PRI launches investor statement in support of Australia modern slavery act
The Principles for Responsible Investment (PRI) today called on Australian investors to sign a statement in support of the establishment of a Modern Slavery Act in Australia by the Joint Standing Committee on Foreign Affairs, Defence and Trade of the Parliament of Australia. HESTA, IFM Investors and Cbus were among the first to sign the statement.
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, reputational damage and may also harm a company’s license to operate.
Speaking to pension fund representatives at the Conference of Major Superannuation Funds at the Gold Coast, PRI Managing Director, Fiona Reynolds, said Australia had much to gain from legislation on modern slavery and could learn from best practice across the globe.
Ms Reynolds said examples of human rights legislation that were making a difference include 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, she said.
“Human rights issues can present potential financial impacts through reputational damage and operational risks to portfolio companies,” said Ms Reynolds. “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.”
Chris Newton, executive manager, IFM Investors, which has $75 billion 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,” Mr Newton said.