Who cares about the Modern Slavery Act now?
You should – and here is why…
One key reporting requirement of the Modern Slavery Act 2018 (MSA) is for organisations to show evidence that they have a policy and have identified their modern slavery risks. And for the first organisations, the first deadline in the MSA Act is not far away – 1st July, for compliance. Assessing these risks in wide and complex supply chains can seem like an overwhelming exercise, and many had things well in hand pre-crisis even though they were working across mostly thousands of suppliers operating in so many different countries?
But, given the crisis and organisations desperation to survive, are they really so committed to the MSA initiative now? Some have suggested, it may just become a box-ticking exercise now.
Yet nobody is letting us off the hook – MSA is still the law, and Australian business nothing but compliant. Never mind the moral compunction to act, which so many felt, as the issue gained a high-profile this last two years.
In any practical conversation with procurement practitioners they voice a number of concerns on implementing MSA on the ground, not least:
- One early problem is the challenge of communicating MSA issues and actions within a decentralised business model – in the current crisis, so many colleagues have other priorities.
- A second common issue is the poor completion of surveys by suppliers (and their suppliers too) – how to get them to submit the data our strategies (and compliance) need?
- Thirdly, risk assessment has to be prioritised and segmented – by industry. How can we comply to a common standard across all suppliers, when the risk assessment work can be so pointed (by industry)?
- Fourth – the ever present problem of engaging our supplier’s suppliers and the best way to approach a multi-tiered supply chain – sometimes without the 100% commitment and support of our primary tier one supplier?
- Fifth, how do we win the argument for resources to help address the large amount of work required to make a difference, let alone comply with MSA right at the moment?
Finally, where to find information on your own supply chain? – data, supply chain mapping, information, supplier ownership data, benchmark comparisons and so on?
All these issues sort into FOUR principal issues with MSA – according to KPMG in their summary slide:
Three factors should now influence your prioritising of your issues:
- the SCALE of any impacts, the SCOPE of impacts, the EASE of remedy of any impacts.
But the key question still is, why should the MSA issue still be high priority for organisations that might be struggling to survive during or after the post-pandemic crisis?
In short, the answers are clear:
- That mandatory compliance is not actually optional, but the law!
- Brand reputational damage was still prevalent as a very real issue that has not diminished if slaves are found in your supply chain
- Investors still have demands – certainly in high-risk industries, and for some organisations more than others.
- Customers have demands and often vote with their wallet of course.
- Staff and other stakeholders, including suppliers, also have a say when poor records on human rights issues become prevalent.
Aligning these interests with your business drivers is recommended. Modern slavery is a much bigger issues in some places than others.
For instance, assessing risks by region, by country, by sector, by industry, by supplier can help. You quickly can highlight risky segments of your supply chain than others.
Risk mapping workshops by supplier, by industry, by sector, by category and by region or country is an essential first step for many.
This workload might be shared with the new post-crisis priority of reassessing security of supply RISKS on inbound supply chains – which many procurement managers might be undertaking?
Further steps often include solutions such as using risk indicators, external data streams, media monitors, supplier evaluation systems, third party risk modules, revised processes, company reports.
In summary then: “alignment – policy – information – risk – priority – action” is a useful way of thinking through steps on MSA implementation. And it can be done quickly if needs be.
Just because Covid-19 has dominated our lives for the last three months, though, does not mean we are off the hook from mandatory compliance and the law of the land.