U.K.-based civil society organisations have published a guide for companies reporting under the Transparency in Supply Chains clause in the UK Modern Slavery Act 2015, which was signed into law in March 2015. The guide is called “Beyond compliance: effective reporting under the Modern Slavery Act. A civil society guide for commercial organisations on the transparency in supply chains clause.”
Beyond Compliance, published in March this year, gives companies guidance on how to respond to the new provision by embedding due diligence procedures on eradicating human trafficking, forced labour, and slavery from their supply chains into reports. Thus the guide is not simply about what to include in the report, but how to make sure the report discloses how the company has avoided modern slavery in its supply chain. Modern slavery is defined as, among other slavery-like practices, forced labour, debt bondage, serfdom, trafficking, forced marriage, and child slavery.
The guide was put together by CORE, along with a U.K.-based coalition on corporate accountability, including Amnesty International UK, Anti-Slavery International, Catholic Agency For Overseas Development (CAFOD), Focus on Labour Exploitation (FLEX), Know the Chain, Quakers in Britain, ShareAction, Traidcraft, and UNICEF UK.
Although reports published under the Transparency in Supply Chains Clause are important, as with most other disclosure issues, the more important outcome will be whether the practices described in the report result in an end to business practices that expose companies and their supply chains to the risks of slavery and forced labour.
In her foreword to the Home Office guide to reporting under the clause, released last October, Home Secretary Theresa May said: “It is simply not acceptable for any organisation to say, in the twenty-first century, that they did not know. It is not acceptable for organisations to ignore the issue because it is difficult or complex. And, it is certainly not acceptable for organisations to put profit above the welfare and wellbeing of its employees and those working on its behalf.”
The benefits to a company of eradicating modern slavery from its supply chains—apart from the obvious ethical one—include improved relations with investors, business partners, and customers; improved employee engagement, recruitment, retention, and motivation; and, finally, stronger and more sustainable business relationships that won’t or can’t be disrupted by unethical labour practices.
Best Practices to Monitor Human Rights Violations
Specific measures to prevent or address modern slavery should be included in all relevant policies as follows:
Migrant labour policies
Child labour policy
Child protection policy
Supplier code of conduct
Employee code of conduct
Policies concerning access to remedy, compensation and justice for victims of modern
Staff training/awareness-raising policies
Source: Beyond Compliance
As well as understanding the risks involved in modern slavery, the guide calls for comprehensive policies [see Best Practices box below] to be written that cover the process for making business decisions, whistleblowing, reporting grievances, and drawing up contracts with internal and external suppliers, and for human rights due diligence to be conducted both internally and externally. Human rights due diligence involves: “assessing actual and potential human rights impacts; integrating and acting on the findings; tracking responses; and communicating about how impacts are addressed.” Companies should also communicate all of this clearly and effectively both in the Act-required report and elsewhere. In fact, the guide recommends that policies be made available in multiple languages if necessary, and “understandable for low-skilled and illiterate workers.” They should also be signed by the CEO. In addition to enforcing these policies within the company, business partners and “other parties directly linked to the business’s operations, products, or services” should also be informed of their need to implement policies at least up to these standards and informed what the consequences will be if there are any lapses.
Implementing these policies will allow senior managers to fulfill their responsibilities under the UN Guiding Principles on Business and Human Rights. This is the global standard on corporate responsibility that the U.K. government has committed to implementing in its National Action Plan on Business and Human Rights.
Supply chains in countries with weak labour protections are the area most at risk for modern slavery, so company sourcing or supply chain management teams should be where efforts to address modern slavery, through the collection of data about the supply chain, are focused. Companies must know who is involved in the chain as well as working conditions at all stages of the chain. Looking at best practices elsewhere and drawing conclusions from them, the guide gives recommendations on how to avoid risks, such as renewing contracts with trusted suppliers which have already demonstrated their provision of a decent wage and working conditions, as well as going beyond simple audits by conducting confidential interviews, or providing avenues for anonymous reporting at supplier companies. In addition, building relationships with workers’ organisations and with other companies in the same industry all contribute to the prevention of modern slavery.
The guide provides a great deal of granular detail for each of these issues, but at a minimum the report should contain:
The organisation’s structure, its business, and its supply chains
The organisation’s policies in relation to slavery and human trafficking
Its due diligence processes in relation to slavery and human trafficking in its business and supply chains
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
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
The guide also discusses how and where companies should report where they have discovered slavery in their supply chains. Concealing such a discovery would, of course, require a director to sign off on a fraudulent declaration.
Reports must be issued annually, but it is not recommended that the same report be put out each year as the act requires continuous improvement, and it is unlikely