PRI submits investor statement in support of introduction of Australia Modern Slavery Act
The PRI has submitted an investor statement in support of the establishment of a Modern Slavery Act in Australia to the Joint Standing Committee on Foreign Affairs, Defence and Trade of the Parliament of Australia. Australian funds HESTA, IFM Investors and Cbus led the initiative while the statement was signed by 38 organisations representing US$2.17 trillion in assets under management.
The International Labour Organization (ILO) estimates that almost 21 million people globally are victims of modern slavery. In Australia, migrant workers are found in forced labour across a number of sectors including agriculture, construction, and hospitality. The discovery of forced labour in company operations and supply chains can present a number of financial risks, most notably supply chain disruption and reputational damage. It may also harm a company’s license to operate.
PRI managing director, Fiona Reynolds, said “Human rights issues can present potential financial impacts through reputational damage and operational risks to portfolio companies – a Modern Slavery Act would improve transparency on how companies operating in Australia are managing modern slavery risks in their operations and supply chains. It would also help investors make informed investment decisions and engage with companies to mitigate these risks.”
The statement highlights examples of human rights legislation and frameworks from across the globe including the California Transparency in Supply Chains Act; the UK Modern Slavery Act; the EU Non-Financial Reporting Directive; and the French Corporate Duty of Vigilance law and international law; the UN Guiding Principles for Business and Human Rights; the ILO core labour standards; and the OECD Guidelines for Multinational Enterprises. Early evidence shows that both the California and the UK legislation are improving availability of information for investors, while increasing senior level corporate engagement, transparency and action on modern slavery. An Australian act would complement these efforts.
Chris Newton, executive manager, IFM Investors, which has $75 billion in AUM, agreed that the act would provide long-term benefits for companies, investors and workers.
"The global challenge of modern slavery is just as much an investment issue as it is a human rights issue – if investors are not active in their stewardship there will be negative financial implications, whether it's from increasing regulatory oversight, fines and legal proceedings or staff turnover.”