Half-baked: where have the Modern Slavery Statements fallen down?

Over 1,800 modern slavery statements were submitted by businesses in the UK to the Home Office as a response to the Modern Slavery Act issued in 2015. Our team analysed those published by the food & beverage sector and learned that there’s a long way to go before these businesses can fully meet the guidelines. 

 

The Modern Slavery Statements published by businesses in the food and beverage sector show a wide spectrum of comprehensiveness, with many failing to address key requirements of the Modern Slavery Act set by the UK’s Home Office. From our in-depth analysis of the statements published for this sector, only two out of ten meet all the guidelines, and clearly demonstrate the company’s commitment to address and reduce the potential risk of modern slavery in their operations and supply chains. For the rest, there is still a long way to go with many statements  still falling short on a considerable proportion of the requirements.

Understanding what the most common pitfalls are across the sector and where the government guidelines are potentially getting misinterpreted, will provide a vital starting point for businesses to re-evaluate and improve their statements, and ultimately, help to address the key issue – mitigation of modern slavery in supply chains.

 

What are the four most common pitfalls in the modern slavery statements?

  1. Missing: prominent link on company homepage
    Despite this being a legal requirement of the Act, a surprisingly large amount of companies have not completed this simple step, even though they have published their statements online. Currently one in five businesses have failed to add a link to their homepage and therefore have not complied with regulation. It is a requirement that the statement link is clearly visible to guide viewers. For example, many businesses added the link on the website banner at the bottom of their homepage or in a drop menu at the top of the page. Both are good examples.
  2. Lack of commitment: statement not signed off by senior management
    One in five statements has not been signed off by a director (or equivalent). In such cases businesses have not only failed to meet the legal requirements of the Act, but they also send the message that the business does not take the issue of modern slavery seriously, even if this is not necessarily the case. Due to the gravity of the issue, senior management in every business should be championing their business’s approach to addressing modern slavery in their operations and supply chains.
  3. Unidentified: lack of risk assessment being carried out
    Three out of four statements have not carried out a risk assessment, or at least, have not disclosed that they have. Risk assessments should be the bedrock of a company’s approach to mitigating modern slavery. Understanding where the business’s most material risks are in the supply chain will allow the company to focus their attention and resources where it really matters. This is especially important in the Food and Beverage sector as supply chains are often complex and located in areas of higher risk. Businesses should look beyond their tier one suppliers to fully understand the risks of their supply chain, whilst allowing them to provide more depth to their statements.
  4. Call to action: limited depth of due diligence measures
    80% of businesses have started to outline their due diligence processes in their statements, however many lack depth and do not detail and explain the practical actions being taken. A broad description is often provided and is limited to their immediate business and, failing to have carried out a risk assessment, appear unable to develop and disclose risk focused actions to mitigate risk. Comprehensive due diligence measures should include detailed actions for identifying actual and potential risks, mitigating and addressing these risks and additionally for effective communication throughout the business.

Our analysis of the modern slavery statements by businesses in the food and beverage sector shows that there is still a long way to go for most businesses which failed to meet the Act’s requirements. Addressing such a complex problem as the risk of modern slavery in a global economy is not easy and there is certainly no size fits all solution. In order for businesses to move forward with their statements and to fully address their exposure to risk, and to genuinely address modern slavery, it is essential they first address these highlighted pitfalls. This year, businesses may be able to get away with little commitment, but this will change as stakeholders and customers’ expectations increase.