Overview of CAF’s modern slavery guidance
With the introduction of the Australian Modern Slavery Act in 2018, many Australian businesses are now expected to take proactive steps to manage their modern slavery risks, including known risks in the cleaning services industry.
CAF has prepared this guidance for members to:
- explain how their involvement in CAF, both through membership and certification, is at the cutting edge of modern slavery risk management
- assist with meeting reporting requirements under the Modern Slavery Act, and other modern slavery and sustainability reporting.
Addressing modern slavery is good for business
While there is a moral imperative for businesses to guard against modern slavery in their supply chains, there are also clear risks and benefits for businesses that either do or do not take action to address this.
As the Department of Home Affairs’ Modern Slavery Reporting Guidance explains,
Taking action to address modern slavery in your entity’s operations and supply chains is also good business sense. It can protect against possible harm to your business, improve the integrity and quality of your supply chains, increase profitability, improve investor and consumer confidence and financing opportunities, improve your relationships with your workers and local communities, and lead to greater access to business opportunities.
Addressing modern slavery risk will increase productivity and client satisfaction: “Where workers are ethically recruited and treated with respect and dignity there is evidence that workforce productivity increases, retention and absenteeism rates improve, and there are fewer accidents.”1 When cleaners are being paid correctly, when they are working safely, when they are treated with respect and have a voice at work, quality cleaning ensues, leading to high tenant satisfaction, a reduced rate of accidents, and a safe and hygienic environment.
Access to investment is another benefit of addressing modern slavery: many institutional investors require property companies in their portfolios to comply with defined ESG standards as a condition of receiving capital. Property companies that can demonstrate they are addressing modern slavery risk for cleaners in their portfolios will attract large investors that screen investments against ESG risk. The value of property assets also increases when human rights risks assurance is provided. A practical demonstration of this can be seen in CAF certification being recognised by GRESB and by the GBCA’s Green Star Performance rating tool.
The lower the risk of modern slavery and exploitation in your supply chain, the lower the risk of reputational, legal and financial damage as a result of any regulatory or industrial action. Recent wage theft scandals have seen major companies make headlines for underpaying workers (often low-paid workers) millions of dollars. Section 550 of the Fair Work Act sets out that entities further up the supply chain can be held accountable for the unlawful actions of their suppliers with each infraction carrying a maximum penalty of $600,000.
With the introduction of the Modern Slavery Act in 2018, entities with an annual consolidated revenue of $100 million are now required to report annually on the steps they are taking to identify and respond to their modern slavery risks in their operations and supply chains. This reporting is expected to lead to reputational and market consequences for entities that do not demonstrate they have taken adequate and effective steps to respond to known modern slavery risks, such as those present in the cleaning services industry.
Assessing and addressing risks through worker-driven schemes like CAF Certification not only mitigates these reputational and financial risks, but also contributes to smoother business operations by reducing the risk of price shocks, service disruptions, un-forecasted procurement activities etc. All supply chain stakeholders from investor to cleaner benefit from fair and transparent pricing, quality cleaning and employment practices that eliminate the risk of exploitation, unfair competition, and investment risk.
How to use this guide
Part 1 of the guidance covers:
- How modern slavery occurs in the cleaning industry, including some case studies drawn from real life examples
- The risk factors for modern slavery in this industry
- The visible and hidden indicators of modern slavery
- The compounded modern slavery risk presented by the COVID-19 pandemic.
Part 2 of the guidance covers:
- How CAF Building Certification is a leading practice approach to addressing modern slavery risk in cleaning supply chains
- How CAF’s cutting-edge approach is grounded in decent work, human rights due diligence, and does not rely on social auditing alone
- CAF’s unique approach to empowering workers to prevent modern slavery through worker voice.
Part 3 of the guidance contains a table to assist you with drafting your modern slavery statement, as well as to inform other sustainability reporting. The table covers:
- Practical components of CAF Membership, CAF Building Certification and CAF Prequalification as they apply to the Modern Slavery Act’s mandatory reporting criteria
- A range of prompts about how to talk about modern slavery risks in the cleaning industry, in your business, and how involvement in CAF helps your organisation address these risks.
This guide also includes CAF resources that may assist with taking a best practice approach to modern slavery risk management and reporting and practical steps you can take to uphold your business’s responsibility to respect and protect human rights:
- Supply chain stakeholders’ responsibility to mitigate modern slavery risk for cleaners, which provides best practice guidance on what each level of the supply chain can do to address modern slavery.
- Victim support stakeholder matrix that identifies the stakeholders best placed to assist potential victims.
- CAF’s alignment to national and international legislation and human rights standards.
CAF’s modern slavery guidance is a living document which will be updated in light of developments in the CAF Certification scheme, guidance from human rights experts, and leading practice from our members. This guide complements the Department of Home Affairs’ Commonwealth Modern Slavery Act: Guidance for Reporting Entities (Modern Slavery Reporting Guidance).
1 Managing Risks Associated with Modern Slavery, p. 23, accessible at: https://www.ifc.org/wps/wcm/connect/5e5238a6-98b3-445e-a2d6-efe44260b7f8/GPN%20Managing-Risks-Associated-with-Modern-Slavery.pdf?MOD=AJPERES&CVID=mR5Bx5h
IMPORTANT: CAF Modern Slavery Guidance usage statement: This Guidance is intended for use by CAF Members only. Any unauthorised use, reproduction or distribution of the Guidance will be considered a breach of CAF Membership Terms & Conditions and may result in termination of CAF Membership. Reproduction or use of parts of the Guidance in CAF Members’ own material and statements is permitted however must be attributed to CAF and referenced accordingly. CAF highly recommends Members consult with CAF staff prior to publishing any CAF-related material to ensure accuracy.