[lwptoc]

Preparing Your Second Modern Slavery Statement

Slavery is often thought of as firmly in the past, yet despite its almost-universal illegality, there are believed to be over 40 million slaves across the globe today – more than in any other time In history. Here in Australia, the Modern Slavery Act make it compulsory for large companies (over $100m revenue) to take reasonable steps to prevent modern slavery in their supply chain, and file annual Modern Slavery Statements reporting on their progress. The keyword here is indeed progress, because modern slavery is by nature hidden from view, and combating the phenomenon effectively involves a nuanced, multi-year process. For companies who are (rightly) proactive about taking the “reasonable steps” in question, the first Modern Slavery Statement will reflect not only what has been done, but what needs to be done; while the second Modern Slavery Statement should demonstrate the headway your company has made towards bridging these gaps.

It’s important to note that even modern slavery statements with the most laudable policies do not necessarily translate into effective practice – for example, Nestle is currently in litigation for child labour identified in its supply chain, despite committing to abolishing this practice labour two decades ago. Intentions are not enough either to be confident that your company is fulfilling either its legal obligations, or its responsibilities as a good corporate citizen.

This article is intended to help you prepare your second modern slavery statement; if you’re still tackling putting the right strategies in place for your first modern slavery statement, head to our previous article 5 Steps Your Company Needs To Take To Help Form Its Modern Slavery Statement. Regardless of your stage in the reporting journey, we also recommend reading Why You Need A Tiered Approach To Combat Modern Slavery, which will help you to grasp the complexity of identifying key modern slavery risk factors in multitiered supply chains. These articles will assist you in setting the right foundations to initiate a robust, strategic approach to combating modern slavery.

Getting ready for Year 2 reporting

Your first annual Modern Slavery Statement sets the foundations for your efforts, but where to from there? Managing human rights in supply chains that may span many countries and be highly opaque can seem an almost-impossible proposition at first. This is why companies should take a multi-year, staged approach. In your first year, you set your framework; your second year and beyond will involve monitoring, reviewing effectiveness and pivoting accordingly.

By Year 2, you should have mapped at least your Tier 1 suppliers, and made significant efforts to address the first wave of high/medium risk suppliers, ensuring that the higher the identified risk, the higher priority. You should also have made progress towards setting up Codes of Conduct for your suppliers, and the suppliers they work with, as well as adding relevant clauses to contracts with existing and new suppliers.

 Additionally, you should be working together with key stakeholders (experts, suppliers, peers, NGOs, communities and consumers) to build capabilities over time. Not everything can be achieved over the course of a year, or even multiple years, but with proactivity your efforts will bear more and more fruit.

Your Second Modern Slavery Statement will include much that fits within the same domains as your first Statement, and you must still include the mandatory seven key components that form a Modern Slavery statement, as outlined here.

However, during this past year you have had time to take a deeper dive. You’ll be able to update the Government and the public on what you have achieved in the interim, demonstrating that you have taken reasonable steps to identify, prevent, sanction and remediate; and how effective your responses to modern slavery risks have been. Typically, this will include how far along you are in mapping the tiers of your supply chains; issues that have arisen, how they have been resolved and what has been learned and implemented.

People-centric mechanisms

You should also be covering what mechanisms you have put in place to resolve issues, and to protect the human rights of people working with your suppliers, and their suppliers in turn. While these should be suited to your industry, there may be much you can learn from what is being done in other industries: for example, in Bangladesh, workers in over a thousand supplier garment factories can report and quickly resolve workplace problems using the Amader Kotha Workplace Hotline was set up by three project partners (a civil sector organisation working with two private sector partners), which provides this service to 1.5 million workers including the Tier 1 suppliers of many leading international garment brands.

Not sure what sort of mechanisms would work best for your company and industry? Talk to external experts who are familiar with best-practice; talk to your suppliers, and talk to workers in your supply chain about what they’d like to see in place (making sure that they feel secure to speak freely about any concerns).

Mapping supply chains beyond Tier 1

Your second Modern Slavery Statement should include the efforts you have taken to understand what stage your Tier 1 suppliers are at identifying and preventing modern slavery in their own supply chain, and the steps you have taken to equip Tier 1 suppliers with these capabilities.

Combating modern slavery effectively cannot be done without a tiered approach (more on that here). Most modern slavery is found beyond Tier 1, so you and your suppliers must work together to be effective; if your Tier 1 suppliers are not taking their own reasonable steps, they shouldn’t be your supplier. Australian firms are increasingly taking action on modern slavery, with Wesfarmers recently ending relationships with 20 suppliers over these concerns.

Reporting your progress

To prepare your second Modern Slavery Statement, you should review what gaps you identified in your own capabilities in your first statement, and what steps you have taken to bridge these gaps. Some questions to consider:

• Who have you consulted over the last year?
• What tools have you used, and why?
• What due diligence and risk assessment actions have you carried out, and what do you have planned for the year(s) ahead?
• What training have you provided to relevant internal and external stakeholders (directors, employees, suppliers and so on)?
• To what extent has an understanding of modern slavery risk factors permeated your organisation – and how do you know that the training has been effective?
• What has changed since your first statement? What have you found as a result of these efforts?
• What actions did you to commit to in your first statement, and how far along have you progressed?

A Modern Slavery Strategy that gets results

Your Modern Slavery Statement must be more than just words on a page. It’s not just about avoiding business risk exposure, keeping your company out of a scandal, or keeping shareholders happy. It is a commitment towards ethical behaviour and a key part of your business strategy, informing the decisions you make as a company. It is about the people in your supply chain, and your responsibilities towards them.

For a modern slavery strategy to be effective, companies must understand that combating modern slavery is always a work in progress and are not set-and-forget. As you continue to approach this complex and multifaceted issue over the years, your expertise will grow; you will be better positioned to map and understand your supply chain and diffuse a people-centric culture where human rights are respected at all tiers. You will also gain a valuable body of knowledge that you can use to help other companies to do the right thing; after all, industries are much more able to effectively combat modern slavery when companies work together.

It’s important to accept that this takes time; your second Modern Slavery Statement will almost certainly still include areas that you wish to improve upon, and limitations to admit and address.

Forming a second Modern Slavery statement backed by robust strategy and practice can be a time-consuming process, as well as a costly one. Research from the AFR finds that only 8% of Australian companies are going beyond a basic analysis of modern slavery in their supply chain, which suggests that for many companies, putting policy into practice still remains on the too-hard shelf. Fortunately, agile tech solutions such as Informed 365 are able to provide reliable, meaningful data.

Our integrated solutions are helping companies to become more efficient by automating traditionally manual data gathering, visualisation and reporting, so your company can track, calculate, monitor, visualise and report against any data –requiring minimal input from busy or resource poor companies. We offer an end-to-end solution with our support team and onboarding assistants. With Informed 365, it’s easier and faster than ever for your company to

Want to know more about Informed 365, and how we can empower your company to put its CSR & ESG commitments into practice, delivering more robust results in less time? Explore our resources on modern slavery, ethical sourcing and supply chain management, and CSR reporting and certification, and contact us to assist with any enquiries, demo requests and suggestions.