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State of play

Whilst the UK’s modern slavery legislation was welcomed by campaigners and NGOs across the globe, corporate compliance has been weak and, when businesses do comply, there has been a poor standard of reporting. By March 2018, the Business and Human Rights Resources Centre estimated that only two thirds of up to 11,000 firms required to comply have issued modern slavery statements so far. This has not gone unnoticed at the highest levels of Government. In response to the lack of compliance, the Home Office updated its guidelines in October 2017  making it clear that companies which fall within the scope of the Act are expected to publish a modern slavery statement ‘at most’ 6 months after their financial year end. The updated guidance also emphasised the expectation that businesses show year on year progress. The Government, too, has  faced heavy criticism for being weak on enforcing compliance with the Modern Slavery Act, particularly Section 54, which mandates certain organisations to produce a human trafficking statement. Critics point to the fact there is no register of companies which are required to report, saying this has led to a culture of non-compliance. In a recent oral evidence session of the Public Accounts Committee, Labour MP for Stoke-on-Trent Central, Gareth Snell, lambasted both the Home Office and the Office of the Anti-Slavery Commissioner for having presided over a ‘process we are not using’ and one which we ‘cannot enforce’.  On top of this, recent data highlighted that only 58% of the Government’s top 100 suppliers met the required standard of reporting. Recent headlines will only serve to intensify the pressure on the business community and the Government. In the last week alone, the National Crime Agency revealed the number of modern slavery cases being referred into the system has increased by 35% in the last 12 months. Liam Vernon, a Senior Manager in the NCA’s Modern Slavery and Human Trafficking Unit, described the findings as ‘truly shocking’ adding ‘there isn’t a region in the UK which isn’t affected’. The UK Government, determined to demonstrate that it is willing to do more than simply talk tough in the face of recent criticism, is now consulting on legislative changes to the Modern Slavery Act which include:

  • extending the obligations imposed by the Modern Slavery Act to public bodies
  • requiring the Secretary of State to publish a list of all commercial organisations that are required to publish a transparency statement; and
  • excluding operators from public procurement where the operator has not prepared a transparency statement

Emily Kenway, Labour Market and Private Senior Adviser in the Office of the Anti-Slavery Commissioner, also stressed recently that, now the legislation has moved beyond its infancy, the Secretary of State will not shy away from commencing proceedings  to obtain an injunction to force compliance. With significant political pressure on them, what, then, can businesses do to ensure that they are not only compliant with the Act, but they show both progress and leadership in rooting out modern slavery from their supply chains?

What should businesses do?

Three years on from the introduction of the Modern Slavery Act, the Office of the Anti-Slavery Commissioner, Kevin Hyland, has made it robustly clear how it wants large organisation to approach modern slavery; prevent; detect; investigate and prosecute. A perfect modern slavery statement, Hyland has stated, would encapsulate:

  • Supply chain mapping
  • Risk analyses
  • Training staff and educating them about modern slavery
  • High level accountability
  • Working with expert on the ground NGOs

Businesses are also encouraged to work collaboratively with organisations in their industry, either through a trade body or by other means, to ensure that sector specific initiatives and resources are targeted towards rooting out forced labour and modern slavery. It is vital that businesses demonstrate progress year-on-year and in this respect the Government has made it clear that it expects organisations to set key performance indicators covering everything from corporate human rights policies, to risk analysis and due diligence to remediation processes. Businesses must also interrogate and robustly analyse the modern slavery data they have available and ensure they are working with, but importantly beyond, Tier 1 suppliers to root out criminality at a lower level of the supply chain. On the third anniversary of the Modern Slavery Act, businesses should be demonstrating that they are not only compliant with the legislation, but that they have developed a strategy, which goes beyond box ticking, and begins to root out the scourge of slavery out of their supply chains all together. As the Anti-Slavery Commissioner’s office has stated, organisations must be brave. For both investors and investee companies, interrogating supply chains is not about not finding instances of modern slavery – they are there. Businesses must now be brave enough to find it. Ultimately, identifying modern slavery in your supply chain demonstrates that your strategy is working. Responsible companies will identify modern slavery and root it out, demonstrating leadership and reaping reputational rewards, at a time when pressure on the business community is a strong as ever.

If you would like more information on the Modern Slavery Act 2015 and how business can move from compliance to leadership, please email Alice Wood on alice.wood@lexcomm.co.uk 

 

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