Modern Slavery Act: many global businesses still unprepared for new law

The UK Modern Slavery Act, which became law in March, has been heralded by Unicef as an historic moment.

For the first time in Europe we have legislation that directly addresses those who traffic and use bonded labour, with a maximum sentence of life imprisonment for the most serious offenders.

It's a set of powers that is urgently needed; there are an estimated 13,000 victims of modern slavery in the UK alone, a figure which has risen by 500 per cent in the past 12 months.

If 13,000 is a stark number, then consider the 30 million plus in slavery worldwide – who are often only two or three tiers down the international supply chains of UK businesses. The terms of the new legislation require large businesses to demonstrate transparency, evidencing steps taken to ensure slavery and human trafficking is not present in their supply chains.

So, how ready are they?

Research conducted by NQC with more than 250 global organisations and their supply chains suggests that fewer than 5 per cent have a policy on slavery or a code of conduct which vendors must follow. Nearly 50 per cent have equivalent policies for non-discrimination, demonstrating perhaps that slavery has been a hidden risk for many UK businesses to date. There are, though, signs of change.

While a relatively small number of organisations profess to having written guidance on supply chain conduct, many more actively monitor supplier behaviour with regards to forced and child labour – around 25 per cent of big businesses do this in the UK. Having this visibility is just as important as creating the formal policy to govern it.

Without accessible and accurate information, engaging those organisations on compliance and sustainable improvement becomes much more difficult. So it's no coincidence that as businesses are being asked to extend their scope of influence, increasing numbers are using supply chain mapping and intelligence tools to drive their strategy.

More organisations are monitoring suppliers' behaviour because of a mixture of increasing awareness (across industries and consumers) and the negative business impact that modern slavery can have when a scandal strikes. Legislation, we know, leads to compliance but it's a greater mix of awareness and imperative which is required to achieve continuous performance improvement in global supply chains.

On the operational realities of uncovering slavery in the supply chain, collaboration is needed. Common approaches to collecting data can drive the required cultural change. Karen Bradley, minister for modern slavery and organised crime, recently called on UK technology and business leaders to do just that. Indeed, demonstrating leadership on such a fundamental social issue needs to become part of everyday life for procurement and supply chain professionals.

When we look at the extent to which stakeholders influence labour standards policy; shareholders, employees and government guidance are the most commonly cited. Only around 50 per cent of businesses draw on clients' and suppliers' input. Yet this is the landscape which will determine much of the speed and scale of change in rooting out modern slavery.

It may be that in the near future, following government consultation on supply chain transparency, 100 per cent of big businesses will be required to implement formal slavery policies. The real tipping point, however, will be arrived at through the shared will and the shared knowledge of buyers and suppliers around the globe.

Clare Fallon is policy and research officer at NQC

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