Essential ESG: Episode 4 – Gender and modern slavery

Phoebe Wynn-Pope, Head of Responsible Business and ESG

Heidi Roberts, Partner, Responsible Business and ESG

Phoebe: Welcome to the Essential ESG podcast, being brought to you from the lands of the Wurundjeri people of the Kulin nation. Today I’m going to be talking to you with Heidi Roberts, a partner in our Responsible Business and ESG group, about the gender issues of modern slavery. Good morning Heidi.

Heidi: Good morning Phoebe great to be here.

Phoebe: The Australian Modern Slavery Act requires businesses to identify, assess and address the risks of modern slavery in their supply chain and in their operations. Why is this an important thing for us to be thinking about?

Heidi: Well, over the past couple of years, organisations in Australia have been really focused on developing, implementing and improving their compliance and reporting activities and I think it is always important to really focus on the risks to people and keep at the forefront of our minds what modern slavery is and how it manifests in people’s lives, not just in compliance systems. It’s only then that we can ensure our due diligence systems are looking for and finding the right sort of risks and it is a sad fact that modern slavery is a gendered issue, and women are disproportionately affected by modern slavery. It’s estimated around 71% of people who are victims of modern slavery are women globally.

Phoebe: Why is that the case? It seems a lot.

Heidi: Yes well I think when you consider the key risk factors for modern slavery you can see that some of these risk factors are heightened for women. Women have around the world have lower access to education, women are over represented in casual, low paid and unskilled work globally and then you can look at particular industries where those factors combine with other vulnerabilities – working alone, working at night, working in remote communities, circumstances where you have got a lot of migrant workers who have not necessarily the local language skills and might be fearful of authorities or not have a full understanding of the rules and when you package all that together all those overlapping vulnerabilities, some of which are heightened for women, some in industries where women make up a large proportion of the workforce, you can see that there’s this heightened exposure to risks of modern slavery. If we look in Australia we can think of industries like cleaning, fast food production, catering, hospitality where a lot of those risk factors are present. Further abroad, women working in the garment industry producing say uniforms, corporate uniforms and in fact producing PPE or packaging for pre-packaged goods are other examples.

Phoebe: So women are also more likely to be employed in domestic services where they might be working in private residences or private businesses where they might have little regulation on wages and conditions. They might be living with their employer and they might have to pay for their accommodation and also be recruited by labour recruiters to be put into those sorts of positions in the first place which makes them vulnerable and also obviously women are at increased risk of certain types of slavery like sexual servitude and human trafficking, forced marriage. So the risks of those sorts of domestic servitude and forced marriage are particularly interesting I think in the context of corporate supply chains because they don’t immediately come to mind and yet we know that often employee benefits, particularly for expatriates, might include domestic workers and support in that sort of way and it is definitely something that organisations need to be thinking about.

Heidi: It is and our risk assessment tools need to be robust enough to be able to identify and encompass those aspects of risks of modern slavery and I think they need to be able to respond to change over time. So as the way in which you work, the way in which your suppliers work changes our risk assessments need to pick that up and I think an obvious big change which has had an impact has obviously been COVID-19 which has exacerbated some risks of modern slavery and operations and supply chains and a number of those impacts have disproportionately affected women again and so perhaps we can talk a bit about how that is manifested.

Phoebe: Absolutely. I think there are some really obvious things and you mentioned them earlier that real beef up because of COVID of the global demand for certain products, PPE for example which has really increased in certain sectors and certain factories that increased need for PPE has resulted in factories being open around the clock, not a lot of supervision, not necessarily additional employees being available and the amount of time that people are working – a whole range of employment conditions that have really deteriorated.

Heidi: Yes in the context where customers are demanding more, often wanting to pay less and needing it provided more quickly because we are in a crisis and we need it. That’s the flow on impact, that pressure on your suppliers has on heightening the risk of modern slavery.

Phoebe: That’s right and I think that that’s where often when you are looking at your suppliers and at your work practices you can see how you might actually contribute to practices of modern slavery by the demands that you put on your suppliers in certain instances. The flip side of it of course was that in COVID a lot of orders were cancelled. So the garment industry in Bangladesh which has more than 4,000 factories and over five million workers, 80% of whom are women, found that they had orders cancelled to the extent that 1,150 factories were in limbo, almost $3 billion worth of orders were cancelled - 2.8 million people suddenly out of work and really facing extreme poverty and hunger directly as a result of the types of imperatives that western clothing and apparel industry manufacturers felt that they had to do in order to survive and so we see this linkage across the world of these global supply chains and the impacts we have and very often on some on those industries where women are the majority workforce.

Heidi: Yes and interestingly I think the Australian Government in sharing its expectations with organisations about reporting under the Modern Slavery Act didn’t respond by lessening the requirements, but has made it very clear that this legislation expects organisations to step up and to build a deeper understanding of the risks of modern slavery in this fast-paced change to understand how impacts on their operations or actions they are taking in response to a crisis, how does that actually change or increase the risks of modern slavery in their operations but down through the supply chains – and it won’t be enough to say Oh I had to respond quickly to act to market forces and as a result increased the risk of adverse human rights impact. The expectation is to respond quickly to market forces and identify how that changes the risk and take steps to mitigate the risk.

Phoebe: Absolutely and we’re seeing even just recently in the last couple of weeks a direct impact of some of these things. So in the US the customs and border protection issued a withhold release order against a particular Malaysian supplier of rubber gloves because they had identified that there was modern slavery in the operations of that particular supplier. That supplier is a key supplier to an Australian company who made statements – disclosures – to the market and their share price dropped by 20%, so these issues are very real issues and they have very real impact.

Heidi: This leads to an observation we’ve discussed recently, Phoebe, that we haven’t yet seen organisations reporting on modern slavery risks with the disaggregated data set based on gender.

Phoebe: And I think it is really interesting and I think it is a way of the future that organisations will need to start doing this. We haven’t seen any gender analysis of supply chains in modern slavery statements to my knowledge – recognising that there are thousands of them and I have read a lot but I haven’t read all of them – and we know that modern slavery impacts women, men, boys and girls in different ways. For example I think we’ve already talked about the fact that girls are more likely to be trafficked or forced into forced marriage and domestic servitude for example and boys are more likely to be forced down in artisanal mines those sorts of things and that sort of dangerous work. So we see those gender impacts and those gender risks, but there isn’t very much analysis and thought going into what that means in terms of different sorts of agenda responses. But then that’s the relatively new thing across the board right – you’re thinking about all sorts of different responses to gender issues in the workplace.

Heidi: Yes and I would expect that we are likely to see government procurement lead in this space and we’ve seen federal governments in particular work very closely with their suppliers and really encouraging very quickly quite robust development of systems to identify, assess and address risks and reporting of that by suppliers back to government whether they’re regulated by the Modern Slavery Act or not. But we also see the Federal Government and State governments requiring their suppliers to report on compliance of the Workplace Gender Equality Act, governments have really led the way in terms of driving procurement from First Nations Australians businesses and so I think that combined also with a lot of movement in the market requiring disclosures, ARCD guidelines really asking directors to be far more knowledgeable and transparent about gender issues in their organisations, I think that is something we will see come and I would expect that government procurement will likely lead the way.

Phoebe: I think that all these gender issues and thinking about key legislation and key requirements like procurement and like modern slavery through a gendered lens is a very interesting thing to be direct. It’s clearly time for organisations to think more about gender equality in their workplaces and in their supply chains and in their operations to build a future that is going to be more sustainable for all people.

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