Could standards help businesses comply with the Modern Slavery Act?
by Dr Akilah Jardine
5 Jun 2018
The Modern Slavery Act has brought businesses into the heart of the UK’s anti-slavery agenda but issues of poor implementation and enforcement of the regulation persist. Research Associate Dr Akilah Jardan debates whether new standards could help businesses comply with the Modern Slavery Act.
Slavery is illegal in every country in the world and recognised by the international community as a serious crime against humanity and a grave violation of human rights. Nevertheless, men, women and children continue to be trafficked, abused and exploited. No country is resistant to slavery as individuals can be exploited within and across borders, while goods and services supplied across the globe could be tainted with slave labour. As modern slavery is an international problem, it therefore requires a global response, involving the cooperation of all actors in the international community.
A number of regulations acknowledge that states have a duty to establish measures that combat modern slavery, human trafficking, forced labour, and related violations of human rights. In acknowledging modern slavery as “the great human rights issue of our time” , the UK government has pledged to lead the fight in its eradication. To illustrate its commitment, the government passed the Modern Slavery Act (MSA) in March 2015 to strengthen its efforts in preventing and prosecuting modern slavery offences and protecting victims of this heinous crime.
The transparency in supply chains clause requires businesses to report on the steps that they are taking to combat slavery in their operations. Image credit: wu lingyun / Getty Images.
A key provision in the MSA is the inclusion of a transparency in supply chains clause, which requires certain businesses to report on the steps that they are taking to combat slavery in their operations. The UK should be applauded for including its businesses in the fight against modern slavery. There is no doubt that such organisations have the global influence, resources and connections to collectively combat slavery. However, given the competitive nature of the business arena, the high demand for goods and services, and the abundance of vulnerable individuals, businesses are also at risk of being complicit in slavery and human trafficking - John Lewis and Habitat recently withdrew a range of granite worktops due to concerns that their supply chains were affected by slavery and child labour. Such abuses occurring in business operations illustrate the importance of including firms in agendas against slavery, and businesses have been widely encouraged to be transparent, disclosing information on their actions and operations.
Section 54 Transparency in Supply Chains Clause
Initially, the MSA did not include a transparency in supply chains provision, but pressure from various bodies led to the inclusion of section 54. Section 54 requires that businesses with an annual turnover of £36 million or more, providing goods and services in the UK, produce an annual statement on the steps that they have taken to combat slavery in their supply chains and operations. Companies that have taken no steps to combat modern slavery are nevertheless legally required to provide a statement stating that they have not done so. To legally comply with the MSA, the slavery and human trafficking statement must be approved by the board of directors or equivalent, signed by the director, and made publicly available on the homepage of the company’s website.
There is no legal requirement under the Act as to what businesses must include in their statement. However, the legislation has suggested six areas that a company may report on: the structure and organisation of its business and supply chains, its modern slavery and human trafficking policies, due diligence processes to prevent slavery and human trafficking, assessment and management of operations and supply chains at risk of slavery, information on how the business will measure the effectiveness of its measures and policies in relation to slavery, and the training available to employees.
Slavery and human trafficking statements play a vital role in the regulation of slavery by allowing the operations of firms to be transparent, drawing attention to areas where exploitation and abuses are likely to occur, and placing businesses’ response to be subject under scrutiny by investors, consumers and civil society. Such transparency can place added pressure on businesses to be more accountable and proactive in the fight against slavery.
To what extent are businesses complying with section 54 of the Modern Slavery Act?
It has been two years since companies have been required to produce a statement. Since section 54 came into force in October 2015, there has been an increase in the number of slavery and human trafficking statements, illustrating that more firms are engaging with the anti-slavery agenda. But to what extent are businesses actually complying with the legislation? There have been some examples of good practice. For example, the Co-operative Group’s statement provides a detailed outline on the steps the company is taking to prevent slavery and human trafficking, how they manage and respond to the risk of modern slavery, and information on how they measure their performance against targets set. Their policies also include training available to suppliers and employees, and campaign and awareness raising actions. In April 2017, the Co-op also established the Bright Future programme, which offers survivors of modern slavery paid work placement in their food business.
While the Co-op’s slavery and human trafficking statement, and the actions they are taking to combat slavery, exemplifies good practice, many companies that are required to produce a statement, have not done so, while the quality of others continues to be poor. For example, research by CORE Coalition has shown that just under 6,000 of the estimated 11,000 companies required to comply with section 54 have published statements. Further, only 19% actually meet the minimum requirements of the Act. Moreover, many statements continue to be very broad, with no substantial insights on the actions they are taking to combat slavery. Though the government’s ‘Transparency in Supply Chain Guidance’, “expects organisations to build on their statements year on year” and for “the statements to evolve and improve over time,” I believe that much more must to be done to support businesses’ compliance.
People protest against labor trafficking and modern day slavery outside the United Nations. Image credit: Andrew Burton / Getty Images.
What role might a standard play in supporting businesses' compliance with the Modern Slavery Act?
Recently, on behalf of the University of Nottingham’s Rights Lab, I was invited by Baroness Young of Hornsey and the British Standards Institution (BSI) to the House of Lords to take part in a discussion on MSA’s transparency in supply chain clause and the role a standard might play in supporting businesses’ compliance with the Act. Standards are agreed best practices created by experts that can help companies of different sizes assess their impact and manage risks. There is already a wide pool of existing standards and initiatives that aim to support businesses in being transparent and accountable in their operations. For example, key reporting standards and guidelines include the Global Reporting Initiative (GRI) Sustainability Reporting Standards, the United Nations Global Compact Communication on Progress, and the United Nations Guiding Principles on Business and Human Rights. If BSI is to establish a standard to support businesses’ compliance with MSA, it is clear that it must add value to existing initiatives. Consideration needs to also be given to the type or purpose of the standard. For instance, will it aim to harmonise existing policies and schemes, or address the quality of slavery statements? Or will it take the form of a code of practice guiding businesses on the steps they need to take to prevent slavery, or adopt a management system approach driving organisational behaviour to compliance? Whatever role it plays, the standard cannot adopt a one-size-fits-all approach, and ought to acknowledge the complexity and differences in business operations and supply chains.
While a standard could compliment the present legislation, as business engagement could potentially encourage and demonstrate compliance with MSA, it nonetheless, cannot fill the gap in poor enforcement. Though MSA has brought businesses into the heart of the UK’s anti-slavery agenda, there continues to exist the issue of poor implementation and enforcement of the regulation, as many businesses required to produce a statement continue to not do so. Moreover, the lack of legal requirements under the Act on the content of the statement has contributed to widespread inconsistency among business compliance and their statements. If a standard is to be established, it is evident that it must add value to the existing policies on transparency in supply chains and should be horizontal and fluid in its application to allow different businesses and their organisational practices in relation to slavery and human trafficking, to continuously evolve and improve.
Dr Akilah Jardine is a Research Associate in the Rights Lab at the University of Nottingham, which is the world’s first large-scale research network for ending contemporary slavery. She works alongside Dr. Alexander Trautrims, project lead of The Unchained Supply – a large multidisciplinary research project on slavery in supply chains, supported by the British Academy’s programme on Tackling Slavery, Human Trafficking and Child Labour in Modern Business.