The Modern Slavery Act (‘Act’) requires qualifying businesses to publicly report, in a slavery and trafficking statement, the steps they have taken to ensure their operations and supply chains are trafficking and slavery free. The duty applied to organisations with year-ends from 31 March 2016.
Last week, the UK’s Anti-Slavery Commissioner gave Parliament his assessment of how business had responded to the Act’s reporting duty in the first year. He believes that the Act has driven up director-level awareness of modern slavery and has resulted in some businesses taking practical steps to tackle the issues.
However, he characterised many of the initial slavery and trafficking statements as weak. He urged businesses to do more to understand and to mitigate their industry specific risks, including working collectively to combat shared sector risks, and to provide greater information in their statements on how they are responding.
Looking back at the first twelve months’ slavery and trafficking statements
The Business and Human Rights Resource Centre hosts a registry of modern slavery statements by businesses. At the time of writing, there are 1627 statements spanning 29 sectors and 26 countries. While it is early days for many organisations, these statements typically show good reporting by businesses on their anti-slavery policies and poor (or non-existent) reporting when it comes to training, due diligence, risk assessments and measuring performance. Some statements do not comply with the Act’s minimum requirements (to be signed and approved at the highest level in the organisation and made accessible from the organisation’s homepage).
For further information on how companies have initially responded, as well as practical tips, read our briefing. To help businesses reduce the risks of modern slavery and demonstrate that such risks are addressed seriously and proactively, we have launched a modern slavery e learning tool (see here).
Businesses, modern slavery and a growing reputational risk
There are limited penalties for non-compliance with the Act’s duty to report. Instead, the Government is relying on pressure groups, consumers, investors, parliament and others to subject organisations to reputational campaigns and other scrutiny to compel action. This has been demonstrated over the last twelve months by:
- the Prime Minister setting up the first ever Government task force on modern slavery to help drive enforcement of the Act
- a Private Member’s Bill seeking to strengthen the Act’s corporate duty to report and a Parliamentary Committee taking evidence on the Act: both show that MPs remain focused on business responding effectively to the Act
- pressure group and media scrutiny of modern slavery statements published to date, including critical FT coverage of some from the FTSE 100
- investigative and undercover journalism into worker exploitation, modern slavery and trafficking including allegations of unsafe and exploitative working conditions in British clothing supply chains as well as supply chain abuses abroad (such as in the electronics, construction and food sectors)
- the high media profile given to recent modern slavery convictions and related litigation, including the jailing of two traffickers who had supplied workers via an agency to Sports Direct and the reported £1m+ compensation agreed in a case involving workers allegedly exploited in the UK agricultural sector
- The increasing number of authoritative benchmarking surveys: these rank some of the largest companies on their slavery or human rights performance and are gaining traction. Examples include Know the Chain and the Corporate Human Rights Benchmark.
The next twelve months: what next?
Despite progress being made, there are growing calls for the current reporting regime to be strengthened. This could include criminal and civil penalties and sanctions, as well as commercial, such as excluding non-compliant businesses from public procurement.
The Anti-Slavery Commissioner, as well as the Government, have not publicly supported changing the law, preferring to give organisations more time to build on their statements year on year. However, the Commissioner wants the Government to publish a list of those businesses required to report under the Act, calling this ‘an absolutely vital tool’ if they are to be held to account.
In summary, while the verdict on the first slavery and trafficking statements is positive in parts, there is a long way to go and organisations face the threat of adverse attention and further government action if sustained improvements are not made.