Modern Day Slavery – Changes in the Procurement Industry
A chance for CPO’s to stand up and be counted
Procurement reporting processes play a vital role in the fight against modern slavery
The procurement industry faces many challenges, but equally these challenges provide us with great opportunities to make a difference. With the increased awareness of modern day slavery many changes have now begun to take effect within our domain.
One of the biggest changes we have seen recently is the implementation of Anti-Slavery legislation in the US, UK, and Australia. The result of which is an extension to the job scope for many procurement personnel from the purely transactional and operational role of the past, to a wider role incorporating additional altruistic elements.
Starting from this year Australia’s Modern Day, Slavery Act (2018) will be deployed in full force. As part of the resulting annual reporting process, it will now be mandatory to provide a publicly available report that outlines:
The entire end to end supply chain of each business.
A risk report on the categories and sections within that supply chain that are vulnerable to slavery.
An implementation plan towards mitigating or handling potentially slavery risks.
Failure to report, or failure to adequately and transparently report may result in fines. This is a comprehensive exercise but one that will also bring with it many benefits, such as prevention of negative consumer perception of a company, and improved brand reputation. We hope that it will of course also begin to address the hardships that so many individuals still face today with poor working conditions, and lack of freedom. In Y2019 any form of slavery is simply unacceptable.
What CPO’s should know about the modern slavery audit process?
During the typical audit process, our procurement teams usually carry out a great deal of manual leg-work. Running background checks, tracing suppliers, compiling databases etc. There are several third-party data sources that can provide you with information to support these checks. However, any form of manual checking process such as this can involve significant man day overheads and generate high costs. Furthermore, there will always be a margin of error with manual oversight.
Here at Robobai we offer businesses a modern solution to this. Within our procurement analytics software we have a specific module that automates the detection of modern slavery. This module within the Robobai platform pin-points exactly where a supply chain is at risk of slavery exploitation. This is done by extracting critical information from category spend data, before combining this with third-party external insights automatically. This information is then mapped, and highlighted to areas in the supply chain that require attention. This module supports the identification and tracking of slavery risk alongside other procurement KPIs. In using Robobai’s software procurement leaders are provided with the information necessary and the toolset by which to manage modern slavery, and compliance with current government reporting requirements.
Finally, what should you do if you do uncover a case of slavery?
While it may seem necessary on the surface to cut ties immediately with exploitative sources, according to AntiSlavery.org, this may worsen the situation for the end-recipients: the employees. In most of the cases, slavery occurs in poverty-stricken nations, so eliminating possible, sole sources of income will not only hurt the workers but also their employers – perhaps perpetuating the cycle. Instead, approaches that can be undertaken can include the education and introduction of safer work practices, provision of non-monetary benefits for the employer and employees, such as education and upskilling programs, or care for the mothers who are working. These are some of alternatives companies can utilise when partnering and commencing re-negotiations of contracts with their suppliers. There are also many independent and government funded bodies that operate globally and can be found online where reports can be filed and investigations undertaken.
As responsible human beings it is our duty to do whatever we can to stamp out modern day slavery wherever it can be found. At Robobai we hope that our software can play its part in addressing this challenge for Australian companies.
Increasingly complex supply chains and the growing demands of Boards, executives, investors, and consumers demand an AI-powered approach to spend intelligence to enable ethical supply chains and impactful procurement.
With increased transparency and obligations around payment times and practices of large businesses, it is critical that eligible entities have a thorough understanding of the requirements of the Payment Times Reporting Scheme (PTRS) to ensure they are meeting the reporting requirements on time!