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The Modern Slavery Act

November 1, 2015

 

This is a personal take on the Acts potential impact to business in the UK but we need to understand the basic requirements of the ACT so first of all, let me kick off with some facts:

 

Fact 1

The new Modern Slavery Act (2015) will apply to all commercial organisations that carry on business or part of a business in the UK.

Fact 2

From October 2015, all companies doing business in the UK with a turnover of £36m or more will have to deliver an annual slavery and human trafficking statement.

If they have taken no steps to combat slavery, then this must also be disclosed.

Let’s look at the official jargon and part of the relevant section:

PART 6 TRANSPARENCY IN SUPPLY CHAINS ETC 54 Transparency in supply chains etc.

  1. A commercial organisation within subsection must prepare a slavery and human trafficking statement for each financial year of the organisation.

  2. A commercial organisation is within this subsection if it:

    1. supplies goods or services, and

    2. has a total turnover of not less than an amount prescribed by regulations made by the Secretary of State.

  3. For the purposes of subsection, an organisation’s total turnover is to be determined in accordance with regulations made by the Secretary of State.

  4. A slavery and human trafficking statement for a financial year is:

    1. a statement of the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place—

      1. in any of its supply chains, and

      2. in any part of its own business, or

    2. a statement that the organisation has taken no such steps.

There is a lot more to Part 6 of the Act and if your company falls within the category and I am sure you already do, please read it.

http://www.legislation.gov.uk/ukpga/2015/30/contents

As I read it, companies falling into this category do not have to make a statement but if they do, this is what they need to include. If they do not…..

Penalties? Apparently not.

However, action to ensure that any company who falls within the coverage of the Act is adequately protected is not optional and the £36m turnover start point means that more than 12000 companies in the UK will come under that requirement.

So what is modern Slavery?

The Walk Free Foundation defines it as:

“The term modern slavery is used to denote human trafficking, forced labour and slavery-like practices such as debt bondage, and the sale or exploitation of children. All of these crimes have a common feature – they involve one person depriving another person of their liberty in order to exploit them for personal or commercial gain.”

The scale of the problem

In December 2014, the government of the day estimated there were between 10-12,000 people in the UK who would be categorised as “Potential Victims of Slavery” that number is considered by some, to be much higher. As mentioned Modern Slavery can take many forms including the trafficking of people, forced labour, servitude and slavery. In the UK, Recent statistics show that 27% of reported potential victims claimed to have experienced labour exploitation and according to the Global Slavery Index, “an estimated 30 million people in the world today live in some form of modern slavery.”

What companies are most at risk?

The Chartered Institute of Procurement & Supply (CIPS) consider the risks are more pronounced where:

  • workers have fewer protections through inadequate laws and regulations, weak or non-existent enforcement, and poor business and government accountability

  • there are high levels of poverty among workers

  • there is widespread discrimination against certain types of workers (e.g. women and ethnic groups)

  • there is widespread use of migrant workers, or

  • in conflict zones

  • in some specific high risk industries (typically industries involving raw materials).

There is more information on this here:

https://www.cips.org/Documents/About%20CIPS/Ethics/CIPS_ModernSlavery_Broch_WEB.pdf

I believe that the risks are not confined to the supply chain, they also apply to those companies that sub-contract or have short term/one-off labour requirements supplied by a third party. The risk covers a wide range of market sectors.

What should the Statement contain?

The Act covers why a company should make a statement, where and how it should be publicised and perhaps the outline of what it should cover. What are not covered are the detail and perhaps importantly the process of how you make adequate provision to monitor and police it.

Where do I start?

We have an 10 point plan

  1. Set effective standards (code of conduct?)

  2. Communicate that standard

  3. Assessment of the risk

  4. Establish audit procedures

  5. Engage the suppliers

  6. Establish a communication Strategy

  7. Establish a staff training programme

  8. Implement the procedure

  9. Take corrective actions, where applicable

  10. Have a toolbox (risk assessment will highlight the “known” risks, the engagement may highlight previously “unknown” risks, the tools will be the processes for corrective action)

IMS are current working with a number of clients to support the process of identifying the requirements not only to produce the statement but a process to aid implementation.

Should you require any advice or support, please contact us on:

0117 325 0612, or email us at info@imsplc.com

 

 

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