CIPS survey finds businesses are failing to complete modern slavery statements
CIPS survey finds businesses are failing to complete modern slavery statements

Businesses are not doing enough on modern slavery reporting

18 October 2017

One third of businesses have failed to complete a modern slavery statement, despite being required by law to do so

From 31 March 2016, every business with a turnover of more than £36m and a footprint in the UK has been required to publish an annual transparency statement outlining actions taken to combat slavery in supply chains. This is a requirement of the Modern Slavery Act 2015, but there are no legal consequences for businesses that do not do so.

A survey of supply chain professionals undertaken by CIPS in August found that 34% of businesses required to publish a modern slavery statement have failed to do so. TISCreport, which collects statements, found only 50.6% had been filed by those that had a year to file statements (see p12).

The CIPS survey also found that 37% of supply chain professionals in businesses required to deliver a statement had not yet read the government guidance.

“The results of our survey are shocking,” said Cath Hill, CIPS director. “Legislation that was designed to be world leading has fallen at the first hurdle: compliance.”

UK businesses fared better than international firms operating in the UK, with 71% doing so compared with only 40% from internationally-based businesses, CIPS found.

Awareness of how to deal with modern slavery issues appears to have been raised by the Act, says CIPS. The proportion of UK supply managers who do not know how to handle slavery in their supply chain has fallen to 17% this year from 52% in 2015. And those UK companies that have mapped their suppliers to understand the risk and exposure to modern slavery has risen to 45% from 33%.

The discovery of slavery in supply chains has also increased since the Act, with 10% of UK supply chain managers reporting a discovery, up from 6% before the act was introduced.

“While awareness of modern slavery is becoming more widespread, we need to ensure that outrage turns into action,” said Hill. “Those working in the procurement and supply chain profession have told us that without stricter policies and harsher punishments for those who are not compliant with the Act, little will change.”

James Ewins, the barrister who helped to draft the modern slavery legislation, told SM: “Failure to file a statement renders a business liable to a sanction from the Home Secretary, although there are no examples of such yet. In reality, censure will come from the public at large, fuelled by academic or other independent analysis and assessments of a report’s contents.”

He expects some philanthropists to fund some test litigation against non-compliers to establish the duty to file.

The National Crime Agency says that increased law enforcement activity suggests there may be tens of thousands of slavery victims in the UK. In August, 300 policing operations were targeting slavery, and the NCA is running a campaign to highlight the signs of modern slavery and encourage reporting.

Businesses are required to complete a statement annually. Those with a financial year ending March should have filed their first report before March 2017. With the government recommending businesses complete six months before their financial year end, most organisations should have filed their first statement and be working on their second.

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