CORE Coalition Director, Marilyn Croser, on new briefings to support companies and investors tackle modern slavery.
20 June 2017
Around 2000 company statements have now been published in response to the Transparency in Supply Chains clause in the Modern Slavery Act 2015.
This is a great start, but there is cause for concern: the vast majority of statements, over 80%, are not signed by a director on behalf of the board and not available from the homepage of the company’s website, as specified in the Act. Most reports are just a couple of pages long and do not indicate that the company is addressing issues in a holistic way.
In response to this CORE and our partner organisations Anti-Slavery International, Business & Human Rights Resource Centre and Unicef-UK have published four new briefings on the reporting requirement. Two offer guidance for companies on human rights due diligence and what to include in a Slavery & Human Trafficking Statement. A third looks at examples of weak and notable reporting practice to date and the fourth is designed to help investors engage with companies on modern slavery.
These guides complement our February 2016 publication, ‘Beyond Compliance: Effective Reporting Under the Modern Slavery Act’, which identifies priority recommended actions for companies including:
- Understand the risks of business operations, with particular attention to business models and operating context.
- Develop comprehensive policies reflecting the greatest areas of risk.
- Conduct human rights due diligence, including human rights impacts assessments and examination of internal business procedures.
- Develop action plans and a process for informing business decisions, including supplier selection.
- Include clauses on modern slavery in supplier contracts.
- Put in place reporting procedures for suspected incidents of modern slavery, and appropriate grievance mechanisms.
Understanding the risks
Companies should examine their business model to identify practices that can create a risk of modern slavery. These include: sub-contracting; complex supply chains and employment relationships; the presence of labour recruiters in the supply chain; high flexibility and low profit margins.
Addressing the risks
Companies need to develop an approach to influence day-to-day business decision-making. This should be underpinned by human rights due diligence, including a human rights impact assessment to identify factors that may create risks to people.
It should include supply chain mapping, with sourcing and supply chain management teams collecting data and cross-referencing the parts of the business against identified risks, including country-specific data. Companies should prioritise stakeholder engagement in the highest risk countries.
Acting to minimise risks
Companies should avoid practices and demands of suppliers that may lead them to abuse human rights. These can include late payments; late orders; tight deadlines; and small profit margins. Companies can act to avoid these practices by analysing their production and buying cycle; working with suppliers to reduce harmful practices; identifying and avoiding high-risk suppliers; and recognising and fostering long-term relationships with suppliers that offer decent conditions.
The TISC requirement has been referred to as a potential ‘game-changer’ on supply chain transparency. This will only be realised when companies step up to the challenge. Civil society organizations are ready to support businesses to do the right thing – and to call out those who are evading their responsibilities.
CORE is the UK civil society coalition on corporate accountability. It works partner organisations, including Anti-Slavery International to advance the protection of human rights and the environment with regard to the global operations of UK companies.