Modern slavery doesn't just occur in developing countries. Directors should work to eliminate the risks of modern slavery from their corporate supply chains.
Konica Minolta Australia is a 100 per cent-owned subsidiary and reseller for the Japanese business/industrial imaging multinational company.
Dr David Cooke GAICD had been its first non-Japanese managing director for just a month when his life took a most unexpected turn.
While visiting Cambodia for a company conference in 2013, Cooke was shocked to hear the keynote speaker, Somaly Mam, talking about her efforts to rescue women from sexual slavery. On stage with Mam sat three young women who had been rescued and were now attending university. One was becoming a nurse, another doing a finance degree and another becoming a psychologist.
“To be honest, it was the first time I’d had contact with any form of slavery,” says Cooke. “There is a saying in the human rights movement — ‘Once you know, you can’t un-know.’ I felt I needed to do something.”
Cooke decided to get educated. What he discovered was shocking. There are more slaves today than at any time in human history — more than 45.8 million, according to Global Slavery Index estimates (2016). Even among those who are paid, conditions are appalling. He cites as an example the cotton fields of Uzbekistan. “Apart from underpayment and poor treatment, the cotton crops are sprayed with herbicides while people are picking the cotton, affecting their health and longevity.”
It was a Herculean task. How could he be sure the uniforms his company’s techs wore were made without slavery? He couldn’t.
“We think we’re a good company in Australia, but the T-shirts worn by our engineers have come to us off the back of the suffering of other people,” he says.
Understanding modern slavery is a requirement for all Australian entities that earn annual consolidated revenue above $100m since the introduction of the Modern Slavery Act 2018 (Cth), which came into effect in January. Under the new law, more than 3000 Australian large businesses and other entities must submit annual modern slavery statements from 2020. Cooke's experience offers guidance for others.
“There is a saying in the human rights movement — ‘Once you know, you can’t un-know.’ I felt I needed to do something.”
No stranger to the challenges of the complex ethics of corporate life, Cooke studied the intricate and changing relationship between for-profit and not-for-profit companies for his doctorate of business administration. In his doctoral thesis — The Philanthropic Contract: Building social capital through corporate social investment — he argues the two sectors are moving closer together, as for-profits recognise they need a social licence to operate and succeed. Critical success factors include leadership, trust, partnership, a balance of power and the right motivations.
The depth of Cooke’s understanding underpins Konica Minolta’s anti-slavery program. His first step was to invest in the program and get his own house in order — leadership. He created the full-time role of ethical sourcing manager.
The Konica team drafted a human rights statement, a supplier code of conduct, and developed a process to start rooting slavery out of the supply chain — an “ethical sourcing roadmap”.
Cooke then invited 30 suppliers to a meeting about the new policies. About 20 turned up and were asked to complete surveys about whether their own supply chains were free of slavery. Some saw it as a box-ticking exercise, others dived into it deeply. Cooke saw their attitudes as a turning point. “I don’t want to spend our company’s money with organisations that don’t care if they’re using slave labour,” he says. “I don’t want to deal with those people. I want to deal with companies whose values are aligned to ours.”
It is a call to action corporate Australia would do well to heed. If Cooke is successful in his crusade to change attitudes, laggard companies will lose market share. Cooke sympathises with leaders who are unaware as he was about slavery. While no leader wants to support such horrors, he has no patience for inaction.
“I would like the company to commit more resources... to go faster; to go deeper into their supply chain.”
“It’s very difficult, but that is no reason to do nothing," he says. "If we’re at zero, and we want to be at 100, one is better than zero.”
One strategy is to start with hotspots such as textiles and clothing, where abuses have been well documented — such as the horrendous 2012 clothing factory fire in Karachi, Pakistan, which killed more than 300 people — and in the technology industry, where indentured labour is often used to mine minerals used in component factories. Another strategy is to look closer to home. For example, unethical labour conditions, if not slavery, have been documented among cleaning companies that pay their cleaners award wages for two hours when the job takes four hours to do.
Although calmly spoken, Cooke’s work has a ferocity to it. In April, he became chair of the UN Global Compact Network Australia (GCNA), where he’s been a director since 2017. The GCN is the world’s largest corporate sustainability initiative, with more than 12,000 participating organisations.
Cooke is also chair of the UNSW Australian Human Rights Institute Advisory Board. Beyond his 60–70 hour working week, his ethical work comes first.
“I choose to devote the majority of [my free time] to these human rights issues," he says. “I don’t play golf and I don’t go to the pub with my mates. I live by myself, I’m divorced and my kids have grown up. It is a field of personal interest that marries well with my executive responsibilities and my responsibilities as chair.”
In 2017, Anti-Slavery Australia awarded Konica Minolta the first Freedom Award ever presented to business. In December 2018, the Australian Human Rights Commission presented the company with a Human Rights Award in the business category for its leadership on modern slavery and gender equality. Cooke is pleased with his company’s progress, but wants them to do more.
“I would like the company to commit more resources,” he says. “I’d like them to go faster; to go deeper into their supply chain. I’m an idealist and that would be the perfect outcome for me.”
His work has changed him — and paid an unexpected bonus. “It’s taken me from a position of being appalled when I found out, to being committed to act within my own little corner of the world, at Konica Minolta. An unintended consequence is that our staff sense of pride in the company has risen enormously. That’s not why we did it, but it’s lovely when you get those comments from your own team members.”
Freedom road UK
Reported incidences of slavery tripled in the first two years after the UK introduced its Modern Slavery legislation, writes human rights consultant Louise Nicholls.
Slavery has officially been illegal in the UK since its abolition in 1833. Yet today, globally, there are more than 40 million people trapped in some form of bondage. It has evolved and moved out of sight, adapting to today’s global market and open borders.
Modern slavery is a profitable crime. The International Labour Organisation (ILO) estimates human trafficking to be worth US$150b annually. My experience working for UK retailer Marks & Spencer (M&S), which has topped the FTSE 100 modern slavery statements for the past three years, is that modern slavery is endemic in global supply chains. In the UK, reported incidences of slavery tripled in the first two years after the UK Modern Slavery legislation was introduced in 2015.
In Australia, there is now an opportunity for responsible businesses to use the Modern Slavery Act 2018 (Cth) to start conversations internally and with supply chain partners on how to stop this crime, to help the government prosecute the perpetrators and rescue those exploited. As a CEO, writing to your supplier partners to clarify you want to root out modern slavery can be game-changing. And taking time to listen to modern slavery survivors puts a human face on the suffering and will challenge your assumptions.
What can your board do?
Governance and knowledge are key to protecting your business. The Equality and Human Rights Commission's Business and human rights: five-step guide for company boards was a valuable tool for the M&S board. As identified in step one of the guide, the board needs to ensure the company embeds the responsibility to protect human rights into its culture and practices. To do this, the board should ensure they and key personnel have sufficient knowledge how modern slavery might manifest in their sector and encourage staff to talk openly about human rights issues. The board should also ensure senior management prioritise and have sufficient resources to complete a regular assessment to identify higher-risk areas in their supply chain and set up effective steps to mitigate or remedy issues and report annually as part of board corporate risk analysis.
For M&S, that meant senior management identified expert practitioners to support them with risk assessment and supplier compliance. We held monthly cross-business practitioner meetings to upskill staff, develop policies and tools, and provide a safe space to discuss concerns. For escalating strategic decisions, a small director steering group was formed, and met every eight weeks (supported by an external human rights advisory group, comprising leading subject matter experts that met twice a year). The main board got timely updates and signed off on an annual modern slavery statement and human rights external reports.
No responsible business wants to profit from crime. Tackling modern slavery across the business should not be a point of competition. The message to suppliers has a greater impact when organisations work collaboratively and speak with a common voice, using the same awareness tools. Given the deep-rooted, systemic nature of many human rights issues, collaboration is crucial.
Civil society can be a great ally in supporting victims to raise concerns and in the rehabilitation needed for survivors. At a recent modern slavery conference hosted by the Australian government's Department of Home Affairs, it was clear the government still needs to define how it will work in partnership with business to combat modern slavery. Business must be confident that raising modern slavery concerns will be treated positively and effectively. Legal evidence must be collected to bring perpetrators to justice, and civil society funded to provide survivor support.
In the UK, this has been achieved in different ways in different sectors. For example, food and farming businesses can only use labour providers licensed by the government's Gangmaster Labour Abuse Authority (GLAA). Brands and retailers are required to sign up to a responsible labour users protocol, which defines the way of working with the GLAA. In the unlicensed home and apparel sector, businesses have signed a public/private partnership with GLAA, which defines the behaviours of each party in the event of finding an issue. The UK media also works closely with the GLAA to expose offenders and commend businesses that have followed the protocols in a positive light.
Being transparent in your modern slavery statement is not to be feared. Publishing lists of all first-tier product suppliers, your risk assessment findings, lessons from the past year, and which collaborations your business is working with, and why, can help other organisations make traction with this global issue.
Louise Nicholls, MD at Suseco human rights and sustainability consultancy, was formerly the corporate head of human rights, food sourcing, sustainability and packaging at Marks & Spencer.
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