It is five years since the introduction of the Modern Slavery Act in the UK but the Global Slavery Index still estimates that 45.8 million people across 167 countries are working in conditions defined as Modern Slavery. Whilst the Act is certainly improving things, businesses need to ensure this is a key supply chain risk, managed at board level. Not only as a business risk but as a point of corporate responsibility and fiduciary duty.
Just last year the analysis of FTSE100 company statements under the UK Modern Slavery Act by the Business and Human Rights Resource Centre (BHRRC) highlighted that:·
the highest performing companies (M&S and SABMiller) provided details on their risks, detail instances of modern slavery and explain how these have been addressed;
most companies provide very little information on the structure and complexity of their supply chains;
even less information is available on specific risks (type/sector/location) in the supply chain;
efforts to measure the company's effectiveness in ensuring that slavery and human trafficking is not taking place in business or supply chains was the lowest-scoring category. 56% of companies provided no meaningful information on how they measure their effectiveness at combatting slavery and only 7% reported developing KPIs.
The Act was designed to combat modern slavery in the UK and consolidates previous offences relating to trafficking and slavery.
The Transparency in Supply Chains clause of the UK Modern Slavery Act has begun to move modern slavery up the agenda of companies both in the UK and across the world. Yet still today we are seeing examples of large organisations who are not identifying and addressing this risk in their supply chain. Earlier this year, the rapidly expanding online retailer Boohoo.com attracted significantly adverse press coverage relating to the discovery of a factory in Leicester in their supply chain allegedly paying workers less than half the national living wage and as little as £3.50 per hour. In addition, working conditions were questionable with the factory continuing to operate during the national COVID lockdown allegedly with no provisions in place to protect workers health.
In a fast-paced modern business with a large and complex supply chain, identifying, assessing and addressing Modern Slavery risk is certainly challenging. Businesses must look at automation and more efficient ways to tackle the problem. It simply isn’t acceptable for a business to not do all that they can to eradicate this problem whilst they enjoy high revenue growth and profitability - lack of personnel to do this cannot be an excuse. Margins are increasingly squeezed in retail as the competitive landscape toughens but this doesn’t excuse the fact that major businesses are still not addressing this issue and risk in their supply chains.
The problem needs tackling in a number of ways but in particular by retailers putting in every effort required to assess their supply chain for Modern Slavery practices and by consumers voting with their feet by refusing to buy goods from businesses that are found wanting on this topic.
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