Modern slavery is increasingly a risk for businesses, both as they work to align with the ethical values of their shareholders, customers and wider society, and for the risks modern slavery poses to their reputation, legal compliance, and investment outlook. Addressing modern slavery is a key part of the ‘S’ of the ESG landscape, impacting company strategy, business model, and brand - as well as supply chain sustainability.
What is modern slavery?
Modern slavery is an umbrella term used to cover slavery, servitude, forced or compulsory labour and human trafficking, which are defined by several international standards, and sit at the extreme end of a spectrum of labour exploitation.
Interconnected global supply chains link modern slavery practices in less regulated or economically developed countries, with manufacturing and consumer markets in developed countries, including Aotearoa New Zealand. Alongside this, global labour migration is a key risk factor in where and how modern slavery is perpetuated. Due to layers of complex social and economic factors, few countries are free of modern slavery. Businesses in Aotearoa New Zealand have the opportunity to proactively consider and robustly manage the risk of modern slavery, before legislation is passed.
Understanding modern slavery in Aotearoa New Zealand
The New Zealand Government’s recent consultation defined modern slavery as: “severe exploitation that a person cannot leave due to threats, violence or deception”. It includes “forced labour, debt bondage, forced marriage, slavery, and human trafficking.” It also uses a definition of worker exploitation as “non-minor breaches of employment standards in New Zealand”.
This means that in Aotearoa New Zealand, modern slavery sits at the extreme end of a spectrum of conditions that are illegal here under employment and immigration law. Being aware of these definitions is an important step to addressing how modern slavery is relevant and important to businesses.
Why is it an important issue for businesses in Aotearoa New Zealand?
Aside from organisations looking to do the right thing, managing modern slavery risk is important as a means to manage reputational risk, adhere to international standards and laws, meet investor expectations and as part of talent retention.
Because of the higher risks associated with imports, some businesses will be more exposed based on the nature of their overseas supply chains. For example, modern slavery within palm oil supply chains impact New Zealand businesses that import agricultural feedstock or manufacture food products such as chocolate, in Aotearoa New Zealand. Cotton products produced in China’s Xinjiang region are now barred from being imported into the USA due to forced labour concerns, which can impact New Zealand businesses importing cotton for products destined for USA markets.
These examples illustrate the need to understand if the raw materials in products might be of concern not only here, but to international market destinations.
The importance of these risks to the Aotearoa New Zealand business community was highlighted by a number of influential businesses including ASB, Contact Energy, The Warehouse and Westpac. These organisations joined a World Vision and TradeAid campaign in 2021, signing a letter to government calling for an inquiry into establishing a Modern Slavery Act in Aotearoa New Zealand.
More than ever, businesses are being judged by a wide range of stakeholders on how they deal with ESG issues. There are a number of steps businesses can take to prepare for upcoming modern slavery legislation. Taking measures to future-proof supply chains from modern slavery issues presents major challenges and tremendous opportunities for business.
How PwC can help
We have the resources and expertise to assist your organisation with upskilling staff and senior management, mapping supply chains, and assessing and delivering strategies to manage organisational risk.
Please contact us to discuss how we can support your organisation.
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