Preventing modern slavery in the energy transformation rush

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Preventing modern slavery in the energy transformation rush

The energy industry’s necessary rapid transition throughout the coming years will be a boon for the environment, but we should take care to ensure that human rights are not compromised in our haste.

Businesses in the resources and utilities sectors should be aware of their ethical and legal obligations when it comes to modern slavery, which includes “trafficking in persons, slavery, servitude, forced marriage, forced labour, debt bondage, the worst forms of child labour, and deceptive recruiting for labour or services,” according to the KPMG report Resources, energy and modern slavery: Practical responses to managing risk to people.

KPMG Australia’s human rights leader Richard Boele explains, “The need to decarbonise means that the global energy mix is rapidly shifting. This shift is creating increasing crossover between the resources and energy sectors in both their operations and supply chains. It’s in this context that companies must challenge their thinking on where they’ll find risk to people. Transition is creating new and emerging human rights and social risks that we have to identify and understand.”

The report points to Australia’s Modern Slavery Act (2018) that requires certain organisations to report on their efforts to identify and address any risk of human slavery in both their direct operations, and supply chains.

“The modern slavery legislation requires you to report on the risks of modern slavery across both your supply chains and operations. Your entity’s operations may include direct employees in the business, while supply chains may include procured services such as construction, security, transport, cleaning, furniture and building management,” the report outlines.

The report offers guidance on how to approach this issue, beginning with the fact that in order to identify these risks, a company needs to think about risk analysis in a way that “focuses on risks to people rather than risks to the business.”

It outlines four main risk factors that should be considered:

The four main risk factors for human slavery

“The shift in supply chains caused by the move towards decarbonisation, and the compressed timeframes often involved, mean that all four of these risk factors are very relevant to the activities of resources and energy companies,” it states.

The report recommends beginning by setting out a policy commitment that outlines the company’s stance on modern slavery, and how it intends to mitigate it. It suggests that a response should be grounded in framework outlined in the 2011 United Nations Guiding Principles on Business and Human Rights (UNGPs) (pdf).

“A robust approach to managing modern slavery risks requires an understanding of the maturity of your existing systems and controls with an articulated pathway to enhancing them over time,” the report says. “Building in learning from international leading practice and fundamental human rights principles can set a foundation for reporting on effectiveness under the mandatory criteria year-on-year, providing a benchmark for your response.”

Page 44 of the full report (pdf) offers a checklist that businesses can use to help mitigate their risk of enabling modern slavery.

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