​With the introduction of Australia’s Modern Slavery Act 2018, many organisations are starting to measure social impacts, evaluate human rights commitments, and assess the risks of modern slavery across operations and supply chains. This, of course, generates multiple questions as well as frequent requests for the ‘right’ resources.
‘Modern slavery’ describes situations where offenders use coercion, threats or deception to exploit victims and undermine their freedom; it is a term used to describe situations of serious exploitation which may include debt bondage, forced labour, forced marriage, human trafficking, servitude, slavery, and the worst forms of child labour. The term does not include practices like underpayment of workers or substandard working conditions, although these practices are also harmful and may be present in situations of modern slavery. It is estimated that today there are over 40 million people in conditions of modern slavery worldwide, with up to 15,000 people in Australia impacted.

As the Commonwealth Modern Slavery Act entered into force on 1 January 2019, it established a national Reporting Requirement that applies to larger organisations in the Australian market with annual consolidated revenues of at least AUD$100 million; a requirement which supports the Australian business community to assess and address their modern slavery risks, and form and maintain responsible and transparent supply chains.
These larger organisations required to comply with the Reporting Requirement must prepare annual Modern Slavery Statements; others may choose to report voluntarily to demonstrate ‘best practice’ or meet client obligations, while smaller and medium-sized organisations are already being asked to provide information to help larger businesses demonstrate the ‘continuous improvement’ that underpins the Act.
Some organisations have been gathering this information for years, either because they are leaders in this field, demonstrating their ethical procurement and supply chain transparency, or because they already report in other jurisdictions such as the UK. But many others feel that they are ‘late’ to the conversation, and need some of their key questions answered as well as resources to help them understand and improve. Let’s take a look at five frequently asked questions and relevant resources:
 
Question 1: How can I communicate to managers and board members what our reporting should look like, what needs to be in our Statement, and when it should be completed? Or at least what our clients will need to report on, and so what they’re asking us about?
Answer: It’s probably most helpful to look at the ‘Guidelines for Reporting Entities’ produced by the Modern Slavery Business Engagement Unit within the Australian Border Force, that sets out the context, format and timelines for reporting. In summary, reporting should follow seven criteria, and an organisation’s modern slavery statement should be submitted to the Australian Border Force within six months after the end of their reporting period as well as clearly published online. With extensions to allow for COVID-19 disruption submissions must be made by 31 December 2020 for organisations reporting to a Foreign Financial Year (1 April to 31 March) and by 31 March 2021 for organisations reporting to an Australian Financial Year (1 July to 30 June).
Resource: The ‘Commonwealth Modern Slavery Act – Guidelines for Reporting Entities’ can be found at https://www.homeaffairs.gov.au/criminal-justice/files/modern-slavery-reporting-entities.pdf
 
Question 2: One of my organisation’s key modern slavery risks is around labour and recruitment – specifically connected to migrant workers and those recruited overseas. How can we move towards ‘best practice’ in this area rather than just reducing our risks?
Answer: To start, it’s helpful to prioritise in terms of ‘risk of harm to people’, rather than the usual ‘likelihood of something occurring’ or ‘risk of reputational damage’. It’s also useful to think about ‘Responsible Recruitment’ as underpinning everything you do – whether in Australia or oversea – to ensure that every element is covered. In this way you can make sure that policies and procedures are inclusive, waves are paid regularly, directly and on time, and the right to worker representation is respected.
Resource: The Dhaka Principles provide a roadmap that traces a migrant worker from recruitment, through employment, to the end of contract, with key principles that employers and migrant recruiters should respect at each stage of the process to ensure migration and employment with dignity. ‘Core Principle A: Equal treatment, no discrimination’ is closely connected to ‘Core Principle B: All workers enjoy the protection of employment law’. The Guides to the Dhaka Principles are available in multiple languages, along with Implementation Guidance, at https://www.ihrb.org/dhaka-principles/downloads-translations

​Question 3: I’m getting questions from our board and investors about what can be done to improve human rights throughout our operations and supply chains, but not sure where to begin?
Answer: Start with one of the wide-ranging toolkits available that look at multiple aspects of business and investment including how to understand current problems, how to look at supply chain due diligence, codes of conduct, corrective action and remedy, the basic legal obligations and frameworks, your reporting processes, tools for the financial sector to use, and how you might mitigate the impacts of COVID-19 on vulnerable workers.
Resource: The recently released Minderoo Foundation / Walk Free ‘Business and Investor Toolkit’ is designed to help businesses and investors take action to improve human rights standards in their supply chains and combat forced labour, human trafficking and other forms of modern slavery. It contains links to case studies, legal frameworks, research, and tools produced by Walk Free and other civil society organisations worldwide, and can be found at https://www.minderoo.org/walk-free/business/toolkit/
 
Question 4: There is so much talk about human rights risks through property, construction and infrastructure operations and supply chains right now that we don’t know where to turn. How can we understand these risks properly, so we know what to prioritise?
Answer: As Emeritus Professor Rosalind Croucher, President of the Australian Human Rights Commission, puts it so effectively: “Effective management of modern slavery risks involves placing ‘risks to people’ at the heart of your response. Taking a rights-based approach to addressing modern slavery will assist your business to meet the increasing expectations of investors, governments, clients, consumers, business peers and civil society around business respect for human rights.”
Resource:  A new guide, ‘Property, Construction and Modern Slavery’, is part of a two-year collaboration between the Australian Human Rights Commission and KPMG helping businesses assess and address their modern slavery risks. The guide is relevant not only to property and construction organisations but also to their suppliers and investors, and outlines key modern slavery risks areas for the property and construction sector and provides practical examples. You can access it at https://humanrights.gov.au/our-work/rights-and-freedoms/publications/property-construction-and-modern-slavery-2020
 
Question 5: We are struggling to raise awareness about human rights and modern slavery across our staff, suppliers, clients and peers; how can we make sure everyone is on the same page?
Answer: Make use of the excellent free resources that ALREADY exist before you start developing more.
Resource: The Supply Chain Sustainability School’s ‘Modern Slavery’ resource library is regularly updated and contains free elearning modules, videos, webinars, reports, guides, toolkits and posters. You can browse these free resources at https://www.supplychainschool.org.au/learn/modern-slavery/ and, more importantly, share them with your suppliers, staff or clients to encourage them to get across this important topic.
Many of School’s resources are referenced in the Property Council of Australia’s ‘Supplier Platform’, launched in late 2019 and free for suppliers to access, which asks key suppliers about the actions they are taking to assess and address human rights issues and modern slavery risks across shared operations and supply chains, provides learning opportunities, and tracks continuous improvement. Find out more, and read the assessment questions, at https://propertycouncil.informed365.com/.

In this Sustainable Procurement and Modern Slavery webinar from 12th August 2020, hosted by Shaun McCarthy from ISO:20400 and Action Sustainability, Helen Carter, Valentina E Gurney, Chris Harrop and Robin Mellon are the speakers discussing various aspects of Modern Slavery, answering questions and discussing the differences in different countries and cultures.

You can watch / listen to the recording of the webinar by clicking on the YouTube link below:

An unprecedented consortium of more 116 organisations - including Better Sydney - academics, lawyers, community and faith leaders has come together to urge the NSW Premier to end delay and bring the state’s historic Modern Slavery Act into force by 1 January 2021, two and a half years after it was passed unanimously by both houses of parliament in June 2018.

In a passionate open letter to NSW Premier Gladys Berejiklian, the consortium stresses its concern with regard to the effect of the delay in increasing the numbers of people trapped in modern slavery and the expected impact of COVID-19 increasing the vulnerabilities of workers inside Australia and overseas within supply chains connecting products to Australia. Many of the signatories are also worried about what the unprecedented delay says about democratic processes in the State.

“The Act was passed and assented in June 2018. Bringing it into force should have been a formality. Rather than proclaim the legislation into force, Gladys Berejiklian’s government took the unusual step of delaying its proclamation and then launching a parliamentary inquiry into the Act” says Paul Redmond, Emeritus Professor of Law at UNSW, one of the signatories. In the two years since the Act was passed, it is estimated that as many as 18 million people around the world may have been deceived or coerced into different forms of modern slavery. 9 million per year. 25,200 per day. 1,050 per hour. 1 new slave every 4 seconds.

“The numbers are unconscionable”, says Jane Jeffes of War on Slavery. “Entirely avoidable delays have had a profoundly adverse effect on the lives of millions, with women and children the most vulnerable. Millions more people have been caught up in modern slavery since the Act was passed. That simply should not have happened or been allowed to happen. Other states are now looking at legislation that will strengthen Australia’s fight against modern slavery and we fail to understand why the NSW government hasn’t put the NSW Act into force as a source of pride.”

The NSW Modern Slavery Act has been lauded internationally as having some of the world’s strongest antislavery reporting provisions including penalties, and significantly also directing all NSW government agencies to respond to the risk of modern slavery in their own procurement.

“The legislation recognises that modern slavery is prevalent around the world and in NSW. What we buy may contribute to modern slavery crimes somewhere in the supply chain,” says Carolyn Kitto of Be Slavery Free. “The government had committed to a strong deterrent through ensuring that the goods and services NSW consumers, businesses and government buy is not produced by the slavery of others. I am sure the people of NSW and the parliament want to see the Act in effect.” 

The letter addressed to the Premier Berejiklian, requesting she expedite the process for the Act to come into force by 1 January 2021, was delivered to here on 20 July 2020.

As Victor Hugo famously stated, “Nothing is as powerful as an idea whose time has come”, so now is surely the time for Environmental Upgrade Agreements to be taken up across Australia.
Environmental Upgrade Finance (or Building Upgrade Finance – the terms are inter-changeable between states) can be explained as a simple loan used to pay for works that improve the energy, water or environmental efficiency and overall sustainability of the building; the loan is repaid through council rates over an agreed time period.
The finance can be used for a range of projects such as installation of renewable energy systems, new equipment or initiatives to improve energy and water efficiency, or projects that minimise waste, maximise resilience or improve resource efficiency; there just needs to be a measurable sustainability improvement over time.

​CASE STUDY: The Rye Hotel, Mornington Peninsula, VIC:
The hotel is a well-established business which includes a bistro, café, beer garden, bar, function rooms and hotel with conference facilities, 43 rooms and a swimming pool. The owner had been planning the installation of solar panels at the site for some time, but the main obstacle was the upfront cost. Environmental Upgrade Finance overcame this cost barrier, allowing the savings from reduced power bills to fund repayments, with the upgrade resulting in an immediate 25% saving on accounts, allowing the savings to cover the loan repayments. The expected savings over the 25-year asset lifetime are $560,000. Read more: https://sustainableaustraliafund.com.au/success-stories/rye-hotel/
Photo credit: The Rye Hotel, Mornington Peninsula, VIC

Environmental Upgrade Finance has been talked about around Australia for decades. The Sustainable Melbourne Fund was established back in 2002, with legislation passed by the City to enable the finance in 2010. The first agreement was signed in the City of Melbourne in 2011, with legislation updated to allow all councils in Victoria to offer the finance model from 2015. In NSW, the legislation allowed for Environmental Upgrade Finance in 2010, and South Australia passed legislation which also includes heritage upgrades, for Building Upgrade Finance in 2015. National expansion led to the Sustainable Australia Fund in 2019.
Once a council has resolved to offer Environmental Upgrade Finance, and a project and building owner identified, the finance is established through a three-way contract known as an Environmental Upgrade Agreement (often referred to as “an EUA”), drawn up between the building owner, local council, and lender. Once the loan has been used to pay for the building upgrade, the council takes repayments over the term of the agreement alongside the usual rates paid each quarter.
The building owner benefits from reduced utility bills, improved asset value and sustainability outcomes, increased comfort, indoor environmental quality or tenant attraction, as well as the long-term fixed-interest loan.
Although there is a broad range of finance alternatives available to building owners, there are four key differences between Building Upgrade Finance and ‘traditional’ loans:

1. No other finance options provide loans for up to 20 years at fixed interest rates;
2. Fixed interest rates allow for better financial modelling against expected benefits, making most arrangements cashflow positive from day one;
3. The loan can be passed on to the new owner if the building is sold before the loan is fully repaid; and
4. The benefits and the repayments can be shared with tenants where their benefits can be accurately measured, unlike other capital works restrictions.

In the US, where it is known as ‘PACE finance’ (Property Assessed Clean Energy, although the finance is now used for much more than energy), they have achieved over US$1.5 billion in investments since 2009, across over 2,400 commercial building upgrades and projects, creating around 18,000 jobs. PACE is now enabled in 36 US states and the District of Columbia, covering more than 80% of the population and including residential, commercial and industrial projects.
In Australia, the funds come from the private sector, where financial institutions can finance these projects. The Sustainable Australia Fund is the most active player in the market, valuing a partnership with Bank Australia to provide the funding for projects as well as a level of market and business development for each council area. As an open market solution supported by the Australian Renewable Energy Agency (ARENA) to help expand the market, other lenders are certainly encouraged to participate. Better Building Finance is a sister organisation to Sustainable Australia Fund, and acts as a third-party administrator for councils. They don’t charge council a fee for their services and, unlike earlier arrangements, the management and administration processes provided aim to remove most of the workload from councils.
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CASE STUDY: Food production and processing, Somerville VIC
Hussey & Co is a lettuce farm that delivers produce to Australia and overseas. With 74 acres of land, multiple sheds and industrial processing facilities, it relies heavily on energy to stay in business. After reviewing the cost savings from their first solar installation, Hussey & Co’s business owners were so impressed they decided to take out another Environmental Upgrade Agreement almost immediately. With another $1million in capital to install a second solar system, the company saves an additional $86,000 per year. Read more: https://sustainableaustraliafund.com.au/hussey-and-co/
Photo credit: Hussey & Co, Somerville, VIC

As of early May 2020, there are dozens of councils offering Environmental Upgrade Finance across Victoria including the City of Melbourne, City of Port Phillip and Mornington Peninsula Shire, and nearly a hundred successful projects with examples of funding from $15,000 to over $7million. With councils such as Kyogle in NSW now signed up with Better Building Finance, it’s definitely time for more leading councils across NSW, SA and VIC to leverage the private sector finance available to achieve better environmental, economic and social outcomes for their areas; targeting more sustainable outcomes for buildings, businesses and communities.
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CASE STUDY: Light industrial - 114 Bakehouse Road, Kensington VIC
Looking for ways to future-proof their light industrial warehouse building from rising energy costs, Australian company Covertel was interested in the installation of a solar system to save costs and increase the building’s re-sale value. Their upgrade works included the installation of 10kW solar array and an LED lighting upgrade and generated annual energy savings of $3,825 against annual loan repayments of $2,996. Read more: https://betterbuildingfinance.com.au/case-studies/114-bakehouse-road-kensington-vic/  

So why hasn’t Environmental Upgrade Finance been quite the success in Australia as PACE finance has been in the US? Well, there were a few barriers early on:

1. Complexity – early versions in Australia were seen as cumbersome and time-consuming, with complicated processes. However, the administration and protocols have massively improved, with independent initiatives like Better Building Finance offering third-party administration that takes most of the work away from councils and building owners. As with many sustainability examples, from NABERS to Green Star and further afield, each version has improved upon the last until today’s rating tools and finance instruments are barely recognisable when compared to ‘early models’.
2. Status quo – many of those working in local councils or sustainability roles may have encountered early versions of Environmental Upgrade Agreements and simply not want to change because of ‘old knowledge’ and the perception that more work may be involved. However, this is akin to not wanting to have a mobile phone because early versions were heavy and complex with short battery lives. Things evolve, fast. It’s important to re-assess such finance opportunities, given the changes made and the need for a range of options to help buildings and businesses with both climate change and COVID-19-related upgrades.
3. Risk appetite – Many councils have such low appetites for risk that ‘new’ or ‘improved’ finance solutions are not even considered in favour of existing models, however problematic or out-of-date existing models may be. All councils need to do a regular scan to ensure that available solutions match the needs and expectations of local building and business owners, and reconsider how to pilot or trial other finance or sustainability initiatives with minimal risk exposure.
4. Legislation - Early versions of legislation proved unwieldy making it difficult for businesses, installers and lenders to transact effectively. Over time, updates and improvements have been made to remove red tape and make it more user-friendly for all parties, particularly in Victoria, helping it lead the nation with more than 90 financed projects across 23 councils. Last month, Victorian legislation was updated to include residential properties and address climate change adaptation. With similar updates in NSW and SA, a huge new market of opportunities could be opened up.

Is this the time for Environmental Upgrade Agreements to be taken up across Australia? They’re certainly a great option for many non-residential upgrades, although they’re not right for every project; councils and building owners should consider them one of the simplest, steadiest finance options to have in the toolbox. As states and territories look to achieve widespread efficiency, climate change and resilience upgrades in line with state targets, the Paris Agreement and the UN Sustainable Development Goals, and as we need every single tool in the box to help businesses and building owners back on their feet again after the disruptions of COVID-19, any leading council or any strategic business owner should be making sure Environmental Upgrade Agreements are to hand.
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To find out more, read other case studies and to start the conversation, just visit https://betterbuildingfinance.com.au/.

In celebration of their 10 year history, the Global Compact Network Australia (GCNA) convened its inaugural conference to discuss the topic of ‘Rebuilding trust in corporate Australia – Business as an Agent of Sustainable Change’.

The conference brought together over 250 local and global leaders from business, civil society, academia and Government to discuss trust and role that business can play in rebuilding trust in corporate Australia.

​A valuable part of this discussion was around rebuilding trust through supply chains - including around human rights, modern slavery, and sustainable procurement - and so I was delighted to lead a panel of industry experts to consider what best practice looks like and what needs to change in the final session; 'The Last Word'.

UNSW Built Environment is on track to empower the next generation of female leaders in a bid to achieve 50% of women in leadership roles by 2025.

In 2016, Professor Helen Lochhead joined UNSW Built Environment as the Faculty’s first female dean. At the time, she was starkly aware of the lack of gender diversity in the built environment professions, and pledged to achieve 50% of women in leadership roles in the Faculty as part of her leadership strategy – a pledge she has since achieved, and then some.

But the work is far from done, with women still facing a lack of proper support and opportunity in built environment professions. According to Professor Lochhead, women have been graduating in near equal numbers from professional programs in the built environment for quite some time, but this does not translate to equal representation in the workplace. For this reason, she set an ambitious agenda for the Faculty to drive 50% female representation in industry leadership positions by 2025.

“There has been a huge attrition of talent for various reasons ranging from unconscious bias to non-family-friendly working conditions. This is a huge loss to the professions and industry, and for each and every woman who has left their vocation after committing time and resources into their education and professional development,” says Professor Lochhead.

“This needs to change. Not tapping into 50% of the potential and diverse professional talent pool available doesn’t make sense from either economic or societal perspectives. We need to proactively mentor, promote and retain our female talent in the professions.”

The 50% initiative, known as ‘Engaging Women in the Built Environment’, has attracted support from industry, with key players like Lord Mayor Clover Moore, Lucy Turnbull AO, Robin Mellon and Alison Mirams actively engaging with the Faculty to help reach this target. This has also spurred the creation of new scholarships for women in construction, travel grants and PhDs to support women at various stages of their career.

The Faculty also aims to increase visibility of female professionals who have excelled in the built environment profession despite challenges, setbacks and obstacles. On 8 March, the Faculty launched its Facing Equality photo exhibition, featuring portraits and perspectives that reflect the diversity of the profession.

The Facing Equality project, currently being rolled out in all UNSW faculties, forms part of the UNSW Grand Challenge on Inequality. It was designed to challenge notions of equality by combining photographic portraits with personal reflections from a diverse range of members of the UNSW community.
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“This exhibit features a number of inspiring female leaders from a diverse range of careers,” says Professor Lochhead. “It speaks to the talent as well as resilience, tenacity and perseverance of women in the built environment profession. These are attributes that we need to recognise and tap into.”

Social impact, ethical practices and economic value are headlines of an expanding sustainability agenda, says the Supply Chain Sustainability School’s chief executive officer Robin Mellon.

Every business or service has a supply chain, whether you’re selling coffee, clothing or construction materials. In some cases, these supply chains are quite simple. But increasingly, especially in large industries like construction, supply chains are complex and frequently inscrutable.

Mellon says Australia’s property and construction industry faces five main areas of supply chain risk: governmental, regulatory, economic, reputational and environmental.

“Each of those risks will ebb and flow depending on your business, but as the scope of sustainability continues to grow, so do the risks.”

Shifting community expectations, investor demand for transparency and increasing pressure on corporations to demonstrate good corporate citizenship are just some of the factors influencing supply chain sustainability, Mellon says.

“While in the past our industry was focused on environmental sustainability, today we are considering more social and economic factors,” he says. These include modern slavery, social value and economically-sustainable business models.

A recent survey of members of the Supply Chain Sustainability School found 52 per cent of respondents thought sustainability was a more important issue in their businesses than it was 12 months ago, and 49 per cent have already begun to engage their suppliers earlier.

“Seventy-nine per cent of businesses now have a sustainability plan in place within their organisations. This may not mean much in itself, but compared with five or 10 years ago, this is a massive shift,” Mellon says.
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A new worldwide guidance standard for sustainable procurement, ISO20400, was released in June 2017 and broadens the definition of ‘sustainable procurement’ to include economic and social factors, alongside the environmental. Mellon says the standard’s impact “will be felt through big business first, but will trickle down to all small businesses through our supply chains over time”.

Issues like modern slavery, which “few people were talking about five years ago” are starting to dominate discussions, he adds.

“There’s a massive and immediate reputational risk involved in discovering that the materials in your building were created through forced labour, for example.”

The 2016 Global Slavery Index estimated that 45.8 million people in 167 countries are in some form of modern slavery, a term that includes debt bondage, forced labour and human trafficking. An inquiry is underway into whether the Australian Government should establish a Modern Slavery Act, similar to that established in the United Kingdom in 2015 which requires companies with a turnover of more than AU$59 million to report on their compliance annually.

Big business in Australia is already backing the introduction of an Act, and Mellon says it will “drive changes in both business and personal behaviours”.

“When large companies with influence over extensive supply chains make changes, people listen. Whether we are talking about carbon, certification of materials or modern slavery, a large company can change an entire supply chain in one move.”

Mellon says he’s inspired by the work of some industry leaders, who are embedding social value into their decision making. He points to Mirvac, which surveys its suppliers annually – “whether they are providing toilet paper or legal services” – to ensure each meets its vendor code of conduct and aligns with the company’s broader social impact agenda.

“Big organisations wanting to include social value in their decision making have a huge ability to change things for the better,” he adds.

Mirvac’s Song Café in Sydney’s 200 George Street, which operates as a social enterprise with all profits supporting YWCA initiatives, demonstrates the social impact the industry can make on supply chains and local communities, he says.

Mellon also points to the work of John Holland, which is currently rewriting its sustainability strategy in light of the new international standard and best practice procurement examples, and which insists that every preferred supplier be a member of the Australian Supply Chain Sustainability School “so that everyone involved in a project can be speaking the same language”.

In the instant information age, any oversight, irresponsibility or malpractice down the line can be exposed and shared on social media in the blink of an eye. In this environment, companies can’t afford to be complacent, Mellon says.

His message is simple: “You can’t flip a switch and go from knowing nothing about sustainability in your supply chain to knowing everything. It’s a journey – and one we are all on. But there is free information out there to help people upskill – about energy and carbon, waste, biodiversity, sustainable procurement or modern slavery. If you learn just one thing a month, soon you’ll know a whole lot more.”