Australia Should Extend Modern Slavery Obligations to Public Buyers

August 7, 2017 •

By Olga Martin-Ortega, Business, Human Rights and the Environment Research Group; Claire Methven O’Brien, Danish Institute for Human Rights; and Andy Davies, London Universities Purchasing Consortium

In April 2017 we submitted written evidence on behalf of the Learning Lab to the Australian Parliament Joint Standing Committee on Foreign Affairs, Defence and Trade inquiry into establishing a Modern Slavery Act in Australia.

In particular, we recommended the inclusion of a “Transparency in Supply Chains” provision to apply to public bodies, as well as corporations, and to build upon experience, practice and research concerning the first year of implementation of Section 54 of the UK Modern Slavery Act 2015 (MSA) by UK public buyers.

This recommendation followed from an analysis undertaken during 2017 by the Business, Human Rights and the Environment Research (BHRE) Group of over 80 Slavery and Human Trafficking statements produced by UK public buyers, mostly universities.  

On the downside, this research found that few institutions to date have undertaken thorough processes of review before preparing their Modern Slavery and Human Trafficking Statements, as well as a high degree of inconsistency in the quality and content of such statements.

However, many of the reporting universities and local authorities have begun implementing specific policies relating to modern slavery in their supply chain or are trying to link their existing ethical or sustainable procurement processes to obligations under the MSA.

Additionally, the fact that MSA s54 statements need to be signed and approved by persons at the highest level of management has captured attention and highlighted the need for overall institutional commitment.

On the other hand, responsibility for drafting s54 statements has often fallen on procurement practitioners within reporting public authorities, which in many cases are neither trained in nor have the financial or personnel capacity to undertake human rights risks assessments.  Procurement departments need support and commitment from senior management to perform this task and to foster a new culture within institutions.  Developing human rights policies and drafting s54 statements that reflect them is not a one-person, or even a one-department task, but rather an institution-wide challenge.

Whilst public buyers have still then to demonstrate sufficient steps to implement human rights due diligence procedures and act on risks and potential violations, the BHRE analysis demonstrates that, on the whole, the first year of reporting under the MSA has been successful in raising awareness about the responsibility public authorities share with their suppliers for preventing and mitigating human rights abuses in global supply chains.

Our recommendations regarding the establishment of an Australian Modern Slavery Act accordingly begin by encouraging such a measure as a step towards fulfilling the country’s human rights obligations. Introducing this kind of legislation would place Australia at the forefront of the fight against modern slavery and human trafficking and confirm its commitment to the protection of human rights. We are not the only ones who think so. UNICEF’s statement also calls on the Australian government to consider this connexion between its obligations with regards to human rights, and children rights in particular, and public procurement.

If passed, we consider that such legislation should include a Transparency in Supply Chains provision that mirrors – but improves upon – Section 54 of the UK Act by extending reporting obligations to public buyers.

Governments are heavyweight purchasers within the global marketplace and therefore key players in the fight against modern slavery, human trafficking and human rights abuses in global supply chains.  While public supply chain management practice cannot and will not change overnight, it is important that a legal basis is established to promote and underpin their engagement, commitment and responsibility.

In our submission to the Australian Parliament Joint Standing Committee on Foreign Affairs, Defence and Trade inquiry we made several specific recommendations.

First, we suggested that Australia should align new Modern Slavery rules with its international responsibilities to respect, promote and protect human rights in all spheres of government activity, including when contracting for goods and services, employing due diligence reporting and transparency in the supply chain, as highlighted by the UN Guiding Principles on Business and Human Rights and other standards, such as the OECD Guidelines for Multinational Enterprises.

A Transparency in Supply Chains provision should accordingly contain prescriptive transparency requirements, rather than mere suggestions, as under the UK MSA, to guarantee consistency in reports’ quality and content.

Equally, it should be compulsory for all public bodies over a threshold size to publish an annual Slavery and Human Trafficking or equivalent statement on supply chain transparency that documents efforts to identify, prevent and mitigate risks of modern slavery in their supply chains.

However, we also suggested that relevant provisions should not be restricted to modern slavery and human trafficking but be comprehensive so as to encompass the broader range of human rights abuses which occur in global supply chains.

Furthermore, a Transparency in Supply Chains clause included in new Modern Slavery regulation should also include provisions allowing public buyers to exclude companies which fail to uphold human rights from eligibility for public contracts.

Alongside, we recommended that the Government of Australia should develop practical guidance for public buyers and specifically addressing:

  • how to integrate respect for human rights into the public procurement process in line with national and international standards
  • human rights due diligence procedures during the contract management stage, allowing public buyers to be involved in monitoring and remediation processes, and
  • grounds to exclude suppliers that fail to respect human rights or develop appropriate due diligence in their supply chain from eligibility for public contracts.

Together with guidance, the Government should also support knowledge and capacity development of public sector procurement professionals on human rights risks and measures to address them, for example, by supporting online tools to identify higher-risk product categories and countries of origin; e-learning courses; and an online hub or portal for Australian public buyers to share good practice and experience on human rights.

Finally, a process of assessment of current knowledge, needs, challenges and opportunities among public buyers in relation to the integration of modern slavery, human trafficking and human rights in supply chain management should also be undertaken.

In this regard, we suggest a public procurement and human rights in supply chains Working Group should be established to include senior public administrators, procurement professional bodies, representatives of relevant sustainable procurement initiatives, civil society organisations and procurement law professionals to develop the assessment.

The Group could also oversee a programme of practical initiatives on procurement and human rights on an ongoing basis.  Support could be sought from international networks, such as the  Learning Lab and UNEP’s 10 YFP or regional bodies such as the Chartered Institute of Procurement and Supply (CIPS) Australasia.

Public buyers have the potential to become key players in the fight against modern slavery, human trafficking and human rights abuses in global supply chains, but to fulfil this role they need an enabling legislative framework, the ability to apply appropriate penalties and incentives, as well as support to develop due diligence effectively and live up to their responsibilities and social expectations.  Australia has an opportunity to set the pace by establishing an important international precedent if it takes on this challenge with new Modern Slavery legislation.

 

The Learning Lab’s submission to the Inquiry into the Commonwealth Procurement Framework can be accessed here.

The Learning Lab’s submission to the Inquiry into establishing a modern slavery act in Australia can be accessed here.

UNICEF Australia’s submission to the Inquiry into the Commonwealth Procurement Framework can be accessed here.

UNICEF Australia’s submission to the Inquiry into establishing a modern slavery act in Australia can be accessed here.