Modern Slavery – what are you doing?
Recent press reports on working conditions in UK-based garment factories, and allegations of exploitation of Indian factory workers in the supply chain of major UK brands, have highlighted the reputational risks to businesses of perceived ethical failures in respect of their supply chain. This raises questions of modern slavery and this issue is something that UK businesses have to grapple with to ensure that their products are ethical.
Since 2016, section 54 of the Modern Slavery Act 2015 has required certain large commercial organisations to publish a modern slavery statement on their website. This must be done annually, and detail what steps have been taken to ensure that modern slavery and human trafficking are not taking place in their business or supply chain.
But enforcement of this is minimal, and monitoring of compliance with this obligation has been undertaken by the press.
The Government’s long-awaited response to a consultation on changes to the section 54 requirements mean that businesses will face stricter reporting requirements. These cover mandated contents for modern slavery statements, a single reporting date and a central government register of statements. The Government is also considering a new regime of penalties and sanctions for those that fail to comply. These steps are intended to improve the quality and content of statements, and to allow external stakeholders to make decisions on how they view an organisation’s approach to these issues.
As well as the reporting requirements, there will also be amendments to the forthcoming environment bill. These changes require large UK-based businesses to undertake due diligence to ensure supplies of forest-risk commodities have not been produced by illegal deforestation. Companies that fail to comply will be subject to fines and other civil sanctions.
As a result, businesses should undertake the following initial steps to future-proof their supply chains:
- Decide where you stand from a business and cultural perspective on these issues. What are the expectations of your key external and internal stakeholders? What are the critical questions about your business and your supply chain you need answering when tendering for business?
- Map out your supply chain, tracking as many tiers of the chain as possible. The results will enable you to conduct a vital risk assessment of your biggest vulnerabilities.
- Introduce or review existing policies and codes of conduct relating to suppliers to ensure they reflect current and future best practice and provide training to relevant internal personnel.
- Review your key supplier contracts to ensure they are fit for purpose. For example, what requirements do they place on your suppliers relating to issues of modern slavery?
While it is impossible to anticipate all the risks that employers might face in the future, proper contingency planning is one of the key actions a business can take to mitigate potential damage.