Increasingly, Australian companies are expected to manage and report on human rights aspects, including through a government proposed modern slavery reporting requirement. Many companies struggle to know even where to start.
This article provides an overview of how companies should respond. It centres on a human rights due diligence process that at its core is a broad-based governance and risk management approach. A big challenge is the first step: the human rights impact assessment required to know what actions to take to prevent causing, contributing to or being linked to adverse human rights impacts.
In August 2017 the Australian government, with bipartisan parliamentary support, proposed a modern slavery reporting requirement for up to 2,000 Australian companies, to be enacted in 2018.1 This follows a similar requirement that Australian companies with commercial activities in the United Kingdom already need to follow, preparing an annual ‘slavery and human trafficking statement’ approved by the board and published on the company’s website.2 It also follows the government’s co-chairing of the ‘Bali Process’, an international forum of 50 signatory countries in Asia and the Pacific focused on the prevention of modern slavery and human trafficking. Worldwide, approximately 25 million people are estimated victims of forced labour, with more than 16 million (or four per 1,000 people) in Asia and the Pacific.3 Australia’s supply chains include modern slaves, in particular within retail, agriculture and construction. It even occurs within Australia, in particular in agriculture, cleaning services and retail, with several recent high-profile retail brands being exposed.
Challenge: Preventing adverse human rights impacts
The coming reporting requirements follow on the back of other similar developments:
- Government business and human rights dialogue — the Australian government expects companies to perform human rights due diligence and takes advice from a newly created Multi-Stakeholder Advisory Group.4
- Investor and shareholder enquiries — institutional investors are increasingly focusing on labour and human rights in their engagement with companies in which they invest. For example, the Australian Council of Superannuation Investors, which collectively manages $1.6 trillion of assets, has a major focus on labour and human rights in retail supply chains in its engagement with Australian company boards.5