Even before the introduction of the Modern Slavery Act, procurement professionals would have been well advised to ensure they had no form of slavery in their supply chains.
But the Act introduces tougher penalties and requires organisations with a turnover of £36m or more to produce and publish an annual slavery and human trafficking statement. The UK law dictates that businesses with a financial year that ends 31 March 2016 must report on what they did in the previous financial year “as soon as reasonably practicable after the end of each financial year”.
CIPS says the statement must summarise the steps organisations have taken during the previous financial year to ensure slavery and human trafficking are absent from its business or supply chains regardless of whether any steps have been taken. If no steps have been taken, it should be made clear in your statement.
There is no template but CIPS recommends, based on the Act, that statements contain:
1. An outline of an organisation’s structure, business and supply chains.
2. Policies and due diligence in relation to slavery and human trafficking.
3. An identification of parts of its business and supply chains where there is a risk of slavery and human trafficking, and the steps it has taken to assess and manage that risk.
4. An assessment of its effectiveness in ensuring slavery and trafficking are not taking place in its business or supply chains measured against performance indicators it considers appropriate.
5. Information about training concerning slavery and human trafficking that’s available to staff.
CIPS adds that it is also important to establish and publish essential standards, codes of conduct and behaviour, saying: “While it is impractical for an organisation to audit and monitor each and every supplier in its entire supply chain at all levels, it should be possible to identify key vulnerabilities and take a risk-management approach to ethical procurement.”
Additionally, buyers should look to:
- Make declarations and contractual provisions to ensure existing and new suppliers understand the company’s approach to modern slavery in supply chains.
- Insert such a provision into new contracts.
- Encourage whistleblowing to identify breaches of policy and contractual provisions and make sure potential whistleblowers are protected.
- Bear in mind that the best way to determine if a company’s standards are being adhered to is by rigorous, independent auditing of key suppliers.
For further information and tools see The CIPS Ethical Procurement Guide and the guide to Tackling Modern Slavery in Supply Chains