1 00:00:03,990 --> 00:00:06,330 Sean Aylmer: Welcome to the Fear and Greed business interview. I'm Sean 2 00:00:06,330 --> 00:00:10,740 Sean Aylmer: Aylmer. More than 40,000 people in Australia are living and 3 00:00:10,740 --> 00:00:15,360 Sean Aylmer: working in conditions of modern slavery. It's a startling statistic 4 00:00:15,420 --> 00:00:17,940 Sean Aylmer: and not a conversation you'd expect us to be having 5 00:00:17,940 --> 00:00:21,630 Sean Aylmer: in Australia in 2023. The pressure is on both the 6 00:00:21,630 --> 00:00:25,110 Sean Aylmer: federal government and companies of all shapes and sizes to 7 00:00:25,110 --> 00:00:30,119 Sean Aylmer: ensure modern slavery isn't thriving within supply chains. Nicholas Bernhardt 8 00:00:30,270 --> 00:00:34,170 Sean Aylmer: is the CEO of Informed 365, and works with some 9 00:00:34,170 --> 00:00:37,290 Sean Aylmer: of Australia's biggest companies to help stamp out modern slavery 10 00:00:37,290 --> 00:00:41,220 Sean Aylmer: from Lendlease, and Mirvac to Coles and Treasury Wine Estates. Nicholas, welcome 11 00:00:41,220 --> 00:00:41,940 Sean Aylmer: to Fear and Greed. 12 00:00:42,900 --> 00:00:44,309 Nicholas Bernhardt: Thanks, Sean. Good to be here. 13 00:00:44,970 --> 00:00:48,149 Sean Aylmer: Now, the numbers are huge, but perhaps we should do 14 00:00:48,150 --> 00:00:51,509 Sean Aylmer: a definition first so that that kind of clarifies why 15 00:00:51,509 --> 00:00:55,200 Sean Aylmer: there are so many people living in conditions of modern 16 00:00:55,200 --> 00:00:57,090 Sean Aylmer: slavery. How do you define modern slavery? 17 00:00:58,050 --> 00:01:00,810 Nicholas Bernhardt: Look, the Australian government's been very kind on this one. 18 00:01:00,810 --> 00:01:04,289 Nicholas Bernhardt: They've clearly defined what falls under modern slavery, and the 19 00:01:04,289 --> 00:01:09,569 Nicholas Bernhardt: key aspects are debt bondage, deceptive recruiting for labor or 20 00:01:09,569 --> 00:01:16,080 Nicholas Bernhardt: services, forced labor, forced marriage, servitude, slavery, and the worst 21 00:01:16,080 --> 00:01:20,009 Nicholas Bernhardt: forms of child labor. So it's pretty well- defined in 22 00:01:20,010 --> 00:01:23,158 Nicholas Bernhardt: Australia as to what constitutes modern slavery. 23 00:01:23,849 --> 00:01:27,208 Sean Aylmer: Okay. So 40,000 people are living and working in these conditions. I saw 24 00:01:27,209 --> 00:01:29,369 Sean Aylmer: some figures from a few years ago, I think it 25 00:01:29,369 --> 00:01:33,750 Sean Aylmer: was 2016, that said 15, 000 people were living in modern 26 00:01:33,750 --> 00:01:36,809 Sean Aylmer: slavery. Is the problem getting worse? Are we getting better 27 00:01:36,810 --> 00:01:39,450 Sean Aylmer: at identifying it? What's going on there do you think? 28 00:01:40,289 --> 00:01:42,660 Nicholas Bernhardt: Well, I think it's a combination of both. The problem's 29 00:01:42,660 --> 00:01:45,870 Nicholas Bernhardt: definitely getting worse because unfortunately there's still a lot of 30 00:01:45,870 --> 00:01:50,430 Nicholas Bernhardt: money to be made in making people work for nothing 31 00:01:50,430 --> 00:01:53,700 Nicholas Bernhardt: or making them work for money that no one will 32 00:01:53,700 --> 00:01:56,340 Nicholas Bernhardt: get out of bed for if there wasn't other pressures 33 00:01:56,340 --> 00:01:59,969 Nicholas Bernhardt: on them. So the problem is getting worse, and then 34 00:01:59,969 --> 00:02:04,139 Nicholas Bernhardt: it got compounded by issues such as COVID because we 35 00:02:04,139 --> 00:02:08,250 Nicholas Bernhardt: saw a huge spike during COVID as well that bumped 36 00:02:08,250 --> 00:02:10,830 Nicholas Bernhardt: up the numbers. I mean, the last number we had 37 00:02:10,830 --> 00:02:15,419 Nicholas Bernhardt: was in 2017 where the global number was 40 million, 38 00:02:15,510 --> 00:02:19,230 Nicholas Bernhardt: and that got bumped up by a significant 10 million 39 00:02:19,230 --> 00:02:23,369 Nicholas Bernhardt: in the last report, and that's now at 50 million, that was released 40 00:02:23,369 --> 00:02:28,740 Nicholas Bernhardt: last September. So at 10 million increased globally over, what 41 00:02:28,740 --> 00:02:32,070 Nicholas Bernhardt: would that be, five years. And even those numbers are 42 00:02:32,070 --> 00:02:35,700 Nicholas Bernhardt: very hard to verify as well. I would actually be 43 00:02:36,330 --> 00:02:39,389 Nicholas Bernhardt: quite cautious in saying that's the number. It could be a 44 00:02:39,389 --> 00:02:43,110 Nicholas Bernhardt: lot higher, depending obviously on the definitions in Australia, we've 45 00:02:43,110 --> 00:02:47,040 Nicholas Bernhardt: got pretty clear definitions, but I reckon the number could 46 00:02:47,040 --> 00:02:47,790 Nicholas Bernhardt: be a lot higher. 47 00:02:48,480 --> 00:02:51,240 Sean Aylmer: Okay, Nicholas. So it's not getting any better certainly. Are 48 00:02:51,240 --> 00:02:55,650 Sean Aylmer: there certain sectors or industries that are more likely where 49 00:02:55,650 --> 00:02:57,660 Sean Aylmer: we're going to see a prevalence of modern slavery? 50 00:02:58,799 --> 00:03:02,490 Nicholas Bernhardt: Absolutely. So in Australia, there's quite a few sectors that 51 00:03:02,490 --> 00:03:07,410 Nicholas Bernhardt: are typically affected by this. It's sort of the cleaning, 52 00:03:07,410 --> 00:03:13,200 Nicholas Bernhardt: security and catering side of business. It's food production, agriculture. 53 00:03:13,679 --> 00:03:16,679 Nicholas Bernhardt: If we look sort of further afield outside of Australia, 54 00:03:16,680 --> 00:03:23,430 Nicholas Bernhardt: it's clothing, fashion, electronics, solar panels, promotional products, IT, so it's 55 00:03:23,430 --> 00:03:27,540 Nicholas Bernhardt: very wide- ranging in Australia, depending, obviously we don't have 56 00:03:27,540 --> 00:03:31,740 Nicholas Bernhardt: that much manufacturing happening here anymore, but it's definitely around 57 00:03:31,740 --> 00:03:34,351 Nicholas Bernhardt: the cleaning, security, food production, agriculture. 58 00:03:34,351 --> 00:03:38,760 Sean Aylmer: Okay. How hard is it for a company, particularly a 59 00:03:38,760 --> 00:03:40,860 Sean Aylmer: large company, and you work with some of the big 60 00:03:40,860 --> 00:03:46,140 Sean Aylmer: guys, to know whether their supply chains involve modern slavery? 61 00:03:47,460 --> 00:03:49,589 Nicholas Bernhardt: It's very hard, and it's a very good question. It's 62 00:03:49,590 --> 00:03:53,759 Nicholas Bernhardt: something that is more of a journey. It's not something 63 00:03:53,760 --> 00:03:57,300 Nicholas Bernhardt: that you have instant transparency down your supply chains just 64 00:03:57,300 --> 00:04:00,030 Nicholas Bernhardt: because you want to have it. And it has taken 65 00:04:00,030 --> 00:04:03,630 Nicholas Bernhardt: the leaders in this space literally years and years to 66 00:04:04,200 --> 00:04:09,570 Nicholas Bernhardt: have that transparency. So it takes almost a forensic approach 67 00:04:09,570 --> 00:04:14,520 Nicholas Bernhardt: to start engaging with your direct suppliers and start working 68 00:04:14,520 --> 00:04:18,810 Nicholas Bernhardt: with them and pushing that message around modern slavery and 69 00:04:18,810 --> 00:04:22,469 Nicholas Bernhardt: better corporate behavior down your supply chains. So there's no 70 00:04:22,469 --> 00:04:26,368 Nicholas Bernhardt: easy fix on this. It is all about engaging with 71 00:04:26,370 --> 00:04:31,860 Nicholas Bernhardt: your suppliers, starting the narrative, starting the conversations, and building 72 00:04:31,860 --> 00:04:36,060 Nicholas Bernhardt: that picture of your supply chain as you go along. 73 00:04:36,060 --> 00:04:39,479 Nicholas Bernhardt: It is a medium to long- term project to get 74 00:04:39,480 --> 00:04:42,029 Nicholas Bernhardt: that transparency in your supply chains. 75 00:04:42,599 --> 00:04:44,460 Sean Aylmer: Stay with me, Nicholas. We'll be back in a minute. 76 00:04:44,460 --> 00:04:54,390 Sean Aylmer: My guest this morning is Nicholas Bernhardt, Chief Executive Officer of 77 00:04:54,390 --> 00:04:58,979 Sean Aylmer: Informed 365. What I thought was interesting recently, I was 78 00:04:58,980 --> 00:05:01,320 Sean Aylmer: talking to my 21- year- old and we were talking 79 00:05:01,320 --> 00:05:04,949 Sean Aylmer: about using the Black Friday, Cyber Monday sales to buy 80 00:05:04,949 --> 00:05:07,260 Sean Aylmer: stuff for Christmas. And I said, here's a really cheap 81 00:05:07,290 --> 00:05:10,830 Sean Aylmer: website, which I found it had been advertised. And his 82 00:05:10,830 --> 00:05:13,290 Sean Aylmer: response to me was, " Yeah, but do they have kids 83 00:05:13,290 --> 00:05:16,799 Sean Aylmer: making their stuff?" And what surprised me about it was 84 00:05:16,800 --> 00:05:18,900 Sean Aylmer: that he was aware of it and didn't want to 85 00:05:18,900 --> 00:05:24,630 Sean Aylmer: buy from a website, well, where he perceived modern slavery 86 00:05:24,870 --> 00:05:27,810 Sean Aylmer: could have been involved, something I had never even thought of. 87 00:05:28,560 --> 00:05:30,870 Nicholas Bernhardt: Really good point. And it is good to see that 88 00:05:30,870 --> 00:05:35,370 Nicholas Bernhardt: that generation or the younger generations are actually are aware 89 00:05:35,370 --> 00:05:38,729 Nicholas Bernhardt: of this and are looking out for these sort of 90 00:05:38,730 --> 00:05:41,819 Nicholas Bernhardt: almost warning signals. I mean, if you've got a website 91 00:05:42,240 --> 00:05:45,600 Nicholas Bernhardt: proclaiming that they've got the cheapest T- shirts, it is 92 00:05:45,660 --> 00:05:50,279 Nicholas Bernhardt: almost a given that someone in the production of that T- 93 00:05:50,279 --> 00:05:54,299 Nicholas Bernhardt: shirt, and it's normally the worker, has been exploited in 94 00:05:54,300 --> 00:05:57,389 Nicholas Bernhardt: the process. So a cheap T- shirt is a great 95 00:05:57,389 --> 00:06:00,119 Nicholas Bernhardt: thing for the one that wants to wear it, but 96 00:06:00,119 --> 00:06:02,760 Nicholas Bernhardt: maybe not so good for the person that's making that T- 97 00:06:02,760 --> 00:06:07,650 Nicholas Bernhardt: shirt. And there is sort of a common thread. So if you've 98 00:06:07,650 --> 00:06:12,150 Nicholas Bernhardt: got sectors where there's high labor intensity, there's low cost 99 00:06:12,150 --> 00:06:17,459 Nicholas Bernhardt: of products or materials, remote rural work, casual work, low 100 00:06:17,459 --> 00:06:21,330 Nicholas Bernhardt: pay, cash in hand work, temporary and migrant visa work 101 00:06:21,330 --> 00:06:25,500 Nicholas Bernhardt: is another huge problem. And even aspects such as single 102 00:06:25,500 --> 00:06:29,580 Nicholas Bernhardt: gender workforces, all of these can be sort of almost 103 00:06:29,580 --> 00:06:33,029 Nicholas Bernhardt: a warning signal that there is something that may be 104 00:06:33,029 --> 00:06:35,609 Nicholas Bernhardt: slightly amiss in a certain sector. 105 00:06:36,420 --> 00:06:39,510 Sean Aylmer: So the government has introduced modern slavery legislation in recent 106 00:06:39,510 --> 00:06:40,950 Sean Aylmer: years. Is it doing enough? 107 00:06:42,330 --> 00:06:44,879 Nicholas Bernhardt: Well, my honest answer would be, no, it isn't. It's 108 00:06:44,880 --> 00:06:48,270 Nicholas Bernhardt: a really good starting point, but it needs to have 109 00:06:48,270 --> 00:06:51,779 Nicholas Bernhardt: more bite. And in order to have more bite when 110 00:06:51,779 --> 00:06:55,770 Nicholas Bernhardt: you introduce a new legislation, it is critical to have 111 00:06:55,770 --> 00:07:00,510 Nicholas Bernhardt: something that's going to make organizations not only compliant, but 112 00:07:00,510 --> 00:07:04,020 Nicholas Bernhardt: go that extra yard as well. And in that regard, 113 00:07:04,020 --> 00:07:08,339 Nicholas Bernhardt: I'm sort of talking about penalties as a key driver 114 00:07:08,339 --> 00:07:11,759 Nicholas Bernhardt: to this and also lowering the threshold because currently the 115 00:07:11,760 --> 00:07:16,320 Nicholas Bernhardt: threshold for an organization to report is $ 100 million turnover. 116 00:07:16,980 --> 00:07:20,669 Nicholas Bernhardt: And in the last review, it's been suggested that that 117 00:07:20,670 --> 00:07:24,509 Nicholas Bernhardt: should be dropped down to 50 million turnover, which we 118 00:07:24,509 --> 00:07:28,980 Nicholas Bernhardt: would welcome in conjunction or in addition to penalties. 119 00:07:30,119 --> 00:07:32,910 Sean Aylmer: So you've worked with a bunch of big companies then, Lendlease, Stockland, 120 00:07:32,940 --> 00:07:36,330 Sean Aylmer: Mirvac, I've got the list here, Ozgreen, Treasury Wine Estate, 121 00:07:36,330 --> 00:07:39,660 Sean Aylmer: Coles, Sydney Water, Flight Centre, et cetera. What's their approach 122 00:07:39,660 --> 00:07:41,580 Sean Aylmer: to this? How seriously do they treat it? 123 00:07:42,540 --> 00:07:45,599 Nicholas Bernhardt: Look, good to see that some companies or a lot 124 00:07:45,599 --> 00:07:48,720 Nicholas Bernhardt: of organizations are really trying to do the right thing 125 00:07:48,720 --> 00:07:52,290 Nicholas Bernhardt: in this space. And the approach that we have sort 126 00:07:52,290 --> 00:07:56,370 Nicholas Bernhardt: of been promoting in this space is to work collaboratively 127 00:07:56,940 --> 00:08:01,770 Nicholas Bernhardt: because typically a new legislation gets introduced and every organization 128 00:08:01,799 --> 00:08:05,999 Nicholas Bernhardt: tries to grapple with this new legislation for better or 129 00:08:06,000 --> 00:08:09,900 Nicholas Bernhardt: for worse. And so our approach has been to work 130 00:08:09,990 --> 00:08:14,700 Nicholas Bernhardt: collaboratively and collectively with entire industries. And you've mentioned some 131 00:08:14,700 --> 00:08:19,920 Nicholas Bernhardt: of the organizations that work in a property sector consortium, 132 00:08:19,920 --> 00:08:23,999 Nicholas Bernhardt: as we call it, to try and collectively combat modern 133 00:08:24,000 --> 00:08:27,480 Nicholas Bernhardt: slavery. And I think that is the way that we're 134 00:08:27,480 --> 00:08:30,300 Nicholas Bernhardt: going to change the world. It always reminds me that 135 00:08:30,300 --> 00:08:34,140 Nicholas Bernhardt: question of one of the early conversations that we had 136 00:08:34,559 --> 00:08:37,708 Nicholas Bernhardt: around, and I think I can name the company, it 137 00:08:37,710 --> 00:08:41,820 Nicholas Bernhardt: was Stockland. They said, " Look, we're a reasonably large organization 138 00:08:41,820 --> 00:08:46,559 Nicholas Bernhardt: in Australia, but if we go overseas and we're buying 139 00:08:46,559 --> 00:08:50,099 Nicholas Bernhardt: goods and services from an organization or a factory, we 140 00:08:50,099 --> 00:08:53,309 Nicholas Bernhardt: are one of 1, 000 companies that are buying off 141 00:08:53,309 --> 00:08:57,718 Nicholas Bernhardt: that factory. We will have very little impact if we 142 00:08:57,719 --> 00:09:02,160 Nicholas Bernhardt: start demanding different ways of behaving. But if we appear 143 00:09:02,160 --> 00:09:06,210 Nicholas Bernhardt: as an entire industry where we're representing..." In this case, 144 00:09:06,210 --> 00:09:11,639 Nicholas Bernhardt: the property sector consortium represents $ 2 trillion in assets under 145 00:09:11,639 --> 00:09:15,358 Nicholas Bernhardt: management. If they go out to their suppliers and say, " 146 00:09:15,420 --> 00:09:19,290 Nicholas Bernhardt: This is the expected behavior," that's when we'll see impact. 147 00:09:20,160 --> 00:09:22,320 Sean Aylmer: What do you hope happens in the next five to 148 00:09:22,320 --> 00:09:24,840 Sean Aylmer: 10 years, Nicholas? 149 00:09:25,679 --> 00:09:29,700 Nicholas Bernhardt: Look, I've mentioned two things. Penalties and lowering of the 150 00:09:29,700 --> 00:09:33,240 Nicholas Bernhardt: threshold will be the immediate things that I'd be looking 151 00:09:33,240 --> 00:09:38,130 Nicholas Bernhardt: for, but the next step would be that every organization 152 00:09:38,130 --> 00:09:42,360 Nicholas Bernhardt: starts looking at human rights and environment and governance as 153 00:09:42,360 --> 00:09:46,259 Nicholas Bernhardt: part of doing business. That's the way of doing business. 154 00:09:46,500 --> 00:09:49,289 Nicholas Bernhardt: And it's not sort of an add- on. People are 155 00:09:49,290 --> 00:09:52,439 Nicholas Bernhardt: aware, look, there are issues in human rights. We need 156 00:09:52,440 --> 00:09:57,179 Nicholas Bernhardt: to treat our environment more respectfully. I want everything, all 157 00:09:57,179 --> 00:10:01,380 Nicholas Bernhardt: these aspects to come together, that it is business as 158 00:10:01,380 --> 00:10:05,520 Nicholas Bernhardt: usual, being a good corporate citizen, and that the ones 159 00:10:05,520 --> 00:10:09,569 Nicholas Bernhardt: that do not want to go down that path, A, 160 00:10:09,570 --> 00:10:12,000 Nicholas Bernhardt: that we shine a light on them. B, give them 161 00:10:12,000 --> 00:10:15,420 Nicholas Bernhardt: a chance to change their ways and become a better 162 00:10:15,420 --> 00:10:18,570 Nicholas Bernhardt: corporate citizen. And then, C, if they do not want 163 00:10:18,570 --> 00:10:23,850 Nicholas Bernhardt: to change, that those businesses go a sorry way. That's 164 00:10:24,179 --> 00:10:26,550 Nicholas Bernhardt: my ideal world scenario, and I'm a bit of an 165 00:10:26,940 --> 00:10:28,169 Nicholas Bernhardt: idealist, obviously. 166 00:10:28,619 --> 00:10:30,449 Sean Aylmer: That's a good thing. Nicholas, thank you for talking to 167 00:10:30,450 --> 00:10:31,200 Sean Aylmer: Fear and Greed. 168 00:10:31,530 --> 00:10:33,360 Nicholas Bernhardt: Appreciate the time. Thanks very much. 169 00:10:33,570 --> 00:10:37,980 Sean Aylmer: That was Nicholas Bernhardt, CEO of Informed 365. This is 170 00:10:37,980 --> 00:10:40,679 Sean Aylmer: the Fear and Greed business interview. Join us every morning 171 00:10:40,679 --> 00:10:43,650 Sean Aylmer: for the full episode of Fear and Greed, Australia's best 172 00:10:43,650 --> 00:10:46,500 Sean Aylmer: business podcast. I'm Sean Aylmer. Enjoy your day.