How buying practices could be increasing supply chain slavery risk

14 February 2023

Public sector procurement professionals are being warned supply chain decisions could increase modern slavery risks.

In guidance released alongside a Procurement Policy Note, the UK government said short lead times, late payments, demand for high flexibility – including last minute order changes, and downward cost pressures could increase strain on suppliers.

“You should consider the impact of your decisions on the supply chain as these may contribute to increasing modern slavery risks,” said the report.

The report said buyers should work with suppliers to mitigate risks and encourage them to be proactive and open.

“Taking immediate action to terminate a contract can have a drastic effect and risks causing further harm to those involved,” said the guidance.

“Even if a supplier is suspected of being complicit in the crime, the priority should be to work closely with the supplier to help the victims, and ensure it does not happen again. Reactive contract termination can lead to fear and concealment by suppliers, which in turn puts victims at greater risk.”

The guidance follows ongoing controversy surrounding the government’s approach to modern slavery, after the government role of the independent anti-slavery commissioner has been left unfilled since April, despite being a legal requirement. 

The former commissioner, Dame Sara Thornton, told the House of Commons Select Committees’ podcast, Committee Corridor, last week that she believed the UK is lagging behind international efforts to tackle slavery abuses. 

She said the government had changed direction, adding: “The emphasis appears now to be on immigration and small boats, rather than… trying to catch up a little bit with the rest of the world on legislation about business and human rights.” 

The government’s recommendations for identifying and tackling modern slavery: 

1. Understand risk

There are a number of core characteristics that place workers at heightened risk of being exploited. Different industries pose different risks, and those considered most at risk include agriculture, manufacturing and garment production. 

Certain regions are more at risk of modern slavery than others, and the government recommends using the US list of Goods Produced by Child Labor or Forced Labour and the The Global Slavery Index to help understand the geographic risk associated with suppliers.

The government further noted: “The larger and more complex the supply chain, the harder it is for organisations to know about conditions for workers in their supply chains.”

2. Identify risk in new contracts

Firms must balance modern slavery requirements and ensure they don’t place “unnecessary burdens” that could “deter a wide diversity of suppliers”, including SMEs and voluntary, community and social enterprises as well as suppliers owned by under-represented groups from competing for public contracts.

A robust approach to pre-procurement activity will ensure that modern slavery risks are appropriately identified and mitigated at the earliest stage, and early engagement encourages can provide valuable information by testing and piloting approaches, routes to market, and bid evaluation criteria, including social value considerations.

3. Manage risk in existing contracts

“You should take a risk-based approach, and focus your efforts on those areas where it will have the greatest impact. Working in collaboration with suppliers even when they are mid-contract is key, and at all times remembering the risk of insufficient or ineffective action is not reputational, it is human, i.e. the victims of modern slavery,” the government said. 

Managing risk ultimately requires collaboration with suppliers. “You should encourage your suppliers to be proactive and open, and report risks of modern slavery as they come to light,” it said, and explained that supply chain mapping can be used to identify the risks in relation to suppliers and their supply chain.

4. Take action 

When modern slavery abuses have been identified, they must be “addressed immediately and in a manner that is proportionate and adapted to the circumstances of the case”. It continued: “In some cases, abuses will be a consequence of the way a specific industry is organised and these may require a longer term approach to address the root cause.”

Firms may need to take immediate action depending on the slavery and abuses uncovered, including calling emergency services if the risk is imminent, or contacting the local authority children’s services and the police should child labour be suspected. 

Instantly terminating contracts can leave victims more vulnerable, so the government recommended “working collaboratively with the supplier” in accordance with the terms of the contract, prioritising how to remediate the workers involved, reviewing the suppliers, and introducing independent grievance mechanisms to prevent such instances happening again.

5. Training

The government recommended that procurement staff undergo training to “raise awareness of the issues, how to identify the risks and ensure that suspected instances of modern slavery are handled correctly”.

The government has worked alongside CIPS to develop an ethics online learning suite and test, which includes materials on modern slavery and other ethical procurement concerns, including sustainability and upholding the CIPS and the Civil Service Code. 

It also recommended the government’s Commercial Function Knowledge Hub and courses by the Government Commercial College.

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