Third of firms fail to comply with slavery law

6 September 2017

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

A survey of supply chain professionals found that 34% of businesses required to publish a modern slavery statement have failed to do so. However, there are no legal consequences for businesses that do not complete the statement.

The CIPS survey also found that 37% of supply chain professionals in businesses required to deliver a statement had not 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.”

From 31 March 2016, every business with a turnover of more than £36m and a footprint in the UK is required to publish an annual transparency statement.

UK businesses have 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 who have mapped their suppliers to understand the risk and exposure to modern slavery has risen to 45% from 33%.

More UK supply chain managers have found slavery in their supply chains since the act, up from 6% to 10%.

“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.”

The report follows a National Crime Agency report that, because of increased law enforcement activity, the number of slavery victims in the UK is likely to be much higher than previously estimated. In August, there were 300 policing operations targeting modern slavery, and the NCA is running a campaign to highlight the signs of modern slavery and encourage reporting.

The CIPS survey was completed in August by supply chain professionals. While there is no official deadline for the statement, businesses are required to complete one 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 were expected to have already filed their first statement and be working on their second.

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