with suppliers
- • Considering and establishing processes and KPIs to monitor the effectiveness of the steps taken to ensure that modern slavery is not taking place in the business or supply chains
- • Carrying out remedial steps where modern slavery is identified
- • Developing training for staff on modern slavery risks and impacts.
Meanwhile, learn to recognise the signs of modern slavery. Within your supply chain, are there companies where workers are putting in excessive hours? Are there workers that are unable to communicate with customers, or do their employers seem quick to speak for them? Are there workers living in houses of multiple occupancy? Are you being offered a service for much less than you would expect to pay for it?
The Labour Inspectorate is the New Zealand government regulator that ensures compliance with employment standards by identifying and investigating breaches and taking enforcement action. It also works with industry and sector leadership and other key parties to strengthen the systems that underpin employment standards compliance. If you suspect modern slavery within your supply chain, contact a Labour Inspector by calling MBIE’s Labour Contact Centre.
Lynne Richardson is the editor of New Zealand Construction News and FTD - Supply Chain Management Magazine