Modern slavery due diligence at a major Australian bank
How to tackle modern slavery risk across a global supply chain?
This Australian bank had been reporting under modern slavery legislation for a number of years and knew it was time to enhance its due diligence approach, particularly in high-risk geographies. To help figure out ‘how’, we embedded a specialist within the bank’s team to assess alignment of the existing approach to the UN Guiding Principles on Business & Human Rights (i.e. what good looks like), and its effectiveness. Those findings and leading practice insights led to a series of recommendations for improvement.
We then worked with the bank to make improvements, with an emphasis on high-risk spend categories in foreign jurisdictions. We took India as a pilot location. The bank had been taking the same approach used with suppliers in Australia, and had seen it wasn’t working as intended. A different legislative environment and cultural barriers were getting in the way.
The bank had a supplier modern slavery diligence questionnaire. The intent is that the supplier provides responses, those responses are assessed against the bank’s expectations, and then the supplier works with the bank to agree on an improvement plan for any gaps. Simple enough! Except the level of detail in responses they were receiving just wasn’t adequate to do those first assessments. There was also inconsistency in assessment and developing supplier improvement plans. And for the plans that were in place, suppliers were struggling to demonstrate progress.
The first thing we did was a review of the bank’s current questionnaire and broader supplier engagement approach on modern slavery risk. We worked with India-based colleagues, and consulted with local and India-based banking staff and a group of their India-based suppliers.
Using these insights, we delivered:
A proposed simplified modern slavery due diligence questionnaire, with a shorter, higher quality question set.
A comprehensive supplier due diligence toolkit for the bank’s Australian and global teams. The toolkit contained:
Guidance on how to assess supplier questionnaire responses and supporting documentation to assign a maturity rating. For example, how to consider a supplier''s policies and controls, and what features good practice ones should have
A ‘next best step’ decision tree with a ‘bank of actions’ for building out supplier improvement plans, aligned to their assessed maturity rating
A supplier-facing toolkit with practical guidance, examples and templates to help suppliers develop and implement modern slavery policies, supplier risk management processes, internal training, and grievance mechanisms.
Communications to be shared alongside the due diligence questionnaire with suppliers, explaining the ‘why’ behind the bank’s ask and connecting them to available support.
Internal training sessions to aid deployment of the supplier due diligence toolkit with the bank’s supplier risk assessment teams.
An external engagement session for the India-based suppliers to seek feedback on and refine the supplier-facing toolkit.
To create conditions for ongoing global leadership support, we delivered a modern slavery awareness-raising session with the bank’s India-based Executive Leadership Team with a global anti-slavery NGO. This session brought in victim-survivor voice and clearly highlighted the bank’s connection to modern slavery risk and its role in addressing it.
According to the local sponsoring bank Executive, this work accelerated the bank’s progress ‘by many months’. Suppliers confirmed the toolkit was helpful in communicating the bank’s expectations and providing practical support. Other wins included enhanced leadership buy-in, strengthened supplier relationships, and the ‘bank of actions’ holding as an effective asset for building out improvement plans. Even more impressively, the bank’s engagement on this topic illuminated non-compliance with the Australian Modern Slavery Act for a multinational supplier. This spurred that business to undertake a program of work to uplift their modern slavery risk management and produce their first Modern Slavery Statement; talk about effective influence!
