Modern slavery is a global phenomenon and a supply chain challenge for business. The Walk Free Foundation's 2014 Global Slavery Index indicates that there are an estimated 38.5 million men, women and children trapped in modern slavery globally with particularly high concentrations in countries such as India, China and Pakistan. The UK is not immune, with the first official Home Office figures on the issue suggesting there were between 10,000 and 13,000 potential victims of modern slavery in 2013 (a figure growing year by year).
Public scrutiny will provide the primary incentive for compliance with the MSA...
While the figures may surprise some, it is important to recognise that the concept of modern slavery is much broader than the term may imply; and from a UK perspective includes slavery, servitude, forced and compulsory labour and human trafficking. The Modern Slavery Act 2015 (MSA) is the UK's latest response to this local and global problem, and apart from clarifying and consolidating existing criminal offences and increasing victim protection, it has brought transparency and a need to focus on modern slavery in supply chains to the forefront.
Part 6 of the MSA requires commercial organisations (body corporates or partnerships carrying on part of their business in the UK) that supply goods or services to prepare and publish on their website a slavery and human trafficking statement each financial year if the company has a turnover exceeding a yet to be prescribed threshold (expected to be published in October 2015). A "slavery and human trafficking statement" is a statement of the steps the organisation has taken to ensure that slavery and human trafficking is not taking place in any of its supply chains and in any part of its own business, or, alternatively, a statement that the organisation has taken no such steps. The MSA indicates that the statement may include information about (a) the organisation’s structure, its business and its supply chains; its policies in relation to slavery and human trafficking; (b) its due diligence processes in relation to slavery and human trafficking in its business and supply chains; (c) the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk; (d) its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate; and (e) the training about slavery and human trafficking available to its staff.
Public scrutiny will provide the primary incentive for compliance with the MSA - legal sanctions are limited, with the Secretary of State merely empowered to commence proceedings to obtain an injunction requiring an organisation to prepare a statement. In any event, negative attention from the new Anti-Slavery Commissioner, shareholders and civil society (NGOs, human rights groups, customers) may prove effective drivers of compliance, particularly if the organisation is already in the spotlight over its supply chains.
There will undoubtedly be significant differences in the approaches organisations take to supply chain due diligence and management; with a risk-based approach the most sensible way forward (perhaps taking lessons from adequate procedures requirements under the UK Bribery Act). There are, for example, key sectoral (such as agriculture, construction, food-processing, and home/domestic work) and country risks, which will act as drivers of enhanced due diligence for those affected. Supply chain mapping will be essential to understanding risks and exposure, with clear procurement policies, contractual protections in supply contracts (warranties, reporting requirements, audit rights etc), and consistent messaging throughout the supply chain all having an important role to play. Adequate training of employees and local agents will also be essential to sensitize them to the issues. Although larger companies will be subject to the reporting requirement, suppliers of any size need to take note, as they will undoubtedly come under pressure to ensure their own supply chains are in order.