On the first anniversary of the Modern Slavery Act (MSA), Theresa May, Prime Minister and author of the Act, stated that “Britain will once again lead the way in defeating modern slavery and preserving the freedoms and values that have defined our country for generations” (BBC). The UK government appears very serious about an issue that will not go away without significant action from UK businesses.
As we head towards the end of September, an increasing number of UK businesses are facing compliance with the Act. It requires larger businesses to publish a statement that confirms the steps taken to ensure that slavery and human trafficking are not taking place in the business or in any supply chain, or alternatively to declare that no steps to confirm the existence of slavery or trafficking have been taken. Faced with this challenge, many businesses that have taken first steps to comply have produced ‘holding statements’, high level overviews of a general approach or indeed statements of intent. In many cases, this amounts to a ‘wait and see’ approach; producing a statement without really looking at supply chain risks and waiting to see what competitors, peers and indeed NGOs do next.
Why should businesses avoid a shortcut approach? There are three main reasons:
- Modern slavery is likely to exist in most supply chains – research from Ashridge suggests that about 70% of CEOs think slavery is present in their supply chain, some estimates have this higher still. Whatever sector a business operates in or wherever its tier one suppliers operate, any large business will have a supply chain that stretches round the globe into areas where slavery may be present. Codes of conduct only work if they are active, understood and enforced. Every business should be concerned to get this right.
- Large businesses have complex supply chains – many large businesses will be looking at supply relationships with more than 1,000 suppliers. It is risky to focus on only a small number of suppliers or to rely on responses to wide ranging supplier questionnaires (if responses do indeed come back). A business may simply miss the areas of real risks and impacts by avoiding a full view of their supply chain. A straightforward mapping of supply chain activity to detailed models of global social risk, such as Carbon Smart’s SPEAR, can provide a solid assessment of where both direct and indirect risks lie and where to focus action. It may not be your biggest or closest supplier that has issues you need to address!
- A holding statement is not enough – a short-sighted view is potentially dangerous for a business. Modern Slavery has a profile that it has not had for a very long time, it is a real and present issue for us all. The MSA statement provisions were included in response to UK businesses requesting action – business wants this issue addressed; Major businesses are taking a lead and will expect their suppliers to be doing what they should, consumers expect their brands to be right on this issue, NGOs are very active in looking at statements and the actions behind them – we can expect some businesses to be caught out. Slavery is not an issue that sits comfortably with white wash statements full of legalese; whatever the letter of the law, the Act is about action.
UK business must once again rise to the challenge. Compliance with the Modern Slavery Act does require a statement, but it is really about action, practical, focused action that will take time to put in place and get right. The clock is ticking and many, many businesses need to act today.
To learn more about the MSA compliance from our experts, or if you have questions, call Ben or Jessica at 0207 048 0450.