© Supply Management
© Supply Management

Small firms ignorant of Modern Slavery Act

Almost two thirds of small businesses are unaware of the Modern Slavery Act, according to a survey.

Almost two thirds of small businesses are unaware of the Modern Slavery Act, according to a survey.
A poll of SMEs by CIPS revealed that although the act means they will face greater scrutiny on slave and child labour from larger businesses they supply, 61% did not know about the act or its impact on them.
According to CIPS, 67% of SMEs questioned in the survey said they had never taken any steps to tackle the issue of slave labour. Three quarters said they would not know what to do if modern slavery was found in their supply chains.
CIPS is calling for SMEs to put measures in place to ensure their operations and supply chains are slavery-free.
The UK Modern Slavery Act aims to prevent forced and child labour by making larger businesses more accountable for the practices of their suppliers. From 1st  April this year, the act will require businesses with a turnover of £36m or more to make an annual statement setting out what they have done to tackle any slave and child labour in their supply chains. The rules are meant to have a cascading effect on smaller businesses, to make their supply chains slavery free also, CIPS said.
However, SMEs with a turnover below the £36m threshold are “shockingly unaware” of the effect the legislation will have on them and are not prepared to deal with any slave labour issues that may occur.
The research polled 263 UK businesses with turnovers under £36 million. Although more than eight in ten said they have not discovered slave labour in their supply chains, CIPS said this appeared to be mostly down to ignorance, as very few businesses were actively looking for slavery in their supply chains. 
Just under a third of businesses, 67%, have never taken measures to keep their supply chains free of slavery, and 75% said they would not know what to do if they discovered slavery in their supply chain. 
One in ten SMEs survey have ensured all their UK workers are in receipt of the minimum wage and robust immigration checks are in place. Only 5% of businesses have mapped their supply chains, and 4% have provided training to staff or suppliers on how to spot the signs of slavery.
David Noble, group CEO of CIPS, said that although the legal duty to tackle slavery in supply chains was on larger corporations, smaller businesses had a duty to ensure their supply chains were slavery-free.
“Ultimately, modern slavery is not an issue confined to the supply chains of large multinational corporations,” he said. “On the contrary, SMEs can often have long and complicated supply chains themselves. They are just as likely to find enslavement in their operations, right here in the UK, as recent cases show. 
“To truly eliminate this evil from UK procurement, supply chains need to be mapped and simple measures put in place. Partnerships between larger corporations and smaller SMEs will be instrumental in driving out malpractice in the supply chain. The legal duty in the Act must not override the moral obligation of us all to make sure our supply chains are slavery-free.” 
CIPS acknowledged that smaller businesses might not have the same resources as larger companies to tackle potential problems, but said that there were simple steps they could take to protect their business. These included:
- Ensuring all UK workers are in receipt of the minimum wage and robust immigration checks are in place.
- Mapping supply chains to understand where there the highest risk of slaver is.
Undertaking site inspections
Providing training to workers and local suppliers on modern slavery risks and compliance.
- Reviewing supplier contracts, and including obligations to comply with the UK Modern Slavery Act.
- Publishing a statement outlining the steps being taken to tackle modern slavery.
CIPS has produced a toolkit on tackling modern slavery.

A poll of 263 SMEs in the UK by CIPS revealed although the Act means they will face greater scrutiny on slave and child labour from larger businesses they supply, 61% did not know about the act or its potential impact on them.

According to CIPS, 67% of SMEs questioned in the survey said they had never taken any steps to tackle the issue of slave labour. And three quarters said they would not know what to do if modern slavery was found in their supply chains.

CIPS is calling for SMEs to put measures in place to ensure their operations and supply chains are slavery-free.

The UK Modern Slavery Act aims to prevent forced and child labour by making larger businesses more accountable for the practices of their suppliers. From 1 April, the Act will require businesses with a turnover of £36m or more to make an annual statement setting out what they have done to tackle any slave and child labour in their supply chains. The rules are meant to have a cascading effect on smaller businesses, to make their supply chains slavery free also, CIPS said.

But SMEs with a turnover below the £36m threshold are “shockingly unaware” of the effect the legislation will have on them and are not prepared to deal with any slave labour issues that may occur.

The research polled 263 UK businesses with turnovers under £36 million. Although more than eight in 10 said they have not discovered slave labour in their supply chains, CIPS said this appeared to be mostly down to ignorance, as very few businesses were actively looking for slavery in their supply chains. 

Just one in 10 SMEs surveyed have ensured all their UK workers are in receipt of the minimum wage and robust immigration checks are in place. Only 5% of businesses have mapped their supply chains, and 4% have provided training to staff or suppliers on how to spot the signs of slavery.

David Noble, group CEO, CIPS, said although the legal duty to tackle slavery in supply chains was on larger corporations, smaller businesses had a duty to ensure their supply chains were slavery-free.

“Ultimately, modern slavery is not an issue confined to the supply chains of large multinational corporations,” he said. “On the contrary, SMEs can often have long and complicated supply chains themselves. They are just as likely to find enslavement in their operations, right here in the UK, as recent cases show. 

“To truly eliminate this evil from UK procurement, supply chains need to be mapped and simple measures put in place. Partnerships between larger corporations and smaller SMEs will be instrumental in driving out malpractice in the supply chain. The legal duty in the Act must not override the moral obligation of us all to make sure our supply chains are slavery-free.” 

CIPS acknowledged smaller businesses might not have the same resources as larger companies to tackle potential problems, but said that there were simple steps they could take to protect their business. These included:

  • Ensuring all UK workers are in receipt of the minimum wage and robust immigration checks are in place.
  • Mapping supply chains to understand where there the highest risk of slavery is.
  • Undertaking site inspections
  • Providing training to workers and local suppliers on modern slavery risks and compliance.
  • Reviewing supplier contracts, and including obligations to comply with the UK Modern Slavery Act.
  • Publishing a statement outlining the steps being taken to tackle modern slavery.

CIPS has produced a toolkit on tackling modern slavery.

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