One of the biggest threats to a retailer's reputation is an allegation of involvement in slavery, human trafficking, or child labour. Retailers are now expected to be more transparent than ever, with the Modern Slavery Act 2015 requiring commercial entities which carry on business in the UK and which have a global turnover above £36 million to publicly report in an annual slavery and trafficking statement which steps (if any) they are taking to combat trafficking and slavery in their operations and supply chains.
This article sets out some practical steps retailers can take to ensure their supply chains are slavery-free.
A retailer should constantly be assessing and identifying slavery and trafficking risks in their operations and supply chains, and be prioritising those risks for further investigation and/or action. Before entering into a supply agreement, retailers should exercise due diligence and require the supplier to provide information necessary to establish whether or not it (or any of its sub-contractors and sub-suppliers) are involved in misconduct.
The supply contract itself can be a key source of assurance that a supply chain is clean. A retailer can:
- require the supplier, in performing its obligations under the agreement, to comply with an anti-slavery policy and with all applicable anti-slavery and human trafficking laws, statutes, regulations and codes in force from time to time (including the Modern Slavery Act 2015), and also require the supplier to include similar provisions in its contracts with its sub-contractors and sub-suppliers;
- prevent the supplier from sub-contracting or sub-supplying without its written consent, thereby giving the retailer the opportunity to vet the third party and veto the engagement if necessary; and
- require the supplier to maintain documentary evidence of the age of each of its employees to ensure that minimum legal age requirements are being met.
A diligent retailer should frequently visit and inspect its suppliers to satisfy itself that it is contracting with responsible entities.
The danger to UK companies is that they may inadvertently become involved in malpractice in their supply chain, but turning a blind eye or omitting to take active steps to prevent slavery will not be sufficient in the eyes of the law (or consumers).