Only 30 out of 540 supply chain transparency reports submitted to a central registry were compliant with the Modern Slavery Act.
Under the Modern Slavery Act 2015 every company with a turnover more than £36m and a footprint in the UK has to produce an annual statement outlining what it is doing to identify and address modern slavery in its supply chains.
The Business and Human Rights Resource Centre has established a central repository where companies can upload their statements. The Resource Centre said it already has more than 540 statements and was expecting the number to increase as the first publication deadline approaches.
Since 31 March 2016 businesses have six months after their year-end to publish their transparency statement. The earliest deadline therefor will be 30 September.
Three of the most basic criteria a report needs to be compliant are approval from the company’s board of directors or equivalent, a signature from a director or equivalent, and for the report to be posted on the home page of the company’s website.
However, in an analysis of 540 submitted reports, the Resource Centre found:
- 160 (29.6%) explicitly stated they had board approval or equivalent
- 264 (48.9%) had been signed by a director or equivalent
- 269 (49.8%) had links to their reports on the homepage of their websites
- In total, only 30 reports (5.6%) had all three, making them fully compliant
The Resource Centre was also concerned companies were failing to grasp the spirit of the law.
“While compliance is easy to measure and an indicator of the quality of statements, we are really looking for due diligence from companies,” said a spokesman for the Resource Centre. To do this, a company needes to demonstrate it has identifed and taken meaningful action to mitigate risks. “In that sense many statements might comply technically with the act but they don’t represent a good statement in line with the spirit of the act”.
The Resource Centre did find evidence of good practice, and said “a handful of statements” demonstrated engagement with suppliers to create modern slavery risk profiles and the building of capacity to prevent risk.
The Resource Centre’s central registry will allow for comparisons and benchmarking of companies, and hopes to encourage a “race to the top” to tackle modern slavery.
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