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Episode 132
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Substantive Law
Combating Modern Slavery: Compliance Obligations and Beyond
Law as stated: 30 September 2024
What is this?
This episode was published and is accurate as at this date.
Eric Boone, Partner and Head of the ESG/Sustainability Division at Madison Marcus, joins David to explore how businesses can navigate the complexities of modern slavery legislation. In this episode, Eric provides valuable insights on effective strategies for ensuring compliance, the role of due diligence, and the importance of transparency.
Substantive Law| What area(s) of law does this episode consider? | Corporate advisory; modern slavery legislation. |
| Why is this topic relevant? | Modern slavery is a critical issue that has far-reaching implications for both businesses operating in today’s globalised economy and the Australian community. The term ‘modern slavery’ encompasses a range of exploitative practices, including forced labour, human trafficking, and debt bondage, where individuals are unable to leave their work due to threats, violence, or coercion. Ensuring compliance with modern slavery laws is not only a legal requirement but also a moral imperative for companies aiming to uphold human rights within their operations and supply chains. In Australia, the introduction of the Modern Slavery Act 2018 (Cth) established a statutory reporting requirement for larger entities, mandating them to disclose the risks of modern slavery in their operations and supply chains and the actions taken to address those risks. This involves conducting thorough risk assessments, implementing due diligence processes, and continuously monitoring the effectiveness of their actions. Failure to comply can result in significant legal and reputational repercussions, making it essential for companies to stay informed and proactive in their compliance efforts. |
| What legislation is considered in this episode? | Modern Slavery Act 2018 (Cth) Modern Slavery Amendment (Australian Anti-Slavery Commissioner) Bill 2023 |
| What are the main points? |
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| What are the practical takeaways? |
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DT = David Turner; EB = Eric Boone
| 00:00:00 | DT: | Hello and welcome to Hearsay the Legal Podcast, a CPD podcast that allows Australian lawyers to earn their CPD points on the go and at a time that suits them. I’m your host, David Turner. Hearsay the Legal Podcast is proudly supported by Lext Australia. Lext’s mission is to improve user experiences in the law and legal services, and Hearsay the Legal Podcast is how we’re improving the experience of CPD. Modern slavery legislation has far reaching implications for Australian businesses operating in today’s increasingly globalised economy. The term ‘modern slavery’ encompasses a range of exploitative practices, including forced labour, human trafficking, debt bondage, and where individuals are unable to leave their work due to threats, violence, or coercion. Ensuring compliance with modern slavery laws is not only a legal requirement, but it’s also a moral imperative for companies that want to uphold human rights within their operations and supply chains around the globe. In Australia, the introduction of the Modern Slavery Act 2018 (Cth) established a statutory reporting requirement for larger entities, mandating them to disclose the risks of modern slavery in their operations and supply chains, and the actions that they take to address those risks. This involves conducting risk assessments, implementing due diligence processes, and continuously monitoring the effectiveness of their controls. Failure to comply with the Act can lead to significant legal and reputational repercussions, making it essential for companies to stay informed and proactive in their modern slavery compliance efforts. We’re joined today in the recording room by Eric Boone, Partner and Head of the ESG/Sustainability practice at Madison Marcus, with extensive experience in the ESG space, Eric is well versed in guiding businesses through the complexities of modern slavery compliance. Eric, thank you so much for joining me today on Hearsay. |
| 00:01:54 | EB: | Pleasure to be here. |
| 00:01:55 | DT: | Now before we get into the topic for today, the Modern Slavery Act, tell us a bit about how you got into this space. |
| 00:02:01 | EB: | It’s been a long road. Actually, I was visiting my mother recently and I recognised it’s been a 30 year road. So, I was involved many moons ago – probably my second year in uni – writing on a book called Students Shopping for a Better World which was effectively an ESG guide. So, it was rating companies on various areas of ESG and giving people direction. I had to write a little bit of a bio about myself for the book and kind of talk about my work in civil rights. So, I recognise it’s been a long journey. So, that journey started many moons ago with my activity with an international NGO; the NAACP. I was a very active participant. I was actually a student leader, went on to serve on the board, became head of their international affairs committee, did a lot of work at the UN and the like. So that kind of sat alongside my career for as long as I can remember. So I went on to attend law school, became a lawyer, specialised initially in corporate finance, worked on Wall Street. So my background is typically corporate finance, securities and banking and finance and institutional investment, and that has been my career for about a good 25 years. But throughout my career, moving from New York and moving to Sydney about 17 years ago, this has always sat alongside my commercial practice. When I say “sat alongside” it, I did work as a pro bono. I did work, like I said, with the international NGOs constantly presenting at the UN and the like and going to international bodies, but it was actually probably one pro bono commitment that really exposed me to modern slavery and that was working with the International Justice Mission Australia, one of the largest anti-slavery organisations in the world. So I was doing pro bono work for them, providing resources for them and gave them space to kind of even lobby for the Modern Slavery Act. |
| 00:03:42 | DT: | Wow. |
| 00:03:43 | EB: | So then they asked me to serve on the board. So, I’d have first mover advantage with the whole concept of modern slavery and what it meant for Australian corporations. And that’s how I got involved in this space. |
| 00:03:53 | DT: | Wow. I mean, that’s really, I think, an unusual path to a focus on ESG and I think a refreshing one to hear. As ESGs become more central to the investment strategy for mainstream funds, I think there’s been a lot of professionals – in banking, in law – who have picked up ESG as a more recent interest, whereas for you, it even predates your legal career. |
| 00:04:21 | EB: | I think that’s right. There is a great intersectionality that we’re now discovering between the commercial objectives and the ESG objectives, right? There are whole stakeholder groups that are focused on ESG that we need to appeal to, whether it be from a corporate reporting standpoint, from a finance standpoint… And I think you’re right, more and more of us are starting to recognise the intersectionality and how it’s not necessarily a costly exercise, but it is actually one that will bring assets to you, that will help you save costs and help you to recognise some efficiencies. So that is a great point and for me, it was a little bit of a passion and purpose kind of meeting as well. And for me, in addition to being an American, I’m African American. We have a history of slavery, right? That, unfortunately, previous generations from me could not avoid. And we have seen not just the legalised slavery, we have seen forms of modern slavery in my family experience, whether it be sharecropping, right, which is another form of industrial servitude, debt bondage in many ways, the whole idea that you are waiting for the harvest to come and you are getting goods from the commissary until then. So, you’re basically in this constant cycle of poverty and debt bondage and that went on for many generations. So this is something that is not just this esoteric topic, this theoretical issue. For me it’s something that, actually, prior generations have felt, and I still feel the impact of that, and I think that’s something that we need to think about when we think about modern slavery. It’s not just saving initially the victims, but it’s also recognising generational impacts of this issue. And for me, I guess I’m keenly aware of that. So that has also informed my work in this space. |
| 00:05:56 | DT: | You had that kind of personal connection. |
| 00:05:58 | EB: | I remember they took me to a luncheon and it was at the office of another law firm and I remember they were showing a person in India being rescued basically from the burnt kilns. It was generations of this family, all working to lift them out of the debt bondage they were captured in, and he had the papers showing basically the repayment of that debt, and to me, it was so akin to what I saw with African Americans showing their freedom papers. So that just resonated with me so much, it made me want to lean into the issue. |
| 00:06:27 | DT: | And I guess that highlights sort of what we were talking about at the top of the episode, that modern slavery takes a lot of forms. It can be insidious, it doesn’t necessarily have to be overt, and across the globe, it can be found in a lot of different practices, but I suppose what you’re saying is they all share a common thread, a common characteristic of exploitation and of indentured labour, unfair working practices. |
| 00:06:56 | EB: | That’s right. And I think, look, you have to remember, that it is, if I have to say a concept, it’s just a lack of freedom, right? Freedom of movement, freedom of choice. You can’t leave a job. You can’t leave the premises, right? You can’t necessarily make a choice to say that “I’m going to exit this”. You don’t have the same idea of choice and freedom of movement, which is key and I think a lot of times people want to simplify modern slavery and say, “I think it’s just basically unpaid wages or someone being underpaid.” It’s more extreme forms of exploitation and right, we have eight forms of exploitation that we typically refer to, as you talked about, I guess, at the head of the conversation, the debt bondage, the trafficking, the child labour, the slavery, the deceptive recruiting, which oftentimes combines with debt bondage, but servitude, forced labour and forced marriage. And I think none of these are mutually exclusive, a lot of times there’s overlap between these different forms of slavery, and I think you touched on a great point – it is something that’s very much hidden in plain sight, like it’s something that is pervasive through our society, but yet we don’t see it, right? There’s such high numbers of modern slavery in this world. Right now, the global estimates are 49.6 million globally. |
| 00:08:06 | DT: | Wow. |
| 00:08:06 | EB: | We estimate there’s about 15,000 in slavery in Australia, right? So, there’s numbers that people are oftentimes blown away by, and people don’t recognise that they have modern slavery in their own personal supply chains and their own personal footprint, right? There is that responsibility for us to see that and fortunately, with the, I guess, greater education, also the greater legislation, the regulatory focus, it has now gained a little bit more visibility for people. It’s not so hidden in plain sight, as it used to be. It’s now that people have turned their eyes to it. They have opened their eyes and taken off the rose coloured glasses and recognised that there are slaves actually among us. |
| 00:08:44 | DT: | Yeah. Well, that’s a great point. I think when we talk about modern slavery, even I did it at the top of the episode, we talk about, “well, it’s about supply chain, it’s about things happening overseas,” but as you say, there’s an estimate of 15,000 slaves in Australia and there is some policy responses to this domestically in the form of the workplace justice visa program recently announced, but you said this takes so many different forms both in Australia and around the globe – let’s talk about the legislative framework. Are those forms of modern slavery enumerated or is there a kind of encompassing definition? When you’re looking at either due diligence on a supply chain or you’re looking at a situation within the borders of Australia, how do you define, how do you identify, modern slavery according to the Act? |
| 00:09:28 | EB: | According to the Act, it’s actually probably a reference point. So they actually refer to the Australian Criminal Code. They also refer to protocols that sit alongside the UN Conventions, as well as the ILO Convention – International Labour Organisation Conventions. So it is usually by cross reference that we are referring to this, but that’s actually positive, right? Because we’re referring to international conventions that are agreed upon by multiple nations, so, therefore, there is a buy-in, there is a whole idea of also harmonisation across multiple jurisdictions, especially when we’re talking about multinationals, right? We are talking about the Modern Slavery Act that’s really impactful, particularly for corporate entities that have annual revenue greater than $100 million, right? So, that is where we’re living and a lot of those corporations, they’re either Australian corporations or international corporations doing business in Australia. So, there is the whole idea that oftentimes those companies are caught up by a regulatory net outside of Australia in modern slavery as well. There’s increasing regulation across the world – Canada, the US, the UK, EU generally, Germany. So then we also have recent legislation being introduced in New Zealand… And we say modern slavery, but I think we need to look more broadly, it’s really supply chain transparency, right? So supply chain due diligence, and when we say Modern Slavery Act, we follow the UK in defining the Act, but it really is about looking through your operations and looking through the multiple tiers of your supply chain. And if I had to give anybody an acronym, it’s ‘AIM’ – to really ‘Assess, Identify and Mitigate’ modern slavery risk in your operations and your supply chains. TIP: The Modern Slavery Act 2018 (Cth) took effect on the 1st of January 2019 and it introduced a new mandatory reporting requirement for larger companies operating in Australia. The legislation requires entities with an annual consolidated revenue of at least $100 million AUD to report on the risks of modern slavery in their operations and supply chains, as well as the steps that they take to mitigate those risks. The initiative was part of a broader effort by the Australian government to combat modern slavery and increase corporate transparency and accountability. A statutory review of the Act, led by Professor John McMillan and tabled in Parliament in May 2023, proposed significant amendments to the legislation, including lowering the revenue threshold to $50 million AUD, introducing due diligence obligations under the Act and imposing civil penalties for non-compliance with the Act. The review also suggested establishing a Commonwealth Anti-slavery Commissioner. Now not all of those changes are reflected in the 2023 amendment bill, but many of those proposed changes are expected to be implemented in the future, reflecting a growing commitment to strengthening the Act’s impact. We should say that the Act is also complemented by the Modern Slavery Act 2018 (NSW), which was harmonised with the Commonwealth legislation and became effective in January 2022. The New South Wales Act focuses on government bodies, local councils and state owned corporations in New South Wales and it imposes obligations on them to prevent modern slavery in public procurement processes. It also established a New South Wales Anti-slavery Commissioner which is responsible for overseeing the state’s efforts to combat modern slavery and ensure compliance with the New South Wales Act. |
| 00:12:35 | DT: | As you said, this is a framework that’s adopted around the globe in many developed economies. As you said, we introduced our legislation following the UK model. You’re looking at this legislation in all of these different jurisdictions, I guess, in the Australian context, how do we compare? How are we doing? |
| 00:12:51 | EB: | Very well. I think, look, as New Zealand possibly comes on board, they may trump us a bit because they are going for a lower threshold for reporting and also for diligence. But look, at the end of the day, right now, among the Acts in place, I’m glad to say we’re at the top, and I tell my clients – because I deal with a lot of multi-jurisdictional large clients – about how we compare and that we are the gold standard and they were asking us for the delta between us and the UK, and us and America, and we were definitely the higher standard to which they had to appeal. Basically, with the whole notion of also looking through not just the initial tier of your suppliers but looking through multiple tiers, the guidance that was coming out of the Business Engagement Unit for modern slavery, they were really prompting us and really building, I guess, greater institutional capacity among Australian corporations to really look at this issue, and giving them the necessary resources to do so. We also saw higher compliance numbers among our reporting entities compared to those in the UK. |
| 00:13:49 | DT: | Wow. |
| 00:13:49 | EB: | And that was a positive thing to see because they also, similar to us, had to do a three year review and they were noting that discrepancy. So look, we are a little bit more compliant and I don’t know how much of that is due to timing. When I say that, when the UK Modern Slavery Act was issued, I don’t think there was the same knowledge and awareness of modern slavery as an issue. It wasn’t getting the same attention in popular media like our traditional media. There wasn’t CNN doing weekly or monthly shows about modern slavery in the world. So there was a different environment and I think the receptivity of different stakeholder groups also helped to push compliance by Australian corporations. |
| 00:14:25 | DT: | We sort of hit the ground running. |
| 00:14:27 | EB: | We did, and look, there was some resistance. There’s always going to be some resistance to corporations and we deal with those weird calls from clients who are like, “do I have to do this?”, and “what do I minimally need to do?” But as they also became more aware of the issue, as they became educated about the issue, I saw corporations, I saw the legal departments, I saw the procurement groups leaning into it because it is something that cuts across the whole management and the whole operations of a corporation to deal with. And it is a multi-discipline approach that really needs to be enacted for you to have an effective action plan to deal with modern slavery. And a lot of times when we’re being asked to give clients a multi-year action plan – because look, I tell people “it’s going to be you building capacity, you building awareness, even the desirability among your board, among your executives to really lean into this, to give it the weight that it needs,” because this is not just about reporting. You have to be doing something in this space with regard to your policies, your protocols, your procedures, with regard to the assessment, with regard to the audits that you are conducting, with regard to even mapping your supply chain effectively, and dealing with the dynamic nature of a supply chain, the constantly changing nature supply chain. Some people are fairly static. I get a lot of visibility of people’s procurement. Some people are fairly static and some people have a lot of movement. So it’s interesting to see that dynamic and how it plays out and you’re also getting great visibility of people and sometimes their lack of protocols and procedures around procurement and this goes to – how well does this corporation manage their risk? And that speaks to a larger issue. I have to tell people, “we’ll see how the New Zealand bill goes, but right now, we’re the gold standard”, which is very beneficial because a lot of times I am dealing with multinational organisations that are trying to find – how do they harmonise this? How do they harmonise their reporting across multiple jurisdictions? – and my advice is always, obviously, go to the higher standard. |
| 00:16:20 | DT: | That’s so interesting because you see that in privacy law, right? The GDPR applies in Europe, but it is the gold standard and so we find increasingly that it applies to operations in Australia, in the United States… Because follow that standard everywhere, and you’ll be fine. |
| 00:16:34 | EB: | You’ll be fine. And that is generally the advice I give my team about compliance across multiple jurisdictions, is always find the gold standard and make sure that that applies and that’s the same thing for Australia. So we dealt with a lot of companies that were multinational, that were asking us for the delta and wanted us to give them the delta between this and maybe UK, or this and the US, and how should they augment their disclosure to comply? And so, look, it was oftentimes recognising that they were reaching a little bit and Australia definitely punched above its weight with regard to the Modern Slavery Act and what they were requiring people to do. And I think that has only improved with the three year review, the amendment process that has occurred – and we can talk more about that – but I think as we basically build out institutional capacity, and also as we have stakeholder groups requiring more – forget about the regulatory response – as we have stakeholder groups requiring more, we have seen that the report in Australia has critically improved compared to other jurisdictions. |
| 00:17:34 | DT: | Interesting. Okay, so we’ve talked about what modern slavery is under the Act, we’ve talked about how we’re doing compared to our neighbours and our cousins internationally. Let’s talk about what the Act really requires of us. You’ve summarised it for us, I guess, with your AIM methodology, but let’s, like enumerate it. Let’s talk about what, if you’re a company to which the Act applies – turnover over $100 million – what do you have to do under the Act? |
| 00:17:58 | EB: | The first thing is you have to basically prepare an annual report and – I actually should take a step back because I think people sometimes get caught up in – clients, very much the same – where they just think of this as a reporting compliance obligation, and I tell them to take a step back and really look at this. The whole point is you need something to report about. So this is about the exercises and the actions you are taking to Assess, Identify, and Mitigate modern slavery risk. So that is really where your thoughts need to be and the reporting is just a flow on from that, right? So really focus on that, but I think so many people get caught up in the reporting obligation, which is this whole idea that you must file an annual Modern Slavery Statement that gets published on an online register and that needs to happen for your reporting year, which aligns with your financial year. So it needs to be filed within six months after the end of your financial year. So that is, at the high level, I guess, what the requirement is and you must comply with seven mandatory reporting criteria and I can sit there and go through them for you, you’ve kind of went through it at the beginning, but it’s the whole identification of the reporting entity, talk about the structure operations and your supply chain, talk about the risk of modern slavery, that you basically assess the actions taken, the effectiveness of those actions and, increasingly, we’re asking people to do some quantitative as well as qualitative assessment of the efficacy of those actions and then talk about the consultative process across your corporate group – which is really interesting as well – also your consultation process, possibly with the civil society as well, in addressing those issues – because they are oftentimes, like the NGOs in those different jurisdictions that may be better empowered to address issues on the ground – but then there’s also the catch all of any additional relevant information. So those are the seven mandatory reporting criteria during the days of COVID. We wanted people to also talk about the impact of COVID on their supply chains and the risk of modern slavery that resulted from that. TIP: Entities required to report under the Commonwealth Act, have to submit a Modern Slavery Statement or an MSS. Modern slavery covers a range of criminal behaviours, including depriving someone of their civil liberties, human trafficking, forced marriage, and child labour. And importantly, the modern slavery regime doesn’t cover practices that only meet the threshold of being unlawful, like wage underpayment where the practices don’t otherwise have elements of slavery like servitude or debt bondage but, how an entity chooses to report on one’s slavery risks might influence other related obligations that do cover those sorts of practices, particularly regarding compliance with labour and immigration laws. As Eric said, reports have to be submitted within six months after the end of the reporting entity’s financial year, and they’re made publicly available on an online register. So, investors, customers and public commentators can look at those and make note of them. The reporting process aims to ensure that businesses continuously review and improve their practices to mitigate modern slavery risks. The Act doesn’t have a template or an exhaustive list of the contents of a Modern Slavery Statement, which leads to a large degree of variability between organisations and the information that they choose to include. Some organisations report on the bare minimum when it comes to their supply chain and operations, while others take it as an opportunity to, as Eric said, demonstrate the robustness of their risk management and procurement processes to investors and customers. We ask some of our clients to expand that and maybe just think about geopolitical actions or anything that is having an impact because we know – look, the Ukraine-Russia war, we talk about the pandemic, we talk about inflationary pressures – all of those exacerbate the risk of modern slavery, right? And when you talk about people who are dealing with |
| 00:21:54 | DT: | You’re a construction business… Cost of timber increases massively because of the war in Ukraine, you look for another supplier and maybe you don’t think too hard about where that timber’s coming from, and that increases your exposure. |
| 00:22:06 | EB: | Exactly, or you find your supply chain being disrupted so you’re just trying to fill a hole. You’re not necessarily doing the due diligence that you normally conduct on a supplier as part of the procurement process. So you may find yourself unintentionally exposed in that regard because you’re just trying to ensure the timely receipt of goods, not necessarily ensuring that supplier is managing their modern slavery risk. |
| 00:22:26 | DT: | Got it. You’ve done a good job of explaining how substantive thinking about the impact of these procurement and supply decisions is reflected in the reporting requirement, in the sense that what the Act really requires of you is your Modern Slavery Statement, but the process of developing that is about having, as you said, something to report on – substantive practices that reduce the incidents or the exposure or the support of modern slavery in your supply chain and you so neatly articulated this challenge, that I think lawyers listening from any practice area probably recognise from their own experience, of advising a client who just sort of wants to tick the box – “Yes, I’ve complied, I’m not at risk of some civil penalty” – and you’re trying to say “well, look underneath the compliance exercise you’re doing and the substantive exercise that you’re undertaking.” I guess you see that a lot in some of these regulatory practice areas where the process of looking at the procurement process from a particular perspective, modern slavery compliance for example, reveals how little of a process there is at all and it raises the bar for the organisation around risk management more generally. I mean, we certainly see that with cyber security, we certainly see that with privacy. In fact, what you were saying about Australia’s legislation being the gold standard, that’s great, that’s encouraging, but I want to go back to something you were saying, which is that you do have clients and we’ll talk on a no-names basis, who look at, as you well put it, that kind of “what do I have to do minimally to tick the box” and that attitude towards a legislative requirement, towards a regulatory requirement, you know, that’s going to be familiar to a lot of our listeners in a lot of different practice areas. “The request comes in from in-house legal, this has been put in this silo, this is a problem for legal to sort out, let’s tick the box, let’s get a letter of advice saying we’re all good and let’s move on.” How do you, practically speaking, do what you were describing, which is get that buy-in from procurement, from management, from the board, to have that broader impact across the organisation, that capacity building impact, like you were saying? |
| 00:24:33 | EB: | It’s actually a great question, and I actually love that part of the process because I find that the issue finds its way to the legal department, and the legal department or the compliance department is just dealing with it and they don’t necessarily understand the full issue. They don’t understand the context that sits around them. They don’t understand the victims that need to be addressed in that potential risk of modern slavery, right? And I think once you start to give them the colour, the context, and even recognise how their decisions are impactful, I actually start to see buy-in. And it’s funny – as you educate the client about the full issue, about the complexity of the issue, of how it reaches – I also get them to understand, I guess, the reputational risk, because, like, it’s really getting them to understand how much this is a reputational risk for them, that has really some serious commercial consequences, especially when you have probably people further up in the food chain from them who are making decisions based upon this. So, they themselves may not feel like we need to make this a big concern, but for people who are maybe on public markets, who are really getting evaluated by investors or who are getting pressure from their financiers, their lenders, their banking partners, to really focus on this issue, to give them clear reps and warranties about their compliance with the Modern Slavery Act and other modern slavery legislation. This really becomes a pressure point, and it also becomes an aspect of competitive advantage for companies if they address it correctly, where you will find yourself having commercial advantage over your competitor with a potential customer, or you may have a greater access to certain investment groups. |
| 00:26:12 | DT: | I was going to say, it’s certainly an advantage in capital markets. |
| 00:26:15 | EB: | This increasingly becoming a point of concern for investor groups where they are increasingly giving attention to ESG considerations and modern slavery in particular and it was funny, we were actually dealing with a client recently – a fund manager, one of the largest fund managers here in Australia – and we were talking about the issue and we were talking to their full sustainability team and they were actually saying modern slavery has become one of the top issues for their investor groups and I said “wow.” I kind of always knew it was there, but in the midst of all the discussion about net zero and environmental sustainability and how we’re focused on those issues and we deal with that as well but I guess this goes back to my roots as a securities lawyer. So, I deal with disclosure obligations throughout my career, right? And there is the whole notion, I guess, from the days on Wall Street of complying with the SEC reporting obligations. You can make that just a reporting exercise and you will have a very deficient document that does nothing in respect to stakeholder engagement with the group that is intended to read it. So, I always tell my clients, let’s look at this exercise and let’s look at the purpose of the Act. The purpose of the Act is really to give people transparency about what you’re doing as an organisation to deal with the modern slavery risk in your operations and supply chain. So, the whole point of this is not necessarily for the government or the regulators to really regulate you. It is for the groups who are reading the Modern Slavery Statement, which is being published on the online register, to have the power and the information necessary to police you. |
| 00:27:40 | DT: | For the market to do its job. |
| 00:27:41 | EB: | Through their spending, through how they lend, through how they invest… So if you really look at it as just a compliance exercise, you’re missing it. You are leaving money on the table. This is an engagement piece. This is no different from an annual report, an investor’s communication, a sustainability report… If you want to basically be able to access sustainability linked finance, to access different fund managers that may have an ESG mandate, if you’re trying to access different types of customer groups, or even trying to establish a competitive advantage with maybe a customer that is a multinational, that has this on their radar, and you want to distinguish yourself quickly from another supplier, by giving them readily available information about your efforts to address modern slavery risk, you are failing to see that this is an engagement piece that you need to really address and make sure that you are giving the substantive details necessary – not spinning it, not creating a potential for a claim because you are not giving the most material and accurate information – but really giving them substantive information that will inform their decisions, and I very much look at it from that security standpoint where we’re used to giving negative assurance letters. We want to make sure that you are not opening yourself up to a claim, especially again, with the US I guess with the Me Too movement, where we saw things were happening, where people were putting out policies and procedures that were becoming the basis for claims and actions because they weren’t living up to what they put on paper. So, it’s very important that you have that lens, you look at this in a very holistic sense and you recognise that and you approach it in that fashion. |
| 00:29:14 | DT: | Yeah, and as you were saying, it’s not just liability minimisation – it’s not just avoiding a claim, avoiding a fine. As you said, the reputational aspect of this is part of the design of the regulatory framework, right? And it goes back to what we were talking about at the top of the show – your background in ESG – where these ESG funds like BlackRock’s ESG fund, it’s outperforming the market, right? This isn’t just a place to put your money because you want to do something good with your investment capital. This is the capital efficient way to make your money work. If you want investment from those funds, then you need to be an attractive ESG investment. |
| 00:29:51 | EB: | And you’re talking about it. You said it well before, we were talking about the whole idea of this being risk management, and it gives investors comfort when you have someone who has the policies, procedures, the protocols in place to manage supply chain transparency, diligence and the like. They’re typically well managed across the board. They are typically addressing and having a more efficient process of managing and addressing their risk. |
| 00:30:17 | DT: | And that’s one of those things that when you hear people talk about “why are ESG funds doing so well?” This is something that often comes up, right? Well, if you’re managing these risks, well, you’re probably managing the rest of the business really well. |
| 00:30:27 | EB: | Really well, and you’re also opening yourself up to cheaper finance, and I mean, there are clients that I’ve worked with and they work in the construction space and I said “well look, let’s get an ESG policy in place for you. Let’s get some procedures in place.” And I said, “actually, just tell me what you’re doing in the management of your business and your properties.” I said, “you are actually hitting a lot of these already.” And I said, “let’s just write it down on paper and let’s just get it established as a protocol within your organisation.” And we presented it to their financier and they got 25 basis points off their financing immediately just with the presentation of what they were doing, and as we developed that action plan, there’s potential for more of that to come off. So, it’s just the whole idea that there’s immediate realisation of savings for you, if you even just memorialise what you’re already doing. |
| 00:31:12 | DT: | Yeah. This isn’t just a compliance exercise. This can create value in the business. It can reduce the cost of capital. |
| 00:31:17 | EB: | Exactly. |
| 00:31:18 | DT: | Alright, so I’m sold, right? And I think it sounds like your clients are too, right? |
| 00:31:25 | EB: | Over time. |
| 00:31:25 | DT: | It’s a process. |
| 00:31:26 | EB: | It’s a process. They’re not there instantaneously. |
| 00:31:28 | DT: | Yeah but, all of this does come back to your annual Modern Slavery Statement. That’s the vehicle, I guess, by which these reputational benefits or disbenefits are achieved or suffered, right? And we’ve talked a little bit about what that modern slavery statement has to contain. As you’ve said already, that obligation under the Act only applies to companies which have a turnover of $100 million AUD or more, but it is possible for a company with lower turnover to voluntarily submit a statement. |
| 00:32:01 | EB: | There is. |
| 00:32:02 | DT: | How common is that? What are some of the considerations that go into the decision to voluntarily submit that? Because I expect that the sort of companies that sit below the threshold who are voluntarily reporting, there’s going to be a huge selection bias towards some positive news to report, right? |
| 00:32:19 | EB: | Yes. It’s actually surprising to see that there is a high number of voluntary reporters. So I think the last time I checked there was a number of over 600 voluntary Modern Slavery Statements, so that is a positive, and most of them are, like you said, south of that $100 million threshold. So, look, there is a procedural process to choosing to be a voluntary reporter. You need to notify the Attorney General’s Department via the online register and then you have to do that before the end of the reporting period and you also have to recognise that you have now subjected yourself to be compliant with that notification that you’ve provided, so that if you don’t file, then you’ll be deemed non-compliant and possibly named and shamed for not being compliant. So it is an important thing to note, and if you’re not going to do it going forward, you need to also notify the Attorney-General. |
| 00:33:05 | DT: | Got it. |
| 00:33:05 | EB: | But look, a consideration for some is the cost, obviously but it’s also maybe some efficiencies recognised. A lot of people are getting questioned about modern slavery maybe part of the supply onboarding process or maybe they’re being asked to report by a potential financier. If you prepare a Modern Slavery Statement, you can just quickly refer them to that Modern Slavery Statement and you don’t necessarily need to go through some onerous process. So there are some commercial advantages to preparing a Modern Slavery Statement, where again, you have this memorialisation, you have this singular referral reference document with respect to what you’re doing in modern slavery that can be easily looked at by your customers, your investors, your financiers, and you’re off. So there are some cost efficiencies to be recognised from that. |
| 00:33:49 | DT: | I have a personal example of that, not in the modern slavery context, but you can see that in a range of different areas. I mean, for our own business at Lext, we found that with cybersecurity compliance, where we had large enterprise clients, large law firms, financial institutions who wanted to see that international standard of cybersecurity certification and it just got easier to meet that standard, to satisfy the inquiries of these customers then kind of do it piecemeal every time. So I can absolutely see how a business with turnover of $50 million every year that wants to supply to the Australian government, that wants to supply to our big four banks, that’s being asked about their own supply chain because of their customer’s requirements and due diligence processes, is probably incentivised to just step up their own due diligence and as you said, have that off the shelf “well, here’s our Modern Slavery Statement for the year.” |
| 00:34:48 | EB: | Especially if you may have different touch points within your organisation that may be providing different responses. And I’ve often-times seen where people are doing this part of the supplier onboarding process, and their asking questions, you may have someone filling it out who doesn’t even understand the context of the question, and they may put a wrong response that may strike you off the records as a potential supplier. So, if you have this singular piece of information that’s going out with regard to modern slavery, you reduce that issue. You also reduce the administrative burden on your teams, you free them up to do what they need to do instead of being responsive and reactive, you’re taking a very proactive response and actually recognising a lot of efficiencies and also avoiding that because we’ve helped procurement teams develop questions that will help them to screen people and we have to caution them about necessarily where the response is, and we’ve seen where people have just clicked the wrong response and then for that they’re being red flagged and they’re potentially being stricken as a potential supplier. So if you get it wrong, it could be costly to you. |
| 00:35:49 | DT: | Yeah, absolutely. And I want to go back to the nitty gritty of how you implement some of this stuff but before we move off the reporting obligation, we should cover this off. As you said, the real meat of this reporting obligation and the consequences for not meeting it is the reputational harm, is missing out on the opportunities, the funding opportunities, the customer opportunities, that come with compliance, but we should say, under the Act, if you’re obliged to report and you fail to do so, what are the consequences? |
| 00:36:17 | EB: | Look, they’re not grave. And that was a lot of the concern about the Act in its initial stages, that it didn’t have the same penalty, punitive measures that we wanted to see that would give it the teeth for enforcement. We’re now seeing the Attorney-General’s office increasingly stepping up their review of Modern Slavery Statements where they basically want to see that capacity building, they want to see you grow in each successive year. I think there was a willingness to kind of recognise that corporations needed to build that capacity, and there were very little reasons why somebody would not necessarily find their statement filed if they submitted it signed by a responsible member of the board and basically, there was very few grounds upon which you did not see a statement actually accepted. |
| 00:36:58 | DT: | Got it. |
| 00:36:58 | EB: | There wasn’t a very hard critical lens placed there, but we see that the lens and the questions that are flowing now from the Attorney-General’s office as part of their review stepped up and as we see the Office of the Anti-slavery Commissioner come into place, we expect that to also increase with the recent amendment that came as part of the three year review, and more people wanted more punitive measures, but I think we’ve recognised that this is really about empowering stakeholder groups to basically exercise those powers and get people to move accordingly. Look, it is the whole idea of you being named – maybe not necessarily even by the regulators per se, but also being named maybe an academic. It was interesting to see Monash University would do a review of the Modern Slavery Statements and they would number the people who were the best or people who were failing. |
| 00:37:41 | DT: | I’ve seen those actually. |
| 00:37:42 | EB: | And it was actually compelling. It was actually compelling for a lot of people to make sure that they weren’t on the bottom of that rank or they weren’t named as being the worst Modern Slavery Statement. So those were actually, again – where we’re talking about the transparency, the stakeholder groups, whether it be academics, whether it be customers, suppliers, financiers – it’s interesting to see how much the corporations were responding to that and they were seeking to make sure that they were compliant, not necessarily just for that tick, but to make sure that they were moving and that was so positive to see people who wanted to move from one grade in that Monash University survey to the next grade up. I told a client they were in the top 25% of ours and they were like, “okay, that’s great to hear.” And these are clients who were initially possibly resistant to doing it. And then when I said, “okay, well, look where we got you.” And they were pleased by that. |
| 00:38:28 | DT: | This feels like such a successful but rare example of a market led approach to enforcement of a regulatory norm. Often we talk about self-regulation or market based regulation, disclosure based regulation in a kind of derisive way, like, “oh, well, that doesn’t have any teeth, how effective is that likely to be?” But it does sound like that has been an effective strategy, notwithstanding the sort of absence of really strong penalties under the Act. |
| 00:38:53 | EB: | I agree. It’s been totally effective. And I mean, I’ve seen people who are really concerned. So, a lot of our definitions of modern slavery are tied to the Australian Criminal Code. No one wants to be associated with criminal behaviour, right? There is that issue. But there was an issue I remember dealing with; another big client who was just querying. They had two big suppliers in this space and one actually got some press for having modern slavery in the second tier of their supply chain overseas. And that was a done deal for them. They said, “we’re dropping that supplier” and that supplier addressed the issue. The question is, how did you not have such visibility, I guess, when it’s so close in your supply chain? And this goes back to the UN Guiding Principles on Business and Human Rights and that frames how people need to look at this issue because you need to look and see whether you’re causing, contributing, or linked to modern slavery and that will determine the scope of the actions required for you to address it. Now, if you’re causing or contributing, that goes to the whole idea of business do no harm and we really need to immediately stop, and stop work with that supplier that’s causing that harm, really working, how do we remedy? How do we save that victim? How do we address the wrongs that have been done? I mean, because as lawyers, we need to remember that the concern here is really about the victim. That is paramount, right? We’re trying to prevent these victims of modern slavery. That is really what we’re aiming to do. So you’ve got to make sure you do that in a way that’s not going to cause more harm to that victim of modern slavery, that you’re going to really address and remedy that issue, prevent that from being prevalent again in that practice. So those are the concerns that need to colour people as they approach this issue and really think about that and how do they do it, but I mean, that whole idea of cause, contributing or linked also requires us to think about the scope of the diligence we conduct. The whole idea of looking through the multiple tiers of your supply chain, and how do you do that effectively when you have global supply chains? I worked with one multinational that was actually trying to map their supply chain, the tiers of their supply chain themselves. I said, “this is a Herculean task,” and this is one of the largest multinationals in the world. And to their benefit, I will give them some praise because they were able to get at least some map, and some of the second tier. So, you really need to think about tools that will allow you to map those supply chains. How do we use basically SaaS that is already out there that will allow us to maybe plop in our first tier and then map on a theoretical basis, at least what our supply chain potentially looks like down to the 10th tier, and then we can figure out, okay, where does the risk of modern slavery appear in those tiers and where do we need to do further diligence? |
| 00:41:22 | DT: | I mean, that does sound like a dizzying task. It makes me think of that classic economics essay, “I am a pencil.” And you know, that simple object, like a pencil, has inputs from around the globe. The graphite is from India, the timber is from Indonesia – and this simple object, let alone something like an iPhone or a laptop – it does sound like a very difficult task to map that first tier, let alone the second. So let’s get into the nitty gritty of: your client is bought in, they want to comply, they want to have something great to report on in the Modern Slavery Statement, they want to be diligent about modern slavery practices in their supply chain. How do they go about this? What are some of the tools that are available? |
| 00:42:01 | EB: | Look, there’s a lot of tech providers out there in this space. Some are better than others. I won’t start to name them but look, there are some better than others that will really give you that ability to pierce through the multiple tiers of your supply chain to really see where the modern slavery risk sits, in which industries, which geographies, and in which tier, which is really important because, again, that kind of gives you the sense of your obligations to remedy whatever risk or to address whatever risk, the extent of whether the actions required from you and the immediacy of those actions, right? So that’s important. So one is to use those tech providers. One is to also use desktop due diligence. I mean, look, there is the whole notion that there’s increased transparency like the Australian Modern Slavery Statements, there’s increased transparency around the world about what people are doing to address modern slavery risk. There’s increased focus on it. So there’s a lot that can be done from even a desktop due diligence on particular suppliers to look through and you need to just be able to identify and see what you’re doing and also to establish relationships with local NGOs, civil society, to help you do the necessary audits on the ground, and also be very real, and I guess I look at these disclosure obligations, like I said, from the standpoint of a US securities lawyer who had to make sure you had material accurate information, there was no omission of material information that an investor would choose or would need to make an informed decision, and that is similarly how you should approach this. Is there any material information, accurate information, and what are your due diligence procedures? What are your verification procedures to make sure that your disclosure about your modern slavery risk management is correct, voracious, and can be really consumed by investors, financiers, customers… So look, that’s something that is developed over multiple years. I always give my clients typically like a three year action plan because I just recognise it’s all not going to get done in one year. “Let’s set up a three year action plan, let’s look at the priorities, let’s look at the resources required internally, externally for you to do this. Let’s sit there and let’s plot it out to make sure that we have this really effective modern slavery risk management mechanisms in place,” right? |
| 00:44:04 | DT: | I guess that’s one of the regulatory design benefits of this approach, right? That, because it’s about disclosure, because it’s about giving investors, customers, the opportunity to decide, to have the transparency on a company’s supply chain practices… |
| 00:44:20 | EB: | And operations as well. |
| 00:44:21 | DT: | And operations, absolutely. Operations, because as we said, modern slavery is occurring in Australia, but because of that focus on letting the market do its work, I guess, there is that flexibility as you described, so long as it’s not performative, as long as it’s not facile and not legitimate, to demonstrate that working towards, you know, like at the start of a three year plan, we’re developing capacity and at the end of that three year plan, you’re going to see something comprehensive and robust, but at the start of that three year plan, you’re going to see a lot of that work starting to happen rather than completing. |
| 00:44:56 | EB: | Exactly right, and I think that’s right. And I think, look, there has always been that acknowledgement in the Act, in its enforcement where people have been really understanding of where there’s going to be some roadblocks even when there was COVID, we took the foot off the gas a bit because we recognise people in the midst of all these, their need for divergent resources to respond to that crisis, they may not be able to devote the resources to modern slavery risk management. So we understood that. We understand that there’s a finite amount of resources that can be applied. So look, there is that acknowledgement of capacity building, and there’s also the acknowledgement of the reality to build the buy-in that you need at the board level, at the executive level, to really build this out and to get the conversation happening among teams, amongst the procurement, amongst the legal, amongst the compliance and risk committees and all that conversation needs to happen. It needs to be a broader consultative practice among the parent with the subsidiaries and other jurisdictions, and understanding what the risk is for that subsidiary possibly operating in a jurisdiction where there’s a higher risk of modern slavery, and how are we managing all that? So all of that has to be taken into consideration. |
| 00:46:03 | DT: | And that aspect, looking at the resources that are available, what’s happening geopolitically that might be impacting where we are in a journey towards modern slavery compliance, all of that is a segue to a really interesting topic I wanted to ask you about because we hinted at it earlier, which is almost this utilitarian calculus around the actions that we take in our supply chain. You said before that there’s the ‘do no harm’ principle around promoting or encouraging these practices and merely being linked to them. There might be situations like COVID or conflict abroad that have sudden and acute impacts on our supply chain where the longevity, safety, continued operation of the business depends on rapidly bringing in suppliers that maybe haven’t been subject to full due diligence. So, there are these situations where you can see an argument being made for these companies having a more relaxed approach to their due diligence for suppliers but on the other hand, the modern slavery practices that we’re talking about potentially not catching, by not having that due diligence, is so morally repugnant. Tell us a little bit about that fraught calculus of what steps a company takes to investigate these practices in their supply chain, how deep they go, when an exigency like COVID, like the war in Ukraine can allow this less robust investigation when the risk of what you might be allowing to occur is… |
| 00:47:32 | EB: | … is greater. |
| 00:47:32 | DT: | … so great. |
| 00:47:33 | EB: | Yeah – actually, is greater, right? Because when you have those things that are happening around the world and you see the supply chain disruptions, or you see everybody paying more to get certain goods and including your suppliers, they’re going to be trying to find ways to cut costs to maintain their profitability, right? And like I said, the first thing that people typically cut are labour costs. So, you can’t necessarily use those same things as excuses to be less diligent because, actually, the risk is greater typically, when those conditions exist. And I think there’s also the movement from the whole paradigm of ‘do no harm’ to actually where we expect our corporate citizens to actually do good for society and have some benefit to society. So I think there is that shift that’s occurring in everybody’s expectations of what it means to be a good corporate citizen, right? We’ve expanded the CSR to now ESG and there’s becoming, increasingly, an expectation that you are going to live in compliance with those expectations but like you said, we are never going to be without those perils or those circumstances where we’re finding geopolitical issues that are causing disruptions and causing concern or we’re now dealing with inflationary pressures or we’re now dealing with all of this cost of living increases that are going to be so impactful on everybody but I do think there is this notion as a basic framework. And I think there’s so many ways that you can build out your capacity to deal with these issues without it being a draining exercise, right? Look, you’re doing diligence with your suppliers typically as part of any procurement process, right? You’re checking their credit. You’re tracking their credit standing, their ability to think about them as a contractual counterparty. It is just layering some questions in there with regard to giving you some screening about modern slavery. A lot of times we sit with our clients and say, “okay, look, well, let’s see your screening process.” How do we not make this necessarily so burdensome that it doesn’t get done because that’s also a concern. Also, what can we do from a desktop diligence standpoint that can give us a better visibility of where the risks may sit with particular suppliers? So you can ask more pointed questions and how do we get you to engage with your suppliers in a more substantive way that builds out that relationship, right, because we don’t want you to necessarily pull when you see a risk, we want you to exert your pressure, your influence to cause change with that supplier, right? We don’t want you to create a greater hold to let somebody who’s going to be more exploitative come in there. We want you to exert and leverage your spending power to cause changes with that supplier. We say, “look, it’s not about saying I’m not going to deal with them.” It’s about “I’m going to change behaviours. I’m going to use my leverage to help change behaviours and cause greater compliance.” So that is the lens we want our clients to apply. |
| 00:50:09 | DT: | That’s a great point. Look, we keep going back to this discussion about ESG and its impact in the finance landscape – where an ESG focused fund pulls its investment from a poorly performing company… so where does that company go? – to a financier that couldn’t care less about ESG performance, and they’re almost incentivised to have worse Environmental Sustainability and Governance performance to meet the higher cost of capital from this non-ESG funder. So there’s a parallel here around, “well, we could deselect this supplier straight away to cut them off. That’ll improve our reporting for ourselves,” but look, as you remind us, it’s not going to improve the lives of the victims of modern slavery who will continue to suffer in the conditions they’re in because that supplier is going to start supplying an end customer who isn’t doing the due diligence, who isn’t flexing their muscle to improve conditions. So, that’s a really great point about when you uncover this practice, what do you do about it? |
| 00:51:09 | EB: | It also depends upon, I guess, where is that appearing? Is it appearing with that immediate supplier or is it appearing lower within his supply chain? So does he have a choice to make about how he may be contributing or linked to modern slavery? Now, if it’s someone who’s causing modern slavery, again, this goes back to the UN Guiding Principles, there’s a different immediacy of action required, right? How do we deal with that victim when that victim is so close to us, right? If that victim is in privity to us, right? How do we deal with that? How do we call the police? How do we think about the best interests of that victim? How do we act in that regard? How do we get people who are on the ground, who are more localised, who understand, contextualise the issue, right? How do we then deal with those issues if they’re really close to us, right? But then, there is a notion of when something is a little bit further removed down that tier and how do you get your suppliers to make better procurement decisions that will reduce that risk? How do you leverage that? I deal with clients who are the smaller ones compared to the people that they’re buying from, right? So you may have someone who’s a reseller from large manufacturers, global manufacturers, who won’t even answer my questions, Eric, about modern slavery but I said, “well look, they are so big that there’s enough information out there for you to see how well they’re dealing with this issue.” So let’s look at this through a more realistic lens. Let’s do some desktop due diligence. Let’s ask some questions and let’s get there with recognising you may not have the same power, but isn’t necessary in this context because they are subject to higher levels of regulation, they are subject to public markets, they are subject to a little bit more that is giving you the same results that you would have received if you had more leverage, right? So, there’s other parties in this relationship that have leverage that are getting to the results you want. |
| 00:52:47 | DT: | I love the way you put that, that turn of phrase, “they’re in privity to us,” that both from a UN guidelines perspective, but from a moral imperative, what do we owe this person? I think that’s a really great way to think about it, not just what are we putting in our statement that we’re going to give to the Attorney-General? What do we owe that person? And just to go back to what we were saying before, I think it’s a great point you made that when there are these exigencies, these geopolitical factors, yeah, someone might say, “oh, well, that’s a reason to be less diligent.” No – If you’re thinking about it as a risk management exercise, this is the sort of event that turns up the dial on the likelihood of that risk occurring, right? So it’s a time to be more diligent, not less, but only if you’re thinking about it as a risk management exercise and not just as a compliance exercise. |
| 00:53:35 | EB: | And that is usually how I ask people to reframe their thinking about this. Stop thinking about this as “a report I have to issue six months after my reporting year and I have to be compliant in that regard.” No, the measure is you are reporting about seven reporting criteria where they want to see actions. They want to see what you have done to assess, identify, and mitigate that modern slavery risk. They just don’t want you to report if you’ve done nothing. They don’t want to hear that. They don’t want to see that, right? And so, look, I think people just need to stop putting that mere compliance lens on it and I think about it from our standpoint as lawyers, where we have paramount duties, right? What is your paramount duty here, right? And I think increasingly with the three year review – and we helped some people with submissions as part of that three year review and that consultative process – we said to them there was increased focus on the victims. What are we doing to remedy the wrongs that have been done? What are we doing to create, maybe a fund, to help look after these victims? And I think there was an increased victim focus, and the whole idea of the Office of the Anti-slavery Commissioner, even in New South Wales, there’s been an increased focus on what becomes a lost issue here, right? Like a lot of times we’re thinking about it from a very large corporate standpoint of policies, procedures, but there are real people impacted by this that we are trying to protect, save, and we’ve got to remember that needs to be applied as well. There’s a reason why the modern slavery acts definitions are tied to the Criminal Code. There are people being harmed because of this. So you need to apply that lens in that thought process too to deal with, like you said, that imperative, right? The imperative for action. |
| 00:55:11 | DT: | Yeah, and I suppose within the Australian context, one method of redress, it’s fairly recent, is the workplace justice visa program. TIP: The Workplace Justice Visa, which I just mentioned is a new initiative recently designed to protect exploited migrant workers in Australia. This visa allows workers who faced labour violations like underpayment, harassment, threats from their employers, to stay in the country temporarily with work rights while they seek justice. It was developed through the Breaking the Silence proposal by the Migrant Justice Institute and the Human Rights Law Center and the visa program aims to empower vulnerable workers by providing a safe way to hold exploitative employers accountable without fear of visa cancellation. To be eligible for the Workplace Justice visa, applicants have to be in Australia already on a substantive temporary visa that already has work rights and have a government certified claim of workplace exploitation. There are a number of organisations that can certify a claim, like the Office of the Fair Work Ombudsman, a number of different unions, like the Australian Workers Union, the AWU, as well as a number of community legal centres, like the Redfern Legal Centre, the Migrant Workers Centre, the Human Rights Law Centre, and the Western Community Legal Centre, and an applicant has to demonstrate that staying in Australia is necessary to pursue their case against their former employer. Applicants also have to meet health and character requirements, be able to support themselves while they’re in Australia and any of their dependents, have adequate health insurance and no significant debts to the Australian government through, for example, Centrelink. This visa reflects Australia’s commitment to upholding workers rights and addressing modern slavery, but I think you can hear from some of the requirements for the Workplace Justice visa that there’ll be many practical limitations to exploited workers relying upon it. Eric, before we run out of time with you, though, I do want to ask you about the three year review and the bill that’s just passed through the House in May of this year – the Modern Slavery Amendment (Anti-slavery Commissioner) Bill. That is the culmination of the work that’s come from the three year review. Can you tell us a little bit about the amendments, they’re not proposed amendments anymore, they’re coming into effect? |
| 00:57:14 | EB: | Yeah look, largely, like I said, you saw a lot of comments coming from different sectors in connection with the three year review, the amendment process, I think the largest thing that made people want to see the threshold drop. Many people wanted to see even a template provided with regard to the statement. People wanted a more template-ish approach where people would just number their responses 1, 2, 3, 4, 5, 6, 7 in response to the reporting criteria, which I don’t think is the most readable document in the world in my mind or the most efficient from a stakeholder engagements piece. |
| 00:57:43 | DT: | I was going to say, that sounds like it would be counterintuitive to some of the work you’re doing. |
| 00:57:47 | EB: | Well, I think it also diminishes the document as a stakeholder engagement piece and I think for that, I also think we fail to recognise, I guess, the powers that we’re trying to give these stakeholder groups to manage, and I don’t think it creates a readable document, and especially when there’s so much crossover between your responses on the different reporting criteria. This is someone who looks at this on a regular basis, so I guess I’m seeing where something doesn’t fit neatly just into one reporting criteria. So look, at the end of the day, I think we didn’t see a lot of those measures enacted that people were seeking or didn’t see the lowering of the threshold but I think we saw the establishment of the Office of the Anti-slavery Commissioner, which is a particularly important thing, the whole idea of really giving somebody with powers and how do we support that office? How do we really get them moving in that regard? And I think that has been incredibly important – that whole idea of victim focused, the whole idea of the aid in the victims, really came out with regard to what we want to see that office do, and the whole idea of victim support. And I’ve seen – even with regard to the New South Wales Anti-slavery Commissioner – I’ve seen that effort where there has been an increased spotlight and focus on victims of telling their stories without re-traumatising them, and we got to be thankful as we put the focus on victims, we’re going to put them forward for the storytelling process and that’s a constant process, I think, to give people a face to modern slavery, but we also have to be careful enough to re-traumatise victims as part of our desire educate larger swaths of the population. So that is what we’re seeing there but that is the large and short seeing with that amendment. Look, I think we’ll see more to come. I think it is also hard to introduce legislation, especially the timing. Like I said, timing is critical, right? When we saw the UK Modern Slavery Act, it didn’t necessarily combine with the general awareness of modern slavery. I think it combined well when we introduced our modern slavery act and the timing was perfect but then also the timing of the amendment process in the midst of so much that was going on with regard to them, there was just so much pressure on business that you have to think from a regulatory standpoint, how much more pressure do we put on businesses? Do we lower the threshold and put this further reporting obligation on businesses when so many are struggling? So, timing is everything in relationships and in regulation, so you’ve got to think about that. TIP: Now Eric just mentioned that the Modern Slavery Amendment Bill is poised to establish a Commonwealth Anti-slavery Commissioner as an independent statutory office within the Attorney General’s portfolio. Once the bill receives royal assent – it hasn’t at the time of recording – this Commissioner will play a crucial role in raising national awareness of modern slavery, engaging with Federal Government agencies and guiding the implementation of future reforms aimed at combating modern slavery in Australia. The Commissioner’s main functions include assisting Australian businesses in identifying and addressing modern slavery risks within their operations and supply chains, promoting engagement with victims of modern slavery and leading education and awareness issues about modern slavery, but the Commissioner will not have investigative or enforcement powers, notwithstanding advocacy from NGOs and academics for a stronger mandate in this area, but maybe there’s potential for these powers to evolve over time in future amendments. We can expect the new Commonwealth Commissioner to work pretty closely with the NSW Anti-slavery Commissioner who already plays a significant role in advocating for action against modern slavery in this state. Businesses, especially those that supply to the Commonwealth Government and its agencies, should prepare for increased scrutiny and engagement regarding their modern slavery risk management practices. The Australian Government has already allocated some funding to support the establishment of the Anti-slavery Commissioner, including $8 million over four years and an additional $2.5 million specifically for auditing government supply chains. This funding complements some other initiatives related to modern slavery, such as the Forced Marriage Specialist Support Program and the Speak Now Project, which aims to prevent forced marriage through education. |
| 01:01:35 | DT: | Look, we could talk about this for another hour, but we’ve got to let you go. Before I do, though, it strikes me that you’ve achieved the dream that a lot of law students have, right? Which is, a lot of people go to law school to change the world, to do something good for their fellow man, to have a positive impact on the world and so many of us come out of law school having not necessarily achieved that goal and instead going into a corporate practice area that doesn’t have as much of an immediate impact on the world, but you’ve managed to find a way to combine those two. You’ve had this focus on ESG, which, as we said at the top of the episode, predates your extensive legal experience, and you’ve brought that into a commercial practice that’s having a real impact on the way Australian businesses, and businesses around the globe, look at their modern slavery exposure. If you had a tip for young lawyers who are listening, law students or recent graduates who want to go down the path you did, whether that’s a focus on ESG in the law, or I guess more broadly, having a positive impact in a commercial practice area… What would that tip be? |
| 01:02:39 | EB: | Look, always pursue your passion and find that alignment with your passion and your purpose. I can say that I never saw, probably this, coming into my nine to five day to day practice ever. It was just me really pursuing issues that were of concern for me, and when I worked on Wall Street, it really was just me sitting alongside of this. It was insane days on Wall Street, as you can imagine, and this was fitted into the crevices, oftentimes encroaching on my personal life to be able to do the stuff that I was doing at a UN level but I found ways to kind of do that. I think when you find your passion, stick to it. Your studies actually translate, find those areas of law that you want to study, you want to keep on studying because it requires a lot of reading – a lot of keeping up to be across multi-jurisdictional regulatory landscapes – it requires a lot of reading. So it needs to be something that you care about, and then the intersectionality will come. You will start to recognise how things have touch points. I mean, that’s the beautiful thing about lawyers, right? We’re issue spotters. We see where the issue, maybe, cuts in another way. So I think when you start to recognise the intersectionality, you can build it out. And listen, a lot of times it was even amazing to me, even when I was practicing in New York, I remember there was a partner who was made at my firm, but he was known for animal rights law, but he was an M&A lawyer, but he was also an adjunct professor at NYU for like animal rights, and it was the whole idea where that just raised his profile. So the firm was actually quite supportive of it, right? And there’s also ways for you to be a good firm citizen, and to do this work as a pro bono basis, right, and that also can help raise your profile within the firm. And before I was doing this as part of my practice, I mean it sat along as a pro bono practice where I was doing this stuff for IJM and my board membership and that was supported by my firm and that was acknowledged, and then another firm that I was at prior to Madison Marcus, I was the head of the pro bono work that also sat alongside my private practice. So look, it is a lot of hours that go into this, but when it’s your passion, you find the time. |
| 01:04:40 | DT: | Absolutely, yeah. You’re not going to find that dream job that combines passion and purpose on day one in practice, maybe, but if you find a way to pursue that through your pro bono work, and there’s loads of ways to do that, you can volunteer at a community legal center, you can get involved in law reform efforts through your state law society or law institute, or through your local young lawyers organisation, there’s loads of ways to pursue that passion outside of your day job and one day translate that into a combination of passion and purpose just like you’ve done, Eric. |
| 01:05:10 | EB: | And look, I’m such a big advocate of pro bono and I increasingly respect the firms that are building out their work that they offer through their pro bono divisions but look, it is such a brilliant way for you to build out your capacity, your learning, your client engagement, understanding the commercial context… You get so much more visibility and at such an earlier stage, because there’s so much more responsibility they will give you typically in a pro bono matter than they will give you maybe in connection with another matter for the firm. So appreciate those opportunities, get there, grow yourself, build out your own capacities, and then you will start to recognise the connectivity and figure out how to build out this in your private practice or your larger, more commercial practice, I should say. |
| 01:05:52 | DT: | Absolutely. Couldn’t agree more. Eric Boone from Madison Marcus, Thank you so much for joining me on Hearsay. |
| 01:05:56 | EB: | Pleasure. |
| 01:06:07 | DT: | As always, you’ve been listening to Hearsay the Legal Podcast. I’d like to thank my guest today, Eric Boone from Madison Marcus for coming on the show. Now if you want to hear another episode about a looming regulatory issue that could crop up if you’re doing corporate advisory work, check out our episode with Alec Christie on proposed changes to the Privacy Act following the Attorney General’s review. That one’s called The Privacy Parables II: The AG’s Privacy Report and the Future of Privacy in Australia. That’s episode 91 of Hearsay. If you’re an Australian legal practitioner, you can claim one continuing professional development point for listening to this episode. Whether an activity entitles you to claim a CPD unit is self assessed, as you well know, but we suggest this episode entitles you to claim a substantive law point. More information on claiming and tracking your points on Hearsay can be found on our website. Hearsay the Legal Podcast is brought to you by Lext Australia, a legal innovation company that makes the law easier to access and easier to practice, including your CPD. Before you go, I’d like to ask you a favour, listeners. If you like Hearsay the Legal Podcast, please leave us a Google review. It helps other listeners to find us and that keeps us in business. Thanks for listening and we’ll see you on the next episode of Hearsay. |
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