ESG Focus | Jul 18 2019
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This is Part Two in a two-part story on the postponement of the NSW Modern Slavery Act, which provides a great platform to discuss one of the most emotive and interesting economic issues in environmental, social and governance investing today, and its ramifications for investors and corporations.
- Accounting for slavery in a supply chain is an extremely difficult task, but the world is increasingly focused on addressing the problem
- The current target is to remove slavery from the supply chain by 2030
- Most companies in Australia will not have to report on their efforts to eradicate slavery until the second half of 2020
By Sarah Mills
Baby steps in the first instance.
It is not surprising that the NSW legislation has been delayed. While the government cited inconsistencies with Federal legislation as one of the causes for the delay, the fact that it was pecuniary and compliance difficult would have made its implementation a nightmare for businesses.
Accounting for slavery in a supply chain is an extremely difficult task, and even those companies with extremely deep pockets would be sorely tested to be able to confidently comply with the legislation within the allocated time frame.
However, its simple passing was a flag to businesses of the kind of enforcement to come: enforcement that may include rising fines and possibly criminal sentences if necessary to achieve the end result.
Already, the Law Council and Antislavery Australia Labor and Greens are pushing for penalties and suggest it should be made a crime to fail to prevent slavery in supply chains. This sentiment is echoed globally.
If history is any guide, it would be naïve to doubt the conviction of those driving the modern anti-slavery charge. One only has to recall the American Civil War to sense the steely resolve that can be brought to bear in this issue.
The target is to remove slavery from the supply chain by 2030.
After being given a free reign for nearly three decades, corporations have received notice that they can no longer disregard the social impact of their operations.
While essentially a toothless tiger, the Federal Modern Slavery Act represents the first step towards ensuring Australia’s compliance within the global context.
Much of the Act is taken from the British Act, which was implemented in 2015, and is part of a widening global net to improve social stability.
California’s Transparency in Supply Chains Act of 2010 took affect in 2012 and several bills are being pushed onto the Washington senate – the first, dealing with agricultural goods, was knocked back earlier this year. Canada is reported to be poised to follow California’s suit.
Human trafficking and slavery is illegal in most western democracies and is becoming increasingly linked to forced labour (as opposed to sexual slavery).