The CORE Coalition, Amnesty International, Anti-Slavery International, the Business & Human Rights Resource Centre, Fairtrade Foundation, Freedom United and Shareaction have made a joint submission to the Independant Review of the Modern Slavery Act.
Summary and key recommendations
The UK Modern Slavery Act 2015 has raised awareness among businesses, investors, the media and the UK public about the prevalence of modern slavery in the private sector and beyond. We are of the view that the transparency requirement of the Act has some potential to spur action from businesses to address the risk factors that give rise to serious exploitation. However, corporate reporting and transparency, while important, should be understood as elements of a more comprehensive approach necessary to addressing the risks. This should include a requirement for companies to carry out due diligence throughout their supply chains and operations.
Three years on from its introduction, it is apparent that the legislation’s impact is seriously limited by shortcomings in the reporting requirement, in combination with inadequate monitoring and enforcement. While we have seen some improvement over time, we would expect to see clear progress by more companies three years since the passage of the Act.
There are several worrying trends. 40% of companies have not a published a statement. Many companies have published a first-year statement but have not published a second or third-yearstatement as required under the Act. Some companies have rolled their statement over to the next financial year without updating it to reflect the steps that have been taken in the financial year to address modern slavery. This indicates that even companies that are complying see the obligation to provide a statement as merely a tick box exercise.
Most published statements do not meet the minimum requirements of the Act and the overall quality of reporting is poor. It seems reasonable to assume that the underlying factor is the lack of substantive action to report upon. The most comprehensive reports come from companies that had begun to address human rights, labour rights and modern slavery in their supply chains prior to the Act’s introduction. These tend to be consumer-facing companies that were already subject to NGO and media scrutiny, but many companies covered by the Act do not fall into this category and have not given attention to the issues. Assessment of reports published by FTSE 100 and other companies shows only a small number of companies demonstrating meaningful action to identify and mitigate risks, with the majority publishing generic statements that provide little to no useful information. The absence of any incentive in the Act for companies to proactively identify and disclose risks is reflected in modern slavery reports. The legislation suggests six topic areas for inclusion in reports, but ultimately companies have the freedom to include and to omit content as they see fit, with many treating the reporting requirement as a mere compliance exercise.
The Independent Review provides an opportunity to take a holistic approach to developing s.54, with careful thought given to how the legislation can drive the type of corporate action that will make a difference to victims of modern slavery. We recommend that the Independent Review makes the following proposals to Government:
• Consider how to craft a reporting provision that requires companies to report principally on the effectiveness of their actions to tackle modern slavery, rather than simply reporting that action has been taken;
• Invest the resources necessary to enable proper analysis, monitoring and enforcement;
• Commission research to provide recommendations on how the public procurement process can be used to incentivise high labour rights standards in companies’ operations and supply chains;
• In line with the trend across Europe, commence the process of introducing a requirement for companies to carry out human rights due diligence throughout their operations and supply chains.
Download the full document to continue reading.