Most organisations still falling short of requirements. The (UK) government is determined to toughen its approach to modern slavery following a review of the 2015 Modern Slavery Act, according to Alexandros Paraskevas a professor of strategic risk management at the University of West London. Speaking to Airmic News shortly before the results of the review are due to published, he said businesses “should expect stricter regulation, with sanctions for non-compliance and greater obligations on businesses to mitigate the risks.”
Most businesses are still failing on their duties to tackle modern slavery, he added, and such is the level of non-compliance with the law that the Home Office has written to the CEOs of more than 17,000 organisations, requiring them to publish up-to-date modern slavery statements or face the risk of publicly being “named and shamed” as non-compliant.
The Modern Slavery Act
The Modern Slavery Act requires that organisations publish an annual modern slavery statement that describes the measures and actions, if any, they have taken to address modern slavery within their operations and supply chains. These statements must also be signed by a director, approved by the board and be easily accessible on the company’s website. However, the law has no sanctions available to it. “The government has been relying on companies to do the right thing rather than fining them, but this light touch approach may change; the review might suggest more is needed,” Professor Paraskevas said. Moreover, companies will probably be required to set out what steps they intend to take going forward, and not just those it took in the past year, as well as refer to their statement in their annual reports.
Include the public sector
The scope of the law may also be widened to include the public sector. “One of the recommendations expected is that public authorities will have to exclude from procurement processes those suppliers who have not published a statement when they ought to have. This is estimated to be about 40% of the top 100 public procurement contractors. “We also expect the revised law to expressly include public authorities within the scope of reporting obligations.” He acknowledged that although standards still fall short, the law has had some positive results. “Until the Act was introduced, no one talked about this. No one admitted that it was happening or that it was a problem or a risk on the horizon.”
Construction, hospitality and agriculture are particularly vulnerable sectors, due to a heavy reliance on subcontractors, seasonal workers and immigrants. As well as the strong moral imperative, risk managers should approach this as a complex risk, he noted. It entails many other types of risk, including operational (if the business has to halt some operations), legal (due to the possibility of litigation), financial risk (loss of revenue) and reputational risk.
The Co-op is an example of a business which has taken an “exemplary” approach to tackling modern slavery, going “beyond the letter of the law,” Professor Paraskevas explained. For example, they have procedures in place to prevent and remedy exploitation, such as training suppliers, implementing policies throughout the supply chain and running audits on suppliers’ compliance. Their Bright Futures initiative provides the opportunity of a paid work placement and a job in its food business for modern slavery survivors.
According to Professor Paraskevas, modern slavery has been dismissed by some organisations as a supply chain issue, thereby enabling those at the top of the chain to pass the responsibility upstream. “The bigger players should be held accountable in the end,” he observed. “They are the ones with the resources to ensure that their supply chains are slavery-free.”