The Government is being urged to move swiftly on plans to tackle modern slavery through a new law, as Covid-19 worsens fears about forced labour practices around the world
Consumers are increasingly conscious about the climate change impacts of the products they buy – but does that extend to whether something in your shopping cart is a product of forced labour?
Some of the tinned tomatoes and disposable gloves that make it to our shores have been implicated in concerns about labour practices, as investigations from Newsroom’s business editor Nikki Mandow have shown, and Chinese-sourced cotton could be next on the list.
Concerns about cotton and other products sourced from Xinjiang, where the Chinese government is alleged to have placed Uyghur Muslims into forced labour camps, have led to the US, UK and Australia taking action to ensure companies were not benefitting from modern slavery practices in the region.
All three countries also have dedicated modern slavery laws, designed to make businesses report on the potential risks of forced labour in their supply chains and what they are doing to address them.
New Zealand has no such legislation, but the Government is indeed interested in the issue: among Labour’s manifesto commitments during its 2020 campaign was a pledge to explore “the implementation of modern slavery legislation in New Zealand to eliminate exploitation in supply chains”.
But why is such a move necessary – and are our politicians moving fast enough to make it a reality?
“I’ve talked to many CEOs who have said to me, ‘Look, you know, this isn’t an issue in our backyard, this is not an issue in our supply chains’, and, I look at them with some degree of surprise, because I don’t believe many of those companies actually really know, because they haven’t looked at it enough to actually be able to make that statement confidently.”
Rebekah Armstrong, the head of advocacy and justice at World Vision, is among those calling on the Government to move ahead with modern slavery legislation. She told Newsroom it was important for New Zealand to keep pace with a global move towards due diligence laws for supply chains.
There were approximately 40 million victims of slavery in the world right now – more than at any other time in history – and about two-thirds of those were in the Asia-Pacific region, Armstrong said.
Kiwi companies with supply chain operations in Bangladesh or China, or who worked in the garment industry, were at higher risk when it came to modern slavery but every sector and company needed to be alert for potential wrongdoing.
New Zealand businessman and former Air New Zealand CEO Rob Fyfe, who in 2018 warned the country’s international reputation was at risk if it did not act more strongly to tackle modern slavery practices in supply chains, told Newsroom his involvement in the Bali Business and Government Forum on forced labour had sparked concern about New Zealand’s position compared to other nations.
Given the challenges New Zealand businesses faced to address issues like climate change and sustainability, there was a risk of due diligence around modern slavery dropping down their list of priorities without government legislation.
Fyfe said a number of Kiwi companies were leading the way on forced labour risks, but others were “putting their head in the sand” when it came to the issue.
“I’ve talked to many CEOs who have said to me, ‘Look, you know, this isn’t an issue in our backyard, this is not an issue in our supply chains’, and, I look at them with some degree of surprise, because I don’t believe many of those companies actually really know, because they haven’t looked at it enough to actually be able to make that statement confidently.”
The Covid-19 pandemic, and the associated disruption for global supply chains, has created an added complication for businesses trying to tackle modern slavery.
During his time as chairman of New Zealand-based clothing company Icebreaker, Fyfe said he would personally visit any new factory overseas with an audit team to assess its labour practices before starting business with them – something off-limits to businesses in a time of closed borders and restricted travel.
Armstrong said workers in insecure employment through supply chains were disproportionately affected by Covid-related lockdowns and business closures, with concerns the pandemic could push millions more children into child labour around the world.
New Zealand had the potential to lead the world by combining three separate but related areas of concern – transparency in supply chains, modern slavery, and human rights due diligence – into one piece of legislation, she said.
Fyfe said it made sense for any New Zealand law to align with the rules in Australia, given the two countries were close trading partners and companies operating in both would want to avoid unnecessary duplication of effort.
Any penalties in legislation would need to strike a balance between ensuring businesses felt comfortable to report and identify issues within their supply chains, and providing sufficient motivation for action due to the consequences.
“It’s no different to the conversation that’s going on today around Covid breaches: if the enforcement action is too strong, then actually you force the issue underground and people don’t bring it to the surface, but if there’s no consequence to the issues, then the risk that people take advantage of the situation, those instances grows.”
Modern slavery regime ‘a collaborative act’
In 2019, Armstrong launched Business and Human Rights Consultants to help New Zealand businesses comply with their reporting requirements under Australia’s modern slavery legislation.
While the rules were “overwhelming” at first, the businesses who had gone through the process there were among the most enthusiastic about a similar law change here.
“Once you get into the process … it’s quite a collaborative act – it’s not about trying to name and shame, it’s not about finding every single risk to your business, it’s about identifying and prioritising the main risks.”
Fyfe said Icebreaker had benefitted from its self-initiated transparency reporting several years ago, when it identified that some of the factories it was contracting work to were in turn outsourcing some of that work without the company’s knowledge.
“That was only flushed out when we started doing this transparency work, so it immediately highlighted the need for us to go and spread our audit net far wider than what we’d traditionally been doing.”
Workplace Relations and Safety Minister Michael Wood told Newsroom the Government remained committed to exploring modern slavery legislation, and he intended to make a decision on whether to proceed by the end of the year.
“For any country that’s engaging in international supply lines, it has to be a serious question as to whether you just accept it, or whether we do whatever we can eliminate that exploitation.”
Labour’s campaign commitment to consider a new law came from its commitment to workers’ rights in New Zealand and abroad as well as a “core ethical perspective” about the millions who were victims of modern slavery practices, Wood said.
“For any country that’s engaging in international supply lines, it has to be a serious question as to whether you just accept it, or whether we do whatever we can to eliminate that exploitation.”
He was receiving advice from officials and speaking to international experts to understand how effective a law would be in practice, given New Zealand was already signed up to a number of forced labour protocols.
If the Government did decide to move ahead with new legislation, it would need to consider the revenue threshold at which businesses were required to report on their practices, as well as whether to appoint an independent commissioner to oversee the system, as was the case in the UK.
In a separate but related piece of work, Wood said the Government was set to release the final version of its Plan of Action against Forced Labour, People Trafficking and Slavery later this month.
But Armstrong warned swift action on a modern slavery law, rather than mere consideration, was essential given the time the drafting and legislative process would take.
“It’s not going to happen overnight, particularly if we’re going to have a really strong, robust law as it’s going to require a lot of consultation and a lot of experts feeding in.”
