With victims of modern slavery in England likely to number over 10,000, we consider supply chain transparency requirements for academy trusts.
A number of larger academy trusts have now published a Modern Slavery Statement. Some are required to do so under the Modern Slavery Act. Others have taken the decision to publish a statement even though they are not compelled to do so.
What is modern slavery?
The offence of modern slavery includes subjecting someone to slavery or servitude, forced or compulsory labour, including child labour, and human trafficking. It often entails breaches of human rights law, employment law and health and safety regulations, harsh and inhumane treatment, and exploitatively low pay and long hours.
Does your academy trust have to publish a statement?
Every incorporated organisation or partnership carrying on a business in the UK with a total annual turnover of £36 million or more is required to produce a slavery and human trafficking statement for each financial year.
Chris Billington, Head of Education at Wrigleys notes that "academy trusts are caught by the modern slavery legislation if they have sufficient turnover. Their educational activities and charitable status do not exclude them from compliance; GAG funding and other sources of income count toward the turnover level. A multi academy trust must aggregate income across all their schools".
Smaller academy trusts may decide voluntarily to produce a statement and to take action to prevent modern slavery in their supply chains. As more and more organisations publish statements, develop policies and commit to the principles behind the Act, academy trusts may also find that they are required to produce a statement or policy as a condition of a contract or funding arrangement.
Refreshed Government guidance
This month has seen the publication of updated Government Guidance on Transparency in Supply Chains which sets out best practice for organisations which have to comply with the Act. The guidance stresses the importance of transparency so that the public are aware of the steps which organisations are taking or not taking to prevent modern slavery and human trafficking taking place in their supply chains.
The guidance makes clear that a statement can set out proposed future actions as well as any action already taken but emphasises that there is an expectation that actions should be built on year by year and that progress towards stated goals should be regularly reviewed.
What to include in a statement
The statement will either set out steps the academy trust has taken to ensure that there is no slavery in its supply chain or state that the trust has taken no such steps. It should be in plain English and there must be a prominent link to the statement from the trust's home webpage. The statement must be approved by the board and signed by a director or equivalent.
Statements may include, for example, information on the structure of the academy trust, relevant policies, due diligence or risk assessment processes and details of staff training. It can cross refer to trust policies such as those for risk management, safeguarding, whistleblowing and procurement.
Academy Trusts should consider the impact of their decisions about suppliers and products on the people who work in their supply chains. Careful thought should be given to policies and procedures for sourcing goods and services, for example, stationery, uniforms, cleaning, maintenance and catering services. Procurement decisions should include consideration of full and fair labour costs and the labour standards applied to those who produce goods and services used by the trust. Due diligence should be carried out to reduce the risk that modern slavery is entailed in supply chains, including those supplying the trust's contractors.
The impact of payment practices should also be considered. For example, the pressure placed on those working in supply chains when orders are placed at short notice, or when late payment is commonplace.
The guidance highlights the need for training for relevant staff to ensure they are alert to the issues of modern slavery and human trafficking and able to take action should concerns ever arise.
Taking no action
There is no compulsion for academy trusts to take any action save for publishing the annual statement if turnover exceeds the required level. However, there will clearly be reputational risks arising from the content of the statement and in failing to publish a statement. Any academy trust which is required but fails to publish the required statement may face an injunction to compel them to publish and will be in contempt of court if they do not do so.