Three Steps to Making Supply Chain Transparency Meaningful

It has now been over a year since the Modern Slavery Act came into effect, calling for any company earning more than £36m per year to produce a report outlining its commitment to eradicating human trafficking and slavery in their supply chain. 

There are several interesting points here. Firstly, the legislation doesn’t demand that UK companies comply with Section 54, insofar as there are no consequences for not submitting a statement. Neither are their penalties for stating that nothing is being done to banish modern slavery in their business.

Without doubt, we noticed a lacklustre response in the first round of statements last year. Barring a handful of standout brands such as John Lewis, ASOS and Vodafone, most ‘statements’ consisted of brief soundbites and vague assurances that the company is against modern slavery. 

It’s perhaps no wonder given that the majority of organisations under the category of £36m turnover and above have never before had to monitor their supply chains let alone accurately report on the risks within. The net has been cast much wider than the food and fashion brands typically scrutinised for their worker treatment in global supply chains.

So how can this new ethical spotlight be turned to everyone’s advantage? As Open Democracy puts it: “If the act is to be effective in changing corporate behaviour, statements must be scrutinised by civil society, investors, and consumers to reward leaders and expose laggards, identify areas of weakness across the board, and ultimately demand better action.“

Let’s remind ourselves that fully complying with the spirit of the Modern Slavery Act, by taking the actions above, can help improve an organisation’s bottom line. We are far beyond the time when doing business responsibly was a nice-to-have for an elite few; customers are demanding more from their brands, the ethical industry is now worth a record £38bn, and press scandals are an imminent risk for any brand bold enough to ignore their supply chain labour abuses.

We see three key opportunities to make transparency meaningful, prompted by Section 54 of the Modern Slavery Act:

  1. Statements (or lack of) should be made visible to everyone, such as in a central database, so brands cannot hide from this responsibility;
  2. Boards and senior managers keen to embrace supply chain transparency must ensure that this translates into concrete activity for on-the-ground workers around the world. A brand isn’t ethical if it only speaks of a commitment to eradicating slavery without concrete follow-through.
  3. Companies should tap into the ‘worker voice’ regardless of where in the world they are or however many levels of supplier tiers they are under. Corruption and falsification of audits are a fact of supply chain monitoring; it is no longer enough to take them at face value when the workers themselves have not been directly queried on their treatment, pay and working conditions.

Often businesses entering into the ‘ethical operations’ space for the first time aren’t fully aware of the options that are now available.

Responsible Trade Worldwide works with some of the most prominent UK brands to tap into the worker voice. Using cost-effective assessment technology and benchmarking data, we provide a current picture of the top down and bottom up images of an organisation so that discrepancies, risks and issues can be directly addressed. This is invaluable information that any organisation can use to demonstrate action against modern slavery and ultimately help their own organisation perform better with happier, more engaged workers.