Downer is committed to operating responsibly, and establishing and adhering to the highest ethical standards across our Group. Downer supports fundamental human rights. We acknowledge that modern slavery is one aspect of human rights and we will not tolerate any forms of slavery or human trafficking.
Ensuring that slavery and human trafficking is not taking place in Downer’s supply chain, beyond our direct suppliers, remains a challenge particularly given the extensive nature and diversity of our service offerings and locations. However, we are implementing a risk-based approach and are committed to continuous improvement through the below measures, including engaging with our direct suppliers to educate, assess and encourage continuous improvement in their own capacity to manage modern slavery risks in their subcontractors and broader supply chain.
Downer plans to release our Modern Slavery Statement by 31 March 2021, which will span the financial year ended 30 June 2020. This is will be supported by our Group-wide Procurement Framework Policy and Standards of Business Conduct. These policies are supported by the following:
- Procurement induction and training module
- Supplier and subcontractor prequalification
- International Supply Standard – for international supply
- Standard precedent terms and conditions for all supply agreements and subcontracts, including our purchase order terms and conditions
- FCGSA Directors’ questionnaire
- Downer’s risk assessment process.
Downer’s risk assessment process sets a base level identification of modern slavery risk by considering country risk, and product/ service category risk.
To improve our understanding of local human rights contexts, as well as exposure to related issues such as corruption, we use tools including the Global Slavery Index. The majority by value of our payments are made to goods and services suppliers in Australia and New Zealand, primarily in lower risk categories such as skilled subcontractors, fleet, fuels and professional services.
We recognise there is risk, however, it is primarily in our lower category spend areas and products sourced from higher risk countries such as China.
For example, Downer works with suppliers in China through its partnership with CRRC Changchun, which is delivering Sydney’s Waratah trains and Melbourne’s new High Capacity Metro Trains. One of CRRC’s suppliers was the subject of public allegations concerning the treatment of their workforce with respect to human rights and modern slavery. These allegations have been strongly denied, however, incidents like this highlight the challenges Downer faces in managing these issues outside of our immediate supply chain.
While there are potential benefits and cost-savings associated with overseas sourcing, we need to consider the risks which include:
- Additional costs for international administration, foreign currency exchange, transport and custom duties
- Logistical challenges including import, customs and quarantine regulations
- Exposure to modern slavery and potential for bribery and corruption in some foreign jurisdictions
- Limited legal protections in foreign jurisdictions, should disputes arise
- Increased rules and regulations in foreign markets and dealing with foreign entities
- Language barriers and understanding of foreign supply market
- Differences in quality and safety standards.
To further enhance our risk assessment process, Downer is currently conducting specified testing for a sample of international procurement activities.
External consultation: Relationships and collaboration with our suppliers, business partners and relevant agencies help shape our strategies on modern slavery. We have actively participated in relevant forums to discuss and understand peer, industry and stakeholder views on human rights issues including modern slavery. These forums include:
- Infrastructure Sustainability Council of Australia Modern Slavery Coalition
- Business Council for Sustainable Development Australia
- Procurement and Supply Australasia Connect
- Supply Chain Sustainability School.
We are committed to continually moving forward to ensure the prevention of modern slavery through operational and supplier-driven processes across our value chain. We will continue to collaborate with our internal and external stakeholders to address our own modern slavery risks and continue to improve our processes. Several of our processes will help track our performance and will provide insight into areas for improvement.