Modern slavery exists, but where?

There is money to be made in exploiting workers and in a lot of cases it comes down to cutting costs, being able to do it and getting away with it,” says Gemma Livingston, a human rights lawyer who has worked in criminal and commercial litigation across the public, private and community sectors in New Zealand and Australia.

Livingston joined KPMG New Zealand last year to lead their business and human rights and social impact work. She recently led the human rights portfolio for a global law firm’s national pro bono practice in Australia, engaging with not-for-profits, businesses and the public sector throughout the consultation and implementation of the Australian Modern Slavery Act and the New South Wales Modern Slavery Act.

Livingston says one of the worst cases she came across was where a man was brought to Australia on the promise of ‘good work’. Employed at a restaurant, he was forced to sleep and wash there, having been locked in the restaurant.

“He became quite sick and one of the people who attended the restaurant started asking questions. Unfortunately, by the time he got help he was so sick he ended up passing away before he received the justice he deserved,” Livingston says.

The man’s passport had been withheld and he was unaware of his visa rights. His employer used this as a form of control. But sadly, these experiences of deception, exploitation and coercive control are not isolated.

Livingston says there are factors that increase the risk of worker exploitation. This can include sourcing goods from high-risk geographies, risky business models, such as subcontracting out employment and working with vulnerable communities. Risk factors for New Zealand can include migrant workers being hired by third-party contractors to work on temporary visas. In those situations, there is often a level of trust built up between the recruiter and the worker. But without always appreciating their legal rights – and often with language barriers in place – these workers may be vulnerable to exploitative conditions.

“It’s not to say that all companies that hire migrant workers are exploiting them. . . but there are absolutely pockets of people taking advantage of workers here in New Zealand,” Livingston says.

How prevalent is the problem in New Zealand and why do boards and businesses need to be concerned?

The latest global estimates of modern slavery released in 2022 by the Walk Free Foundation, the International Labour Organisation and the International Organisation for Migration estimate there are almost 50 million people living in situations of modern slavery. The most recent data, specific to New Zealand, estimates there are 3,000 people living in modern slavery conditions on any given day.

Even more alarming, according to research conducted by World Vision NZ, every household in New Zealand spends an average of $34 a week on ‘risky goods’ that are linked to forced labour and/or child labour.

One of the contributing factors to modern slavery and forced labour is a lack of understanding and awareness from both consumers and businesses.

“We often think of children working in mines or people in garment factories chained to a desk and working ridiculous hours. But it could actually be the mum down the road working harmfully long hours for a cleaning business, not being paid what she should be and not understanding her rights. She may not believe she has a voice to speak up about her working conditions and does not know where to seek support,” Livingston says.

In New Zealand, there have been increased media reports about the working conditions of Recognised Seasonal Employer (RSE) workers. These workers can be considered vulnerable due to the conditions of their employment. An RSE visa is attached to an employer so if workers are being treated badly and exploited they cannot simply leave the employment. This canperpetuate a situation where workers do not feel they can speak out.

Is modern slavery more likely to be a problem in bigger companies? And with New Zealand largely made up of SMEs what are the chances of finding it in their business or supply chains?

“That is one of the intricacies of the proposed modern slavery laws in New Zealand where you have a lot of small- to medium-sized businesses compared to overseas jurisdictions where modern slavery legislation is only being applied to large companies. However, there is rarely a question of whether modern slavery exists in a business and its associated supply chain, but rather where does it exist? That is the reality of the world we live in,” Livingston says.

That might be the one wake-up call that business needs to hear, but Livingston says there will be a connection somewhere.

“Even the most amazing companies that have been involved in the social impact space will still find suppliers that will cause challenges and risks they need to address,” she says. “But with appropriate governance and human rights frameworks, mitigating risks is achievable.”

There are, of course, industries where it is harder to investigate every tier of a supply chain. In the garment industry, for example, an article of clothing may have travelled through five different countries from where the cotton is picked, processed, dyed and then made into clothing, stored for distribution and shipped around the world. But Livingston says that by looking at risk factors in supply chains and setting up systems to prevent and address the risk of adverse impacts on human rights, businesses can impact change. Livingston says boards and businesses need to take responsibility for their operations and look at where their risks might lie.

“It will take collaboration across government, industry and civil society to facilitate change, but we can see this occurring in other countries where industry stakeholders are working together to ensure supply chains are sustainable. If we are serious about lowering levels of modern slavery from 50 million people, businesses and consumers need to take more responsibility.”

In a world where every aspect of doing business is becoming more complex, the question for boards and businesses is, should human rights be prioritised over finance?

Livingston says people should not run a business if they are treating people badly, regardless of the type of visa they are on, what language they speak or the conditions of their employment contract. What business wants to be associated with exploiting people? However, despite the UN Guiding Principles on Business and Human Rights (UNGPs) being enacted over a decade ago, modern slavery numbers continue to rise and businesses are not taking responsibility.

“Rather than just being a compliance issue, the benefits of acting ethically and identifying and addressing human rights risks are a business opportunity. There are real benefits beyond doing the right thing, including attracting and retaining talent.

“Employees are seeking businesses that align with their values and investors and consumers are increasingly scrutinising businesses’ social impact credentials. Business transparency and supply chain due diligence enables end purchasers to have confidence in a business and can help shift consumption patterns towards more ethical producers.

“As more modern slavery legislation comes into force globally, New Zealand businesses will need to report on their own activities when exporting to other countries or working with businesses that do have due diligence frameworks,” Livingston says.

“The UNGPs provide the perfect starting point for boards to consider what policies and processes are appropriate for their business to address potential human rights impacts. Transparency in supply chains takes time, but simple measures can be taken in the short term to help guide businesses on where potential risk areas might lie, such as completing a Modern Slavery Diagnostic Assessment.”

Livingston’s request for businesses is to not wait until it is mandatory to consider human rights. 

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In 2022, the Ministry of Business, Innovation and Employment sought feedback on modern slavery and worker exploitation legislation for New Zealand. It is yet to be seen when modern slavery legislation will be enacted in New Zealand, but the need for it is evident.