Will Australia’s modern slavery law cause you to lose a key client or contract?

Aussie businesses should prepare now for modern slavery legislation

If your marketing and business development teams are high-performing, how they spend their time in between major pursuits will be as valuable as what they do when they’re immersed in a bid.

An advantage of this so-called ‘downtime’ is it provides an opportunity to maintain and improve the bid function such as by refreshing your templates, producing new case studies, and updating boilerplate content so it is recent and compliant.

One change your marketing and BD teams should be preparing for right now is Australia’s imminent Modern Slavery Act. New legislation is expected to pass this year and to follow the UK blueprint which was enacted in 2015.

What does modern slavery have to do with marketing?

A large focus of the new legislation will be to identify and address slavery in the supply chains of Australia’s largest private and public sector organisations. When it commences, it will be mandatory for enterprises with revenue exceeding $50 million to report annually on the measures they have taken to ensure there is no slavery in their supply chains. These statements will require board level (or equivalent) approval.

Global law firm Herbert Smith Freehills’ 2017 Statement serves as a good example.

Despite the minimum $50 million turnover, businesses of all sizes stand to be affected by the legislation for two reasons:

Firstly, is anticipated that all levels of government will soon after cease to procure from any enterprise that does not comply with the legislation and complete an annual modern slavery statement. Hence, to protect and win local, state and federal government contracts you may be compelled to voluntarily fall in line.

Secondly, if your organisation provides goods or services to large corporates – organisations that do generate more than $50 million per annum – your clients will expect you to comply on the basis that you represent a link in one of their supply chains. By and large, these large corporations also now procure by way of competitive tender.

In the two years since legislation was enacted in the UK, Rio Tinto and Nestle have identified and disclosed forced labour and other human rights abuses in their supply chains. Those entities, and countless others like them, are now putting their current and prospective suppliers under intense scrutiny.

How can your marketing and BD team prepare?

It will be far easier to prepare in advance than to be grappling for input and approval when confronted with a deadline. Forward-thinking marketing and business development teams will start the research and consultation process now. Knowing the Australian legislation will be modelled on the UK Act, it is not difficult to anticipate the questions you might encounter down the track. Questions such as:

  • What is your firm’s modern slavery policy?
  • How deeply into its supply chains does your organisation investigate? Provide an example of one of your organisation’s supply chain maps.
  • Where in your supply chains is your organisation most at risk of identifying modern slavery?
  • Document the steps you have taken to assess and manage that risk.
  • How many of your suppliers are located outside Australia?
  • List your offshore suppliers by country.
  • How do you keep abreast of the reporting, regulatory and licensing obligations of each jurisdiction in which your suppliers are located?
  • What, if any, additional higher standards does your organisation impose on its suppliers, both domestic and offshore?
  • What evidence do you have that each of your suppliers’ suppliers satisfies their jurisdiction’s reporting, regulatory and licensing obligations?
  • How many (what proportion) of your offshore suppliers have you physically visited as part of your anti-slavery vetting process?
  • If you do not physically visit all offshore suppliers, how do you identify modern slavery risk and vulnerability?
  • Changing environmental, political and market conditions can impact the behaviour of suppliers. What is your process for periodically revetting existing suppliers?
  • How do you educate and train management, staff and suppliers about the issue of modern slavery and your organisation’s policy and procedures to identify and address it in your supply chain? Provide examples from the past 12 months.

Not being able to satisfactorily answer questions such as these could render your next bid non-compliant and even contribute to you losing an existing contract or client.