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A law designed to cut slave labour from the supply chains of companies operating in the UK is about to come into force, but the detail of its requirements remains unclear
Almost two centuries after the UK formally abolished slavery, the scourge of forced, bonded and trafficked labour continues. Between 21 million and 29 million people worldwide are thought to be trapped in involuntary employment, according to estimates by anti-slavery groups. The international Labour Organisation says modern slavery generates illegal profits of $150billion a year.
Although human trafficking and enslavement is evidently big business, it’s very rare to find large companies in regulated markets employing slave labour directly. Yet the risk that one of their suppliers or (more probably) sub-suppliers may be doing so is high.
For that reason, the UK government is requesting companies to take steps under the Modern Slavery Act to ensure that slave labour is not used in their supply chains. The legislation was passed in March and will come into force in October.
So are companies ready? Campaigners fear not. That’s partly because of a simple lack of awareness. Legislators decided to set the threshold for the Act’s applicability at the lower end of the proposed spectrum. Consequently, every company with annual revenues of £36m or more that is based in the UK or has UK operations has to comply – a pool of some 12,000 businesses.
A more significant problem is confusion. Marilyn Croser, director of the Core Coalition, a civil society network active in pushing for the Act, says: “Those companies who engaged in the process of legislation know it's coming, but even for them there’s a lack of clarity as to what’s expected.”
The main obligation is for companies to issue a “slavery and human trafficking statement” (see box). This needs to be produced on an annual basis and should demonstrate the steps taken to ensure a company’s operations are slave-free. If they are taking no measures, companies are required to say as much. Beyond that, however, the specifics of what the statement should include remain vague.
Box: What information should a Slavery and Human Trafficking Statement include?
a) the organisation’s structure, its business and its supply chains;
b) its policies in relation to slavery and human trafficking;
c) its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
d) the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
e) its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate;
f) training about slavery and human trafficking available to its staff.
Source: UK government
The Home Office is understood to be preparing official guidance to orientate companies more fully. The document is due to be published next month, around the time that the Act comes into force. It is essential that the guidance provides clarity on the “actions and reporting of those actions” that companies need to undertake to be compliant, says Croser.
Philippa Foster Back, director of the Institute of Business Ethics (IBE), anticipates “a lot of fumbling around” initially when it comes to meeting reporting requirements. A key issue of contention is how far down the supply chain companies’ anti-slavery measures are supposed to reach. Another is the rigour of assurance that companies are being asked to provide. Is it best endeavours to eliminate slavery or absolute proof that there is none, Foster Back asks.
“Companies are probably only going to be able to manage their primary suppliers at the moment and they will probably put in some form of cascade-type effect all the way down [their supply chain]”, she says.
Regardless of the letter of the law, compelling business risk and moral arguments exist to push companies to act. As a minimum, businesses ought to have a human rights policy that requires suppliers not to support slavery or forced labour. A recent briefing issued by the IBE cites Vodafone’s Code of Ethical Purchasing and Canon’s Supplier Code of Conduct as illustrative examples [PDF]. Additional steps companies may consider include rigorous site auditing, supplier training and wider support for union representation and worker rights in supply chains.
Human rights groups such as those represented by the Core Coalition would like to see companies go further and eliminate business practices that they say exacerbate the risk of forced or slave labour taking place. The list includes short order times by retailers and unfair payment terms that leave suppliers facing cash flow problems.
Campaign groups working closely on the promotion of the Modern Slavery Act include Unseen, Anti-Slavery International, Cafod, Amnesty International and Flex. The latter is pushing for companies having directors who are directly accountable for reporting. Anti-Slavery International, meanwhile, believes the UK government should be empowered to block the import of any goods produced with the use of forced labour.slavery modern slavery act human trafficking UK Government