While modern slavery and exploitation go against the ethos of most companies, they are still significant issues globally and also in the United Kingdom. The National Referral Mechanism (a government framework responsible for identifying victims of modern slavery) has seen an increase in referrals every year.
The Modern Slavery Act was introduced in 2015 to try and address this issue. The Act requires businesses of certain sizes to disclose what they are doing to prevent modern slavery within their supply chains.
How can you identify and manage modern slavery in your supply chains?
Who does the Modern Slavery Act apply to?
All businesses that supply goods and services in the UK and have an annual turnover of at least £36 million must produce an annual transparency statement. Although smaller businesses are not legally obliged to provide a transparency statement, the government encourages them to do so.
Smaller companies that supply goods and services to larger corporations are often asked to complete a transparency statement as part of their due diligence on engagement.
What is a transparency statement?
A transparency statement is a document that outlines what measures your company has taken to prevent modern slavery. The transparency statement should include:
- Details of the anti-slavery training that your staff have received
- The policies and preventative measures you have in place
- Details of modern slavery risk assessments
- Information about the organisational structure of your company and supply chains
How do you conduct a modern slavery risk assessment?
The risks of modern slavery can vary depending on the sector you are in. This is why conducting a thorough risk assessment as part of your prevention strategy is so important. A risk assessment can help you to define how modern slavery relates to your sector and which workers are most at risk in your supply chain. For example, if your company operates in the financial sector, you will need to be particularly aware of facilitating modern slavery via money laundering. Companies engaged in modern slavery often try to launder the associated proceeds through investments, using offshore accounts and converting proceeds to cryptocurrencies. It is vital to verify the identity of all clients as this makes it easier to identify potential victims of modern slavery.
More information on modern slavery in the financial sector can be found in the UK's Independent Anti-Slavery Commissioner, Dame Sara Thornton’s, published report on modern slavery in the financial sector.
How should you conduct due diligence on your supply chain?
Providing a transparency statement and performing risk assessments shows you are serious about identifying and managing modern slavery risks in your supply chain. However, it is also important to take some concrete steps. This starts with conducting due diligence on your entire supply chain.
For example, where are your suppliers sourcing their products, services and workers from? What are the human rights records like in those nations? You can obtain valuable information on this from humanitarian organisations like The Red Cross.
Furthermore, you can carry out your own audits. This involves visiting production sites in person and ensuring that working conditions are fair and that no corners are being cut in terms of pay, health and safety, and other workers’ rights.
Why cooperation is so important in addressing modern slavery
Tackling modern slavery requires a joint effort. Companies should cooperate and work together to implement standards that inspire real change. One thing you may want to consider is joining anti-slavery initiatives like Anti-Slavery International. This organisation ran the UK’s first campaign to end modern slavery and was largely responsible for the implementation of the Modern Slavery Act.
Joining anti-slavery initiatives shows that your company is serious about identifying and managing modern slavery. Your business can stay informed, protect its supply chain, and foster a safe and ethical work environment.
How 3CS can help
Our expert team of corporate and commercial solicitors are well-versed in anti-slavery laws. We can help ensure that your business remains fully compliant. Contact us today to arrange a consultation.
