Last year, the Modern Slavery Act came into British law to address heightened levels of human trafficking and the treatment of workers in the UK. Prime Minister Theresa May’s intention was to “send the strongest possible signal that victims were not alone and that those responsible for this vile exploitation would face justice.”
The Act is made up of several strands; each initiative has a touchpoint with forced labour in Britain today, with a key focus on the role of private sector business recruitment practices. In line with Section 54 of the Act, businesses of more than £36m turnover are asked to produce a report on their efforts to combat slavery in their operations in the UK and abroad.
[Read this if you need to know whether your business should comply.]
As well as reporting on steps taken to ensure their entire supply chains (whether UK-based or international) are trafficking and slavery free, the scheme is also designed to prompt qualifying companies to carry out human rights due diligence and create internal policies on such issues.
Approaching the end of 2016, we have now seen published links to most of the hundreds of statements made to date. Conscious that this is the first phase of released reports, submitted one year after the duty was imposed (starting with businesses with year-ends from 31 March 2016 onwards), we’re keeping a balanced view on the overall response.
Thomas Player of Eversheds remarks: “The majority of the statements signal a cautious approach, with many businesses not yet identifying specific slavery and human trafficking risks, how those risks are managed and the effectiveness of steps taken, as suggested under the Act.”
In addition, some have noted that many published statements are showing evidence of identical wording. An excellent piece by Ergon Associates, having analysed 230 statements earlier this year, found that, “With some notable exceptions most statements do not go further than general commitments and broad indications of processes.”
It would seem that the majority of complying businesses have published a minimal (if not, token) response – briefly expressing the business’s opposition to labour exploitation and announcing an undefined commitment to addressing it.
Yet more critical, Shoosmiths law firm felt that, “Many organisations have struggled even to identify their first tier supply chain and a number of those who have succeeded have merely sent a letter to them seeking confirmation that the Modern Slavery Legislation is being complied with and 'tick the box', chasing up replies with a threat of terminating business relationships.”
Shoosmiths however also praised those organisations who had “embraced the spirit of the legislation” and by carrying out risk assessments and due diligence in efforts to veritably address real and potential supply chain risks. John Lewis is a prime example of an organisation that holds responsible recruitment central to its business operations. The retailer’s Human Rights and Modern Slavery Report, published in June, describes its philosophy and areas of focus alongside sharp detail on their relationships with suppliers, partners and collaborators. It’s the nitty gritty that may make for less consumer-friendly reading but unquestionably demonstrates the firm’s passionate efforts to protect salient human rights issues.
Taking inspiration from John Lewis and other firms that embraced the spirit of Section 54, we’ve narrowed down some top tips for excelling in next year’s Modern Slavery Report:
1. Adjust Existing Policies
A quick win approach and one that can set the tone for subsequent initiatives, is to draft or amend your Responsible Supply Chain (or similar) policy and ensure suppliers as well as internal staff read it.
2. Write your Responsible Business Strategy
The purpose of the strategy should be not only to show you are serious about operating ethically, but to perform due diligence and achieve responsible recruitment at all levels of the supply chain, which may first require tier mapping. Knowing exactly who is supplying your goods and services is a critical early step. Any strategy should be shared openly and clearly with the workforce – particularly those in a position of hiring and managing staff.
3. Assess the Risks
John Lewis identify salient risks as those which have “the most severe potential negative impacts on human rights.” You will know which those are for your business; once identified, explore the use of worker voice assessment tools – ours is targeted and affordable – to discover how your entire workforce is being treated, not just what managers say.
4. Lay the Foundations
Develop a reporting framework for such data gathering activity and create KPIs to monitor ongoing performance in these areas. Is each level of your supply chain workforce management accounted for? Also ensure that any employee witnessing or experiencing mistreatment has a route to whistleblowing or grievance reporting.
5. Training for Trust
Instead of point blank dismissing existing suppliers who don’t meet expectations, consider training to help them build capacity and achieve compliance with policies.
6. Go Beyond Sound Bites
Use helpful templates like this to draft a comprehensive, meaningful Modern Slavery Report next year that will positively connect with employees, stakeholders and customers.
The activities summarised in your Modern Slavery report together represent your business’s authentic commitment to eradicating slavery and trafficking.
In the process, those efforts will serve to bolster and protect brand reputation, whilst achieving higher staff engagement and lower turnover and absenteeism.
As we look to 2017 and ways to build on the first round of reporting, the Independent Anti-Slavery Commissioner Kevin Hyland OBE, suggests that additional pressure by consumers and investors will push organisations to do more and commits to “promoting the utilisation of effective models to allow for easy scrutiny and comparison of statements.”
While organisations may wish to avoid this spotlight, particularly where competitors haven’t disclosed, we see the reporting duty as an opportunity to be gain approval through efforts to clean up one’s operations. Customers are not naïve to scandals in their favourite brands’ supply chains; rather than jumping to boycott mode, what they are asking for is transparency over what is being done about it.
It remains to be seen whether Theresa May, as promised in her pre-election speech, will recommend that corporate Boards have employee representation. Careful not to imply a forcing of the matter, May said: “Some companies may find that these models work best for them – but there are other routes that use existing Board structures, complemented or supplemented by advisory councils or panels, to ensure all those with a stake in the company are properly represented. It will be a question of finding the model that works.”
This, along with Section 54 and numerous other anti-slavery initiatives in Britain, are the sign of a tide that shows no sign of retreating. The sooner businesses ask themselves how they can embrace their responsibility to human rights protection, and regard it as making business sense, the more highly they will be regarded in their industry.