Institutional investors urge Australia to adopt modern slavery law
More than 30 major institutional investors are calling for the introduction of modern slavery legislation in Australia.
The investors – which have over $2trn (€1.8trn) in assets under management between them – have signed a statement to a group of lawmakers in Australia that is conducting an inquiry into establishing a Modern Slavery Act in the country.
“As investors, we believe human rights issues can present potential financial impacts through reputation damage and operational risks to our portfolio companies,” the statement said. “We therefore welcome a Modern Slavery Act which would improve transparency on how companies operating in Australia are managing modern slavery risks in their operations and supply chains.”
The statement was organised by the Principles for Responsible Investment (PRI), which has separately written to the Australian parliament’s Joint Standing Committee on Foreign Affairs, Defence, and Trade.
The committee was commissioned to carry out an inquiry in February, and will decide if a Modern Slavery Act should be introduced in Australia.
Signatories to the investor statement included several Australian pension investors such as AustralianSuper and Hesta, European asset owners such as Church of Sweden and the UK’s Church Investors Group, and asset managers such as Aviva, Hermes, and PGGM, the provider for the €182bn Dutch healthcare pension scheme PFZW.
The investor statement said Australian companies could be implicated in the use of forced labour – a facet of what is referred to as modern slavery – in their supply chains, and that the discovery of this practice could ultimately impact long-term returns by damaging companies’ brands and “licence to operate”.
It said that, on the whole, investors have limited information on Australian companies’ efforts to address risks related to forced labour, and that an Australian Modern Slavery Act “would create a level playing field, improving the amount of information available”.
The investor statement noted that other jurisdictions have adopted legislation addressing modern slavery, such as the UK, which introduced a similar act in 2015.
It also cited a new “corporate duty of vigilance” law passed this year in France, the EU Non-Financial Reporting Directive, and a body of international soft law, such as the International Labour Organisation’s core labour standards.
“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,” according to the statement. “An Australian Act would complement these efforts.”
Separately, a group of more than 130 global institutional investors with over $4.3trn under management last month issued a statement calling on textile companies with supply chains in Bangladesh to continue to implement an agreement for factory inspections that was reached in the aftermath of the collapse of a building (Rana Plaza) in 2013, which killed more than 1,100 garment workers and injured a further 2,600. The statement was issued to coincide with the four-year anniversary of that event.