Anti-slavery efforts can be profitable for businesses
In my last blog, I lamented that the Australian government was only estimating an expected $11,500 regulatory ‘light touch’ price tag on the anti-slavery efforts of a company with over $100 million in revenue.
That said, as a business owner I sympathise that while aspiring to best practice in anti-slavery efforts is laudable, high compliance costs are the antithesis of business orthodoxy. Consider also the impact of regulation on suppliers – for example, a supplier that pays $2 per day to its workers under horrible conditions, after an anti-slavery drive, may have to pay $20 per day under improved conditions. Both compliance costs and the flow on effects of extra regulation on suppliers could squeeze profit margins up and down the supply chain.
While we can proudly say there is no price to eradicating slavery, a profit-maximising shareholder may see things differently – especially if they don’t know the results of the efforts their company has taken to eradicate slavery in their supply chains.
The following are two approaches that may address possible shareholder concerns associated with additional compliance costs. One approach is ensuring businesses benefit from their attempts at eradicating slavery through positive public relationship exercises. This could generate a ‘race to the top’ – that perhaps expands beyond anti-slavery into the realms of ethical sourcing more generally. Civil society could be encouraged (backed by competitive government funding) to recognise businesses that are champions at identifying and eradicating slavery and those that source items only from ethically cleared businesses (see for example SA8000). The recognition may involve highlighting compliance via a tiered approach (see for example this report by Baptist World Aid).
It is important, however, for a company’s anti-slavery efforts to be amplified with wide-ranging publicity – and ideally for CEOs to be individually informed of their company’s …read more