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Audit Committee InstitutePublic trust, human rights and board accountability
October 2018
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The Global State of Trust
We are facing a catastrophic breakdown
in public trust.
Edelman’s 2018 Trust barometer has showed that trust in institutions is
declining sharply across all sectors -across business, media, government
and NGOs.
- Edelman, 2018
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Trust and board accountability94% of directors agreed or strongly agreed that trust was important to their organisations’ sustainability
49% felt that their board had a proactive approach to building trust with their most important stakeholders
38% believed their board had clear processes for responding to issues that can affect trust
23% received meaningful metrics on trust in their organisations
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What is driving the trust conversation?
Trust contagion effect
Shifting social expectations
Regulatory drivers are increasing
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Where does social licence come from?
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Mining, Sustainabilityand The Agents of Change
Daniel M. Franks
MOUNTAIN MOVERS
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Earning trust through social licenceOrganisations need to build better, stronger relationships with their stakeholders.
People and communities play a critical role in accepting, approving or rejecting how companies – or entire industries – conduct their business.
Your business needs to identify, escalate and manage those impacts that present greatest threat to social licence.
© 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Document Classification: KPMG Public
7© 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Document Classification: KPMG Public
Trust, human rights and the risk to business
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What is modern slavery?
Modern slavery practices are major violations of human rights and serious crimes. Modern slavery practices include trafficking in persons, slavery, slavery-like practices (including forced labour and forced marriage) and the worst forms of child labour (including using children for prostitution or in hazardous work).
Explanatory Memorandum, Modern Slavery Bill 2018 (Cth)
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Vulnerable populations01
High risk business models02
High risk categories03
High risk geographies04
Risk factors for modern slavery
© 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Document Classification: KPMG Public
10© 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Document Classification: KPMG Public
Global ContextSome Australian companies have existing obligations under UK’s Modern Slavery Act 2015
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Legislative Compliance
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Modern Slavery Bill 2018 (Cth)
Financial threshold of AUD $100 million
Annual public modern slavery statement on a central government register
Board approval and director signature
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Legislative Compliance
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Modern Slavery Act 2018 (NSW)
Financial threshold of AUD $50 million
Penalties of up to $1.1 million apply for non-reporting/misleading reporting
First reports under the NSW legislation may be due before the Cth
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© 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Document Classification: KPMG Public
Legislative Compliance
13© 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Document Classification: KPMG Public
Mandatory Reporting Criteria
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How you assess the effectiveness of the actions taken
The process of consultation with entities owned and/or controlled by you
Any other information that you consider relevant
Identify the reporting entity
Risks of modern slavery practices in your operations and the supply chains of the entity and any entities owned or controlled by you
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Structure, operations and supply chains
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Actions taken to assess and address modern slavery risks including due diligence and remediation processes
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Modern Slavery Bill 2018 (Cth)
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What questions do I need to ask?
What will you do when you find slavery-like practices in your operations or supply chain?
Do you know if there are people in slavery-
like conditions in your supply chain?
Are you ready to publicly report on your approach to managing
modern slavery?
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© 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Document Classification: KPMG Public
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Am I ready to respond?
© 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Document Classification: KPMG Public
kpmg.com.au
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The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
The information contained in this document is of a general nature and is not intended to address the objectives, financial situation or needs of any particular individual or entity. It is provided for information purposes only and does not constitute, nor should it be regarded in any manner whatsoever, as advice and is not intended to influence a person in making a decision, including, if applicable, in relation to any financial product or an interest in a financial product. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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Richard Boele
Partner, KPMG Banarra, Human Rights and Social Impact ServicesHead of KPMG Global Business and Human Rights Network
Richard is the Lead Partner of KPMG Banarra, KPMG’s first dedicated human rights and social impact advisory team. Through his work with property, financial services, FMCG, retail and mining companies such as Stockland, Lend Lease, Dexus, Macquarie Group, Westpac, Bunnings, Coles, Wesfarmers, Woolworths and BHP Billiton, Richard offers over 20 years of experience in advising on and helping companies manage their human rights and social risks, including in relation to complex operating contexts. His particular strengths are engaging senior corporate leaders on strategic human rights and social risks, and asking the challenging but important questions that lead to many an executive’s career “ah-ha” moment. Richard is a former Director of the UN Global Compact Network Australia. He is a Visiting Fellow on social impact at Macquarie University and Industry Fellow at the Centre for Social Responsibility in Mining at University of Queensland. He is widely published and a regular speaker at conferences.
Dr Meg Brodie
Human Rights Service Line Lead, KPMG Banarra, Human Rights and Social Impact ServicesManager, KPMG Global Business and Human Rights Network
Meg is a human rights specialist with deep experience across the corporate, government and community sectors. Meg has particular expertise in transformative human rights change processes and complex stakeholder dynamics and specialises in working with corporate clients to translate human rights commitments into practical action plans. Meg is a recognised expert in corporate responses to modern slavery reporting requirements, working with clients in financial services, property, retail and other sectors on leading practical solutions to human rights risk. Meg leads KPMG Banarra’s human rights service line and manages KPMG’s Global Human Rights Network, coordinating human rights and sustainability experts from across KPMG. Prior to joining KPMG, Meg worked on a significant statutory human rights independent review and has extensive field experience, including across Asia and Africa. Meg has a PhD in human rights law and has also published on the corporate responsibility to respect human rights. Meg understands the importance of organisational readiness and works with clients to design and deliver capacity building to effectively navigate the human rights landscape.