CPA AUSTRALIA 2O2O MODERN SLAVERY STATEMENT CONTENTS
Foreword 4
1. About this statement 6
2. O ur structure, operations and supply chains 8
3. Our modern slavery risks 16
4. O ur actions to assess and address modern 20 slavery risks in our operations and supply chains
5. Member engagement and collaboration 26
6. Assessing the effectiveness of our actions 30 and our future plans
7. H ow we consulted with our controlled entities 32 to prepare this statement
Appendix 34 FOREWORD
CPA Australia is proud to publish its first modern slavery We acknowledge that – like many entities – this is our first statement statement (statement). and we are starting our journey to identify and mitigate our modern slavery risks. We have long recognised the devastating impact of modern slavery on individuals, many of whom are the most vulnerable in Our key achievements in 2020 included: society. The UN estimates there are over 40 million modern slavery victims globally, including 16 million in private sector supply chains. strengthening our policies and governance processes to Critically, the impacts of COVID-19 have further exacerbated address modern slavery, including establishing a cross-functional modern slavery risks around the world. Modern Slavery and Human Rights Working Group to drive our response; Business action to combat modern slavery is more important than ever. Since 2016, we have been actively engaged with modern mapping key aspects of our Tier One supply chain and slavery reporting law reforms through detailed and supportive undertaking risk assessments for 62 per cent of our submissions to Australian Government consultations. We fully procurement spend; and support the reporting requirements under the Modern Slavery acting on our risk assessment findings through supplier Act 2018 (Cth). engagement and the development of new tools and We are committed to combatting modern slavery. Although we resources, including contract clauses, a training module are a smaller reporting entity, we recognise that every organisation, and embedding modern slavery risk considerations into irrespective of size, has a role to play. all major procurement activities. We are committed to ongoing improvement in future years and will be establishing a three-year roadmap for continuous improvement.
This statement was approved by the Board of CPA Australia Ltd on 31 May 2021 and is signed by the President and Chairman of the As a member-based organisation, we Board of CPA Australia. drive action on modern slavery in our own operations and supply chains and provide tools to members to support them to combat modern slavery. As accountants, members play an Merran H Kelsall FCPA important role in helping entities President and Chairman of the Board, CPA Australia Ltd recognise modern slavery risks 31 May 2021 to individuals and financial risks to business. Members can contribute to business risk assessments, and help assure business actions to mitigate the risks of modern slavery.
4 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 5 1 ABOUT THIS STATEMENT
CPA Australia is one of the world’s CPA Australia Ltd is registered as a foreign corporation largest accounting bodies, with a global in the UK. We have produced this statement to meet membership of more than 168,000 the requirements of both the Australian MSA and the Modern Slavery Act 2015 (UK). We engaged a specialist members in over 100 countries and business and human rights advisory firm, Pillar Two, regions. We work to partner with members to collaborate with us to develop our statement. to prepare for today and tomorrow in a globally connected world and advance Our response to modern slavery is guided by three key principles: trusted and valued accounting and business professionals who enhance (i) the risk to individuals is paramount to all other their communities. risk considerations; (ii) we actively seek to identify the risk of modern slavery in our operations and supply chains even if we do not find instances of modern slavery; and This statement is made on behalf of CPA Australia Ltd (ABN 64 008 392 452) (CPA Australia, we, our, us) (iii) assessing modern slavery risk and taking actions and sets out our efforts to prevent and address any to address those risks is the right thing to do, involvement we may have in modern slavery over the and drives commercial and social value for 2020 calendar year. As required by the Modern Slavery CPA Australia, which results in value for members. Act 2018 (Cth) (MSA), this statement also addresses modern slavery risks and actions in relation to our This statement highlights how we have applied these three subsidiaries, which are not individual reporting principles to assess and address modern slavery risks entities for the purposes of the MSA. Further information in our operations and supply chains. about our corporate structure is set out in section 2 of this statement.
As CPA Australia and our subsidiaries share similar business models and supply chains, this statement describes our modern slavery risks and our responses to these risks across our corporate structure on a consolidated basis. The boards of all our controlled entities must act in accordance with all standards and policies that have been adopted and promoted by CPA Australia, including those relating to human rights matters, such as modern slavery.
6 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 7 CORPORATE 2 GOVERNANCE STRUCTURE
OUR STRUCTURE, Members are governed by the professional requirements of CPA Australia MEMBERS and the Constitution and By-Laws of the organisation. They elect Divisional OPERATIONS AND Councillors, and through the Appointments Council, the Board. Divisional SUPPLY CHAINS • Branch and Divisional Councils Councils are Committees established under the CPA Australia Constitution. • Council of Presidents The Council of Presidents advises the Board on strategic issues and opportunities, drawing on the views of the members. The responsibility • Appointments Council of the Council of Presidents includes two-way engagement with Divisional This section of our statement describes Councils and the Board. The Appointments Council is responsible for the structure, operations and supply appointing the CPA Australia Board. chains of CPA Australia.
The Board approves the organisation’s strategy, oversees execution THE BOARD and implements the Constitution having regard to the corporations law. Our structure Ultimately, the Board is responsible for managing CPA Australia’s response — BOARD COMMITTEES to modern slavery with the support of relevant business functions. CPA Australia Ltd is a company limited by guarantee • Audit, Risk and Compliance incorporated in Australia. We are governed by a board Board committees assist the Board in its decision-making and policy appointed by the Appointments Council, made up of • Finance and Policy processes. As of 1 January 2021, the new Board committees are Nomination; Audit, Risk and Compliance; Finance and Investment; members. Our governance structure is set out on page 9. • Member Engagement Our registered office is located in Melbourne, Australia. Member Engagement and Culture; and Education, Policy and Innovation. • People, Remuneration and Culture A key brand associated with our business is INTHEBLACK magazine. Published monthly, it covers the issues and • Nomination people shaping business around the world. We also publish the Australian Accounting Review, a peer-reviewed journal published four times a year.
CPA Australia Ltd ultimately controls the following entities: Advisory committees advise the Board in their areas of expertise. CPA Australia Advice Pty Ltd (ABN 21 606 084 806) ADVISORY COMMITTEES a private company incorporated in Australia; • Professional Qualifications CPA Australia (M) Sdn. Bhd. a private company incorporated in Malaysia to facilitate the provision • Public Practice of services to members in Malaysia; and
CPA Australia (Shanghai) Co. Ltd. a private company incorporated in China to facilitate the provision of services to members in China. Compliance committees are created by the Board to review and In the past, CPA Australia Advice Pty Ltd provided evaluate the professional conduct of members. financial advice. In 2018, CPA Australia Ltd announced its COMPLIANCE COMMITTEES decision to exit the business of CPA Australia Advice Pty Ltd. In 2020, CPA Australia Advice Pty Ltd did not have • Disciplinary Panel any outward facing operations or undertake external • Quality Review procurement. The intention is to wind up CPA Australia Advice Pty Ltd in 2021.
8 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 9 INTHEBLACK ARTICLE ON MODERN SLAVERY: CASE STUDY ENGAGEMENT AND COLLABORATION WITH MEMBERS, INDUSTRY, GOVERNMENT AND CIVIL SOCIETY
Our operations Investments In July 2020, we published a feature article on modern slavery in INTHEBLACK. The magazine issue had a print circulation of CPA Australia is one of the world’s largest accounting As part of our operations, we invest funds in approximately 120,000 copies and is also available to read online. bodies, with a global presence. equities, equity funds, property funds, and bonds The article by Megan Breen focused on how accountants can among other investments, in line with our Cash play a lead role in supply chain management and identifying The operations of CPA Australia and our subsidiaries and Investment Policy. These investments are modern slavery. are primarily focused on the provision of services managed by an external investment manager. We to members in Australia and globally. Our vision recognise that entities can be exposed to modern It defined modern slavery for readers is to partner with members to prepare for today slavery risks through their investments and will and tomorrow in a globally connected world. undertake additional work in 2021 and then outlined the reporting In doing so, we help to advance trusted and valued to further assess modern slavery risks in requirements under the Australian accounting and business professionals who enhance our portfolio. their communities. This means regularly engaging Modern Slavery Act and the role of with members, employers, academia, government, finance professionals in identifying regulators, standard setters and the community to ensure we understand the current and future needs and addressing modern slavery risks. of the profession. This enables us to develop strategies, content, products and services to deliver an experience To develop this INTHEBLACK article, we interviewed and sought that meets member needs and goals throughout each A key element of our operations is the comment from various individuals with significant expertise in this stage of the member journey. field, including Dr Katherine Christ CPA, Lecturer in Accounting at the delivery of the CPA Program, which University of South Australia; Dr Leeora Black; Vanessa Zimmerman, we provide through distance-learning. CEO of business and human rights advisory firm Pillar Two; Shaeron Services A CPA is a finance, accounting and Yapp, Human Rights Principal at South32; and Deepen Somaiya, business professional with a specific Sustainable Procurement Manager at Transurban. Our core services include education, training, technical qualification. support and advocacy. We provide these services We recognise the expertise and insight these individuals possess through a range of channels, including our website and the value they added to this INTHEBLACK article. and digital magazine, face-to-face and online events in The CPA Program is recognised internationally and Australia and overseas, six Centres of Excellence focused has a strong focus on the practical application of The article is a helpful resource for members and the wider on key policy issues, and a dedicated member contact knowledge within a real-world setting. It provides business community. We believe that by producing such content, centre located in Melbourne. In 2020, we delivered members with more than just a technical accounting we can help support members to address modern slavery risk. approximately 1418 member events, including CPA focus, going beyond the numbers to teach the skills Congress, forums and roundtables, discussion groups members need to reach the next level in leadership, strategy and business. This includes: and information sessions. Due to COVID-19 most of these were run virtually. commercial awareness;
Our employees and members also work together with emotional intelligence; local and international bodies to represent the views and concerns of the profession to governments, communication and collaboration skills; regulators, standard setters, industries, academia and the general public. a technically-skilled and solution-driven approach to problem solving; and
awareness of the social impacts of accounting.
10 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 11 CPA AUSTRALIA CPA Australia CPA Australia CPA Australia Ltd CPA Australia (Shanghai) Co. Ltd. Ltd operates as a has staffed regional Advice Pty OFFICE LOCATIONS has staffed branch registered foreign representative offices Ltd operates offices in Shanghai corporation in the in China (Beijing), in Melbourne, and Guangzhou, UK, Indonesia, New Vietnam (Hanoi and Australia. China. Zealand, Singapore, Ho Chi Minh City) and Employees and office locations Malaysia, and Hong Indonesia (Jakarta). Kong, and has offices We have unstaffed CPA Australia and its controlled entities have more in each of these representative offices than 560 employees located in nine countries and regions. countries/regions. in the UAE (Dubai Over 450 employees are based in Australia (with the and Abu Dhabi) and unstaffed liaison majority in Melbourne) and more than 110 are based offices in Macau in other locations, primarily Hong Kong, Kuala Lumpur, and Taiwan. Malaysia and Singapore.
• Melbourne, Australia • Perth, Australia • Hong Kong • Canberra, Australia • Darwin, Australia • Kuala Lumpur, Malaysia • Sydney, Australia • London, UK • Auckland, New Zealand • Brisbane, Australia • Beijing, China • Singapore 567 448 119 Employees globally • Adelaide, Australia • Guangzhou, China • Jakarta, Indonesia Employees based Employees based in Australia in other locations • Hobart, Australia • Shanghai, China • Hanoi, Vietnam • Ho Chi Minh City, Vietnam
12 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 13 OUR SUPPLY CPA Australia supply chain CHAINS Of these suppliers, our top industries for procurement of our goods and services, based on spend, were:
Procurement for CPA Australia and our controlled entities is undertaken by our business units and managed by a centralised procurement team based in Melbourne.
This team oversees key procurement activities and maintains and implements our procurement policies and processes. In 2020, we mapped our supply chains to identify our direct (Tier One) suppliers for the 2019 calendar year. FINANCIAL EDUCATION MEDIA AND RECRUITMENT SERVICES CONTENT MARKETING
We assessed that
ICT CONSTRUCTION HOSPITALITY CLEANING, FACILITIES our (HARDWARE, SOFTWARE AND TELECOMMUNICATIONS) MANAGEMENT AND SECURITY AUD $91.4M annual spend across global supply chains as at 31 December 2019 Each sector of spend may have potential exposure We recognise that our Tier One suppliers’ country to modern slavery and the risks of modern slavery of location may not be an indicator of supply chain in our supply chains are set out in detail in the risk. This is because the production and delivery of covered more than following section. products and services procured by us may take place outside of these countries. An initial analysis of 62 per cent of our 2019 procurement spend showed that almost all of We also acknowledge that procurement expenditure the Tier One suppliers analysed were based in does not correlate to level of modern slavery risk and 1,000 Australia, Singapore, the US or the UK, with the that we may also be exposed to modern slavery risks Tier One suppliers of goods or services. vast majority of our spend occurring in Australia. through smaller or once-off procurements in other categories not identified above.
14 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 15 3 OUR MODERN SLAVERY RISKS
This section of our statement describes How modern slavery risks may Based on our risk assessment and other analysis, we The impact of COVID-19 the modern slavery risks we have identified believe that our most significant modern slavery risks be present in our operations are likely to be present in our supply chains, rather than in the operations and supply chains of We recognise that the scope and severity of modern and supply chains our operations. This reflects the member-based nature slavery risks in our supply chains is likely to have CPA Australia and its controlled entities. of our operations, which can present less scope for increased throughout 2020 due to the impact of modern slavery conduct to occur than other sectors We have a responsibility to respect human rights in COVID-19. It caused significant disruption to global and business models. However, we recognise that We recognise that the modern slavery risks identified in all our business activities and relationships under the supply chains and has increased the vulnerability of accounting professionals may face a range of modern this section may change and evolve over time, so we are UN Guiding Principles on Business and Human Rights workers throughout supply chains to modern slavery. slavery risks through the businesses they work for. This committed to regularly reviewing our risk profile. (UNGPs). This includes the human right to freedom from We will continue to monitor the impacts of COVID-19 is because members provide accounting advice and slavery. The UNGPs are the recognised global standard on global supply chains, including potential changes other professional services for and within a wide range for preventing and addressing human rights harm by to modern slavery risks due to COVID-19 in key of businesses and organisations, including those in high businesses. They provide an important framework to sectors we procure from. help us, and other businesses, understand and respond risk sectors and geographic areas. We are committed Modern slavery to modern slavery risks. We have applied the UNGPs in to supporting them and equipping them with the tools Due to the member-based nature of our operations, our modern slavery risk assessment to identify how we they need to respond to modern slavery risks they may our business activities were not impacted by the may cause, contribute to or be directly linked to modern encounter through the provision of accounting advice pandemic to the same extent as other sectors, such Modern slavery describes situations where ‘coercion, slavery, and the appropriate actions to take in response. and services. More information about our engagement as manufacturing, travel and tourism or extractives. threats or deception are used to exploit victims Our risk assessment is described in section 4 of with members is set out in section 5. However, many members work in these sectors and and undermine or deprive them of their freedom’1. this statement. we have provided them with additional support, It involves serious exploitation and grave abuses Consistent with the UNGPs, we consider our most including resources to support them and their of human rights. As defined in the MSA, modern significant modern slavery risks to be those that would Modern slavery risks may be present in our operations clients at every stage of the COVID-19 crisis. slavery practices include trafficking in persons, and supply chains due to a range of factors, including: cause the most severe harm to people rather than our slavery, servitude, forced marriage, forced labour, business. These risks are described below. Due to our pivot to home-based working during the debt bondage, the worst forms of child labour procurement of products or services from high risk pandemic, we were not required to procure significant (situations where children are subjected to slavery or countries or sectors; amounts of personal protective equipment (PPE). similar practices, or engaged in hazardous work) and We recognise that PPE can involve high modern deceptive recruiting for labour or services. Modern use of third-party recruitment providers, including where providers are used by suppliers to recruit slavery risks and we will consider these risks in future slavery can occur in all sectors and can happen in labour in countries with a high prevalence of procurement of PPE as appropriate. Australia as well as overseas. modern slavery; and
our investment activities, which could lead to us holding equities in other businesses that may have high modern slavery risks.
1Commonwealth Modern Slavery Act 2018 Guidance for Reporting Entities (p. 8).
16 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 17 Modern slavery risks in our supply chains Modern slavery risks in our operations
We seek to engage suppliers with proven values, Based on an analysis of approximately 62 per Our operations primarily involve the provision of services to members. We have identified ethics and business practices, including those cent of our 2019 procurement spend, we have that the modern slavery risks in our operations include: related to human rights and modern slavery. identified the below modern slavery risks in Tier We believe that we can also work with suppliers One of our supply chain. to positively influence their response to modern slavery risks.
A medium to high risk that A medium to high risk that A medium to high risk we could A medium risk that we may A medium to high risk that we could be directly linked to we could contribute to or be contribute to or be directly contribute to or be directly we may be directly linked modern slavery by procuring directly linked to modern slavery linked to modern slavery through linked to modern slavery to modern slavery through goods and services from the by procuring goods and services procuring hospitality services through hiring arrangements our investment activities ICT and telecommunications from the cleaning, property (including labour and food and for employees and contingent and portfolios. industries that are produced or management, maintenance and beverage products) that are workers for our overseas delivered using modern slavery. construction industries that are produced or delivered using offices and operations. Why is this a risk area? produced or delivered using modern slavery. Why is this a risk area? modern slavery. Why is this a risk area? We invest funds in diverse Why is this a risk area? equities, equity funds, property We procure a range of electronic Why is this a risk area? In some circumstances, funds, and bonds, among other products like laptops, computers We hosted 426 in-person events we recruit employees and investments. These investments and mobile phones to support our We rely on cleaning, property globally in 2020. For many of our contingent workers overseas, are managed by an external business activities. These products management, maintenance and events, we rely on labour hire including through third-party investment manager. There is can involve high modern slavery construction services to operate delivered by third party suppliers recruitment firms. Generally, a risk that we may be directly risks, including the use of all our offices globally. These within the hospitality industry. these recruitment processes are linked to modern slavery exploited labour in overseas services can involve high modern The hospitality sector is a for professional, office-based through these investments. factories where these products slavery risks, including risks high-risk sector for modern roles which generally carry a For example, we may invest in are manufactured, and the use of associated with the widespread slavery in Australia and overseas, lower modern slavery risk. equities from a company that is conflict minerals in components, use of unskilled migrant labour due to the use of short-term found to have modern slavery in which may be mined or processed and unauthorised subcontracting, unskilled labour. There is also a Recruitment processes can its operations or supply chains. by victims of modern slavery. which have been reported to risk that some food and beverage involve high levels of modern There may also be modern be more vulnerable to modern products provided during our slavery risk, especially when slavery risks associated with the slavery. Modern slavery in these events may involve modern slavery. recruiting for lower-skilled or provision of support services for sectors can occur in Australia, Modern slavery risks associated temporary positions in countries these products, including through as well as overseas. However, with these products and services where the use of recruitment offshore call centres, which may modern slavery risks associated may be greater in some high-risk fees is widespread. In some be located in countries with with these products and services countries where modern slavery circumstances, recruitment fees weaker enforcement of labour may be greater in some high-risk is more prevalent. can be used to hold victims laws, creating more vulnerability countries where modern slavery in debt bondage, a form of to modern slavery risks. is more prevalent. modern slavery.
18 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 19 4 Updating our Recruitment Policy, Remuneration Establishing a governance framework to OUR ACTIONS Policy and Equal Opportunity Policy to address provide accountability for our response TO ASSESS AND modern slavery risks These three updated policies cover our commitment Good governance and clear internal accountability ADDRESS MODERN to ensuring we do not engage in conduct that causes, are key elements of our response to modern slavery. contributes to, or directly links us to modern slavery. The Board of Directors is the governing body of SLAVERY RISKS IN They also strictly prohibit recruitment practices linked CPA Australia and sets and approves our strategy, to modern slavery and illegal underage labour. direction and financial objectives, including those OUR OPERATIONS relating to modern slavery risk identification and The updated policies recognise the risks of mitigation. The oversight and governance of our AND SUPPLY CHAINS recruitment debts (debt bondage) when dealing modern slavery work involves the whole organisation. with third-party recruiters and make it clear that The modern slavery work of senior management and employees, contractors and those engaged for labour the executive is reviewed and considered by the Audit hire, should never be required to leave cash deposits, Risk and Compliance Committee (ARCC), and approved This section outlines our actions to assess A. STRENGTHENING passports, visas or bank cards in order to engage by the Board. These individuals have received briefings and address modern slavery risks in our OUR POLICIES AND in work. relating to our modern slavery response throughout 2020. The ARCC is a crucial stakeholder in the operations and supply chains, including GOVERNANCE PROCESSES The policies also recognise that employees and governance of our modern slavery response. those of our controlled entities. contractors may be at a higher risk of modern For more information about our corporate governance Our key policy documents and governance processes slavery if they are younger, female, based in high-risk framework please see pages 30-32 of our 2020 clearly express and reflect our commitment to geographies or have a migrant status or disability. combating modern slavery and apply to CPA Australia Integrated Report. Modern slavery risks and our controlled entities. During 2020, we strengthened Establishing a Modern Slavery and Human Rights our policy and governance frameworks by: Working Group During 2020, we worked to build our response to modern slavery risks and create a strong foundation Updating our Procurement Policy During 2020, we established a Modern Slavery and for future action. Further information about our plans Human Rights Working Group with representatives We revised the policy to outline our commitment to strengthen our response over 2021 and beyond is from various business units including Procurement, throughout the procurement process to verify set out in section 6. Policy and Advocacy, People and Culture, Company compliance with requirements relating to human Secretariat, Finance and Legal. A number of working In 2020, no modern slavery was identified in our supply rights and employment rights. group members also have responsibilities in relation chains and operations. We are also not aware of any to our controlled entities. The working group is tasked Updating our Fraud and Corruption Policy current or pending legal action against us regarding with identifying modern slavery risks in our operations the breach of a modern slavery or other human rights We amended the policy to specifically include modern and supply chains and then taking actions to assess law. However, we recognise that modern slavery may slavery as an example of corrupt conduct. This policy and address these risks, including the establishment be hidden in our operations and supply chains. We extends to all employees in Australia and overseas. We of due diligence and remediation processes. will continue to take action to assess and address our have a zero-tolerance stance in relation to fraud and Through the working group, we developed a project modern slavery risks and equip ourselves to respond to corruption and modern slavery. We know that fraud and plan outlining our modern slavery compliance any future cases of modern slavery that we may identify corruption is linked to modern slavery and it is important program and actions. It was prepared in accordance in our operations or supply chains. our responses to these issues are aligned. with an academic report that we commissioned and Our key actions to assess and address our modern sponsored titled Modern Slavery Compass – a new slavery risks are outlined in this section. tool to point business in the right direction (2020), authored by Dr Katherine Christ CPA and Professor Roger Burritt FCPA (further information on this report is provided on page 29).
20 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 21 B. IDENTIFYING AND Engaging with suppliers rated medium C. INTEGRATING AND Updating template contracts for the supply ASSESSING OUR and high risk (based on the results of ACTING ON OUR of goods and services to include modern slavery clauses MODERN SLAVERY RISKS the supply chains mapping and desktop FINDINGS assessment) We have developed a set of contract clauses We are working to understand our modern slavery We are taking steps to integrate and act on our risk which, among other things, require suppliers to acknowledge that CPA Australia is committed to risk profile by: In 2020, we wrote to our Tier One suppliers who were assessment findings, by: complying with the principles in the MSA, and assessed as medium and high risk and advised them that Undertaking supply chains mapping and a desktop to warrant that the supplier has no knowledge we were commencing work to identify and understand assessment of certain suppliers to identify modern of any risk of modern slavery offences within the risks of modern slavery in our operations and supply slavery risk its organisation or supply chains and is taking chains. We issued these suppliers with a questionnaire Changing our procurement process to embed modern slavery risk reasonable steps to prevent the occurrence of During 2020, our Procurement Team developed a tool designed to: modern slavery. to assess the risk of modern slavery in our supply chains. considerations into our major When using the tool, they considered a range of risk support the identification of modern slavery risks procurement and sourcing projects We have published our short-form master factors, including: in our supply chains; valued over AUD$250,000 services agreement on our website so that work with suppliers to address these risks; future suppliers can clearly understand our the geographic location of the supplier, expectations in relation to modern slavery. including known import or export locations; We developed modern slavery questions to be included improve transparency; in all tender/request for proposal (RFP) documents If a supplier’s performance relating to modern the category of the product or service identify areas for further due diligence; and issued by CPA Australia. This includes up to five slavery is below standard during the term of being procured (e.g. financial services, questions depending on the nature of the procurement. an engagement, we would prefer to engage recruitment services); allow both parties to begin working together Since May 2020, every tender/RFP document issued positively with the supplier and use our leverage to address and remediate any identified risk the use of labour hire in the delivery of the by us to potential suppliers has included at least one as a customer to address the issue, prior to factors in the supply chain. goods and services (including the employment modern slavery question. This allows us to assess considering termination rights. modern slavery risk and undertake further due diligence of vulnerable people); and This is our first instance of engaging suppliers on such and assessments prior to engaging a supplier. For Providing training to Board Directors, matters and we intend to continue it throughout 2021. whether the supplier has any public evidence of example, in 2020 we issued a RFP document for ICT employees and contingent workers on the By engaging with the suppliers we spend the most with, compliance with human rights and modern slavery services to replace our core technology systems. This MSA and modern slavery risks we can have greater leverage to effect change. However, laws (e.g. a published modern slavery statement sector can involve high modern slavery risks and we we recognise that the amount of spend on goods and We are working to ensure all our employees are or human rights policy). included modern slavery questions in the RFP document services does not always correlate with modern slavery aware of the key concepts relating to business and assessed all responses. After considering these factors, our Procurement risk and that once-off suppliers and smaller suppliers and human rights, including modern slavery. Team undertook an initial assessment of the overall may also have high modern slavery risks. We plan to This training module includes content relevant risk level of our procurement in relation to modern expand and refine our supplier engagement in ways to the Australian MSA. In 2020, 97 per cent of slavery. Using this tool, we analysed more than $56 such as engaging low-spend suppliers with other Making modern slavery risk considerations mandatory employees and contingent workers (in Australia million, or approximately 62 per cent of our 2019 high-risk factors, for example, geographic or for all procurement valued over AUD$25,000 and overseas) completed this training. procurement spend (Tier One of our supply chains industry risk. Since April 2020, every employee (including those in our Our Legal Team also provided additional only), to assess modern slavery risk in relation to bespoke training to employees in our these suppliers. controlled entities) who manages a new contract with a supplier valued over $25,000, must first complete an International, People and Culture and We developed our risk assessment tool with Writing to the external manager internal Approval to Proceed (ATP) form. The form asks Procurement Teams, including employees reference to key international indices, including of our investments to outline the expectation that the contract manager to indicate whether modern slavery at our controlled entities. our investments and portfolios are not causing or risks have been identified before engaging the supplier the Global Slavery Index and official Australian We believe that these business units require contributing to modern slavery and and provides practical examples of modern slavery risks, Government guidance material. We will continue to additional knowledge of modern slavery risks in that risks are being addressed such as high-risk industries, products or location of the undertake risk assessments of our Tier One suppliers their day-to-day work and must understand when to ensure we identify changes to our modern slavery supplier. If any risks are identified, the contract manager This engagement helps us understand the approach our to escalate any modern slavery matters to our risk profile. must contact our Procurement Team to obtain a supplier external manager takes in relation to modern slavery Executive Management Team. risk-assessment questionnaire and guidance regarding risk. We will continue to monitor whether our external modern slavery in the procurement process. We estimate manager reports on modern slavery risks, both as a that this action could result in modern slavery risk supplier and in relation to the managed investment considerations in the procurement and/or renewal process assets, and the quality of these reports, including under for approximately 300 suppliers between April 2020 and the MSA. Our portfolio assets and companies must not April 2022. be causing or contributing to modern slavery.
22 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 23 D. TRACKING THE F. REMEDIATION EFFECTIVENESS OF OUR ACTIONS We are equipping ourselves to respond to, and – where appropriate – remediate cases of We are tracking the effectiveness of our response to modern slavery we may identify in the future. monitor how the steps we are taking are impacting This is by: our risks, by: Updating our Whistleblower Policy to Holding regular meetings of our Modern specifically include modern slavery as Slavery and Human Rights Working Group an example of reportable conduct
Our Modern Slavery and Human Rights Working Our Whistleblower Policy sets out the framework for Group is the primary way we track the effectiveness receiving, investigating and addressing allegations of our response to modern slavery risks. During of reportable conduct (including modern slavery) 2020, the working group met regularly to drive where it concerns the activities of CPA Australia action, and track and review our progress. Further or current and former directors, officers, agents, information about how we measure the effectiveness employees and contractors. A whistleblower is of our actions to assess and address modern slavery anyone who makes or attempts to make a report risks is set out in section 6. of reportable conduct under the Whistleblower Policy, and is, or has previously been, an officer, employee, supplier of goods or services or an E. COMMUNICATING associate of CPA Australia or is a relative or OUR PROGRESS dependent of such persons.
This policy is a key component of our risk We are sharing our progress and actions with governance and corporate governance framework. members and the public to ensure we remain accountable for how we address our modern If a whistleblower is uncomfortable or unable to slavery risks, by: report misconduct internally, they can make a report anonymously via CPA Australia’s external Developing and publishing our first modern and independent whistleblowing service provider slavery statement Your Call, which allows for a clear, safe way for This is our first modern slavery statement and will individuals to lodge a reportable conduct complaint be the primary tool we use to communicate with on modern slavery. members and the public about the steps we are taking to combat modern slavery. There were no modern slavery concerns identified through our whistleblower program in 2020
In 2020, 97 per cent of all Board Directors, employees and contingent workers completed whistleblower awareness training to ensure they are aware of their rights and obligations under the policy and the law. In addition, we implemented role-specific whistleblower training for the Board, Executive Management Team and senior managers.
24 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 25 5 MEMBER ENGAGEMENT AND COLLABORATION
Collaboration is the key to addressing In 2020, we worked closely with members, the While COVID-19 restricted our member engagement modern slavery risk because it promotes broader profession and the community to foster activities during 2020, we anticipate we will be able to best practice and the sharing of ideas. actions that combat modern slavery. broaden these opportunities as restrictions ease. Key actions included: As a member-based organisation, we are committed to supporting and equipping members with the tools to engaging various experts for the development Our engagement of our INTHEBLACK article on modern take action to address modern slavery. Accountants have on ESG matters a key role to play in supporting businesses to combat slavery (see page 11 for further information); modern slavery. They must be able to recognise it as a working with academics from the University Our Policy and Advocacy business unit is primarily risk to businesses’ financial sustainability, support the of South Australia and the Australian National responsible for executing our strategic goal identification and mitigation of modern slavery risks University to publish an academic report on to impact policy and be active in community linked to procurement spend, and assure businesses’ modern slavery and business (see page 29 advocacy. This goal is pursued through a range modern slavery responses. for further information); of objectives, such as enhancing and increasing the policy and advocacy work undertaken for the consulting with the Australian Border Force benefit of members and the broader community. to discuss our modern slavery response This includes modern slavery. Reflecting our Non-compliance with laws and the impact of the new reporting public policy and public interest imperatives, and regulations regime on members; along with the diverse representation of the membership, our policy and advocacy efforts developing environmental, social and extend into a broad range of subject matters The accounting profession is distinctive in its acceptance governance (ESG) tools, templates and under the heading ‘ESG’. of the responsibility to act in the public interest. Formal resources to support members’ needs, recognition is given in APES 110 Code of Ethics for including a resource for accountants to Work in this area is coupled with a foundational Professional Accountants (the Code), which clearly assist in companies’ compliance with the emphasis on ethical behaviour and robust states that the responsibility and standard of behaviour MSA from external reporting and organisational governance, along with an required by every CPA Australia member in relation management accounting perspectives; and enduring interest in emerging forms of to each of the fundamental principles of integrity, non-financial (narrative) disclosure. We have objectivity, professional competence and due care, investing in two significant research projects been actively engaged in the development of confidentiality and professional behaviour, is not relating to the Sustainable Development the modern slavery reporting law reforms through exclusively to satisfy the needs of an individual client Goals (SDGs). These explore the utilisation detailed and supportive submissions to public consultations, including those of the Standing or employing organisation. One of the most important of the SDGs in corporate reporting, and Committee on Foreign Affairs, Defence and manifestations of this responsibility towards the analyse governance and accounting practices Trade and Attorney-General’s Department. public interest is in relation to non-compliance with affecting the prioritisation, implementation Some of our senior staff also participated in laws and regulations (NOCLAR). NOCLAR imposes and reporting of the SDGs by Australian firms workshops dealing with the legislative design. ethical obligations on members with respect to acts (undertaken in 2020 and due for finalisation in 2021). We will continue to ensure members or omissions which are contrary to prevailing laws and We are actively supporting the implementation are equipped to respond to SDG Target 8.7, regulations that are encountered by a member in the of the MSA through the initiatives outlined in course of carrying out professional activities, such as which deals specifically with modern slavery this section. Our policy work on modern slavery modern slavery. Aside from the consequences of fines and related forms of human rights abuse. is supported by our ESG Centre of Excellence, and litigation for the employing organisation, the Code Our membership of the UN Global Compact which consists of 11 members who advise emphasises the wider public interest implication of Network Australia (GCNA), part of the world’s management on policy and issues relating to such non-compliance with potential harm to investors, largest corporate sustainability initiative, corporate ESG matters, including modern slavery. creditors, employees and the general public. is just one way we are doing this.
26 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 27 PUBLICATION OF MODERN SLAVERY COMPASS
CASE STUDY – A TOOL TO POINT BUSINESS IN THE RIGHT DIRECTION
We funded and published the research report Modern Slavery HOW CAN Compass – a tool to point business in the right direction by Dr Katherine Christ CPA, University of South Australia, and Professor ACCOUNTANTS Roger Burritt FCPA, Australian National University.
HELP TO ADDRESS The purpose of the Modern Slavery Compass and the report is to provide a tool that supports businesses grappling with the MODERN SLAVERY? management and reporting requirements of the MSA.
Case 1 Estimates suggest there are currently Jennifer is an accountant contracted to support a more than 40 million people enslaved local abattoir to complete their financial reporting. worldwide, many of these in corporate When going over the business financial data, Jennifer realises that the abattoir appears to not be supply chains. The economic value paying some of its workers. The manager tells Jennifer attributed to this activity is enormous the workers are migrant labourers and their pay is being withheld to cover the costs of their travel to Australia with G20 countries importing and accommodation. Although the manager says $354 billion of at-risk goods every the workers agreed to the arrangement, Jennifer is year. These figures represent an concerned and reports the situation to the authorities. Further investigations reveal the workers are being held uncomfortable truth and highlight in debt bondage (a form of modern slavery) and are the need for action. being required to pay off significantly inflated debts relating to their travel and accommodation. Dr Christ and Professor Burritt Case 2 CPA Australia used the Modern Slavery Compass as we rolled out Layla is an in-house accountant at a global fashion our 2020 modern slavery project plan. In doing so, we helped reduce company. While assisting the procurement team with various operational and supply chain risks. a review of supplier spend, she notices that one textiles supplier appears to have significantly lower costs than This publication follows the 2019 publication of a report titled other similar suppliers used by the company. Layla flags Regulating transparency and disclosures on modern slavery in this with her colleagues, who engage with the supplier global supply chains by Associate Professor Justine Nolan, Associate and find evidence of significant worker underpayment Professor Jolyon Ford, and Professor M. Azizul Islam. This was a (a red flag that modern slavery may also be occurring). research project supported by a grant under CPA Australia’s Global Research and Perspectives Program. The businesses and individuals in these case studies are fictional. We believe that by funding and publishing such reports, we can help support members to address modern slavery risk.
28 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 29 6 ASSESSING THE EFFECTIVENESS OF OUR ACTIONS AND OUR FUTURE PLANS
Effectiveness of our actions Another way we assess the effectiveness of our actions Our future plans is by regularly reviewing our modern slavery risk assessment for our supply chains to ensure it remains Tracking the impact of our actions to combat modern Our response to modern slavery is based on a up to date. We also monitor compliance with our key slavery risks is a key part of our response to modern slavery. continuous improvement approach. policies relevant to modern slavery via: This monitoring and assessment helps us to understand In 2021, we will engage recognised business and human what works and where further action is needed. our internal auditor; rights experts Pillar Two to collaborate with us on a We believe an effective response to modern slavery involves whistleblowing reports; Modern Slavery Gap Analysis project. This project will being able to accurately identify, understand and respond develop a future roadmap that guides our actions to to our modern slavery risks, and remediate any instances our suppliers’ responses to procurement combat modern slavery. As part of the gap analysis, we where we have caused or contributed to modern slavery. questionnaires; and will review our key policies and processes that relate to As our modern slavery response expands and matures, modern slavery and interview employees from key areas we will continue to build in ways to assess the effectiveness Board Director, employee and contingent of the business. This will help identify gaps between of our actions. worker training completion. current policies and processes, and the MSA mandatory criteria and other human rights standards. This work will: Specific measures we have tracked during the year include: result in a set of recommendations to strengthen our response and a three-year continuous Effectiveness 97 per cent of our Board Directors, employees improvement roadmap; and and contingent workers have undertaken online help us better track the effectiveness of our We currently assess the effectiveness of our actions compliance training relating to modern slavery modern slavery response over the medium term. through our Modern Slavery and Human Rights Working as of 31 December 2020; Group. The working group meets regularly and brings The findings, recommendations and roadmap will together representatives from key areas of the business. 100 per cent of procurement RFP documents released after May 2020 included modern be presented to our Executive Management Team One of their key roles is to track the actions assigned to and ARCC. each business unit in our modern slavery project plan. slavery questions; and Further detail about the working group is set out in no reports of modern slavery were received section 4. through our whistleblowing channels.
Our internal auditor also completed a review of our Whistleblower Policy in 2020
We understand that these metrics may not always provide a complete picture of the effectiveness of our actions. For example, suppliers may respond to procurement questionnaires with incorrect or misleading information. Over 2021, we will work to expand and refine these indicators.
30 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 31 7 HOW WE CONSULTED WITH OUR CONTROLLED ENTITIES TO PREPARE THIS STATEMENT
We worked with our three owned and controlled entities to prepare this statement. The boards of these controlled entities understand our expectation that they act in accordance with our standards, policies and procedures, including those relating to modern slavery and human rights.
During the development of this statement, the CPA Australia Modern Slavery and Human Rights Working Group provided drafts to selected directors of each of these controlled entities, in order to seek their contributions and feedback.
Some of the board members of our controlled entities also have day-to-day management roles in CPA Australia. This means they have an operational understanding of the steps we are taking to reduce the risk of modern slavery in our operations and supply chains, and how these actions relate to our controlled entities.
For example:
the CPA Australia Advice Pty Ltd Company Secretary is also a Director and the General Counsel and Company Secretary of CPA Australia Ltd and is the Chair of our Modern Slavery and Human Rights Working Group;
a CPA Australia Advice Pty Ltd Director is also the CFO of CPA Australia Ltd and is a member of our Modern Slavery and Human Rights Working Group;
two directors of CPA Australia (Shanghai) Co. Ltd. are also members of the CPA Australia Executive Management Team and one of these directors is a member of our Modern Slavery and Human Rights Working Group.
32 I CPA Australia Modern Slavery Statement 2020 CPA Australia Modern Slavery Statement 2020 I 33 APPENDIX
Mandatory requirements under the Australian Modern Slavery Act 2018 (Cth) and the UK’s Modern Slavery Act 2015.
Australia’s Modern Slavery Act 2018 UK’s Modern Slavery Act 2015 Statement section (Cth) mandatory reporting criteria recommended reporting criteria addressing this requirement
Mandatory criterion one: Identify the reporting Organisation’s structure, business and Section 1: About this statement entity. supply chains.
Mandatory criterion two: Describe the structure, Section 2: Our structure, operations and operations and supply chains of the reporting supply chains entity.
Mandatory criterion three: Describe the risks of The parts of the organisation’s business and Section 3: Our modern slavery risks modern slavery practices in the operations and supply chains where there is a risk of slavery supply chains of the reporting entity, and any and human trafficking taking place, and entities that the reporting entity owns or controls. the steps it has taken to assess and manage that risk.
Mandatory criterion four: Describe the actions Organisation’s policies in relation to slavery Section 4: Our actions to assess and address taken by the reporting entity and any entity that and human trafficking; its due diligence modern slavery risks in our operations and the reporting entity owns or controls, to assess processes in relation to slavery and human supply chains and address those risks, including due diligence trafficking in its business and supply chains; and remediation processes. and the training about slavery and human trafficking available to its staff.
Mandatory criterion five: Describe how the Organisation’s effectiveness in ensuring that Section 6: Assessing the effectiveness of reporting entity assesses the effectiveness slavery and human trafficking is not taking our actions and future plans of such actions. place in its business or supply chains, measured against such performance indicators as it considers appropriate.
Mandatory criterion six: Describe the process of N/A Section 7: How we consulted with our consultation with any entities that the reporting controlled entities to prepare this statement entity owns or controls. In the case of a reporting entity covered by a statement under section 14 – the entity giving the statement.
Include any other information that the reporting N/A Section 5: Member engagement and entity, or the entity giving the statement, collaboration considers relevant. Section 6: Assessing the effectiveness of our actions and future plans
34 I CPA Australia Modern Slavery Statement 2020 cpaaustralia.com.au