The International Labour Organisation estimates that forced labour generates an annual profit of $150 billion. Of the 40 million victims of Modern Slavery, 25 million people suffer from forced labour, the most common element of human exploitation, 18 per cent of whom are children. Many manufactured goods available in high-street shops are made by or include ingredients grown, harvested or mined by people in slavery. Complex supply chains can make it virtually impossible to guarantee that a product has not been produced using slavery. Forced labour is present in numerous countries and many industries including Retail, Food, Hospitality, Construction and Cleaning.
Chartered Institute of Procurement & Supply (CIPS) has found a critical factor that put the risk on labour rights violations, slavery and trafficking.
• The nature of the location of the workplace
• Complex supply chains make it difficult to monitor adherence to standards.
• Labour recruiters.
• Unscrupulous operators.
• Pressures made on costs.
• The boosting of profits by exploiting workers.
The Transparency in Supply Chains Clause (ITSC) demands companies with an annual income above £36 million to produce a Slavery and Human Trafficking statement, indicating the steps they are taking to prevent Modern Slavery abuses in supply chains and operations.
Companies should include information on: their structure, supply chains, and policies on Modern Slavery and human trafficking; identified risks and specify the steps taken to mitigate these risks; the staff-training workshops and their capacity to tackle Modern Slavery and human trafficking. The company director on behalf of the board had to sign Modern Slavery statements by the end of September 2017, with a link to the report available on the company’s website homepage.
However, to June 2018, only an estimated 5,600 out of the approximately 9,000-11,000 companies required to comply have published statements. But only 19% meet all the minimum statutory requirements set out in the Act. Comments showed them being short and vague.
Since the introduction of the UK Modern Slavery Act three years ago, UK businesses are not doing enough to identify Modern Slavery in their supply chains. Only 23% of companies that the Act applies to have carried out site inspections to check for evidence of any slavery or human trafficking, demonstrating a worrying lack of progress from last year research (Chartered Institute of Procurement & Supply (CIPS). This year, half of Supply Chain managers reported that they had provided Modern Slavery training to their staff. No doubt the problem is on the rise.
What are the causes of this minor jump?
Companies’ supply chains where the Act applies, managers mentioned it is due to:
• Supply Chain professionals do not think their business is doing enough to tackle Modern Slavery.
• Lack of new anti-slavery policies put into place to tackle modern slavery by UK businesses
• There are no extra resources to help them do so.
• They wanted more access to guidance and training on how to tackle the problem.
• Further commitments from government and businesses are now needed to provide more guidance and resources.
• Lack of tools to equip Procurement professionals to relieve UK supply chains of this terrible crime.
Cath Hill, CIPS Group Director, said: "Awareness of modern slavery alone will do little to help exploited people. Eliminating human suffering is not something that can be done on a piece of paper. Modern Slavery is an issue that requires constant, proactive attention from the whole business community, sharing knowledge, best practice and intelligence. Instead of seeing Modern Slavery prevention as an annual compliance exercise, business and government must integrate it into the way they conduct due diligence every day.
"Businesses, governments, and consumers must be reminded that we are talking about human beings working in dreadful conditions with little or no pay and without the freedom to live their lives, just to save the rest of us a few pence at the checkout."
What to check out:
1. Supply chain managers who fall under the Modern Slavery Act.
2. Provided training to employees and local suppliers on Modern Slavery risks and compliance.
3. Undertake site inspections.
4. Completed a statement in compliance with the Modern Slavery Act
5. Ensured all workers receive the minimum wage and robust immigration checks are in place.
Are Supply Chain Executives alone to face this problem?
Many institutions related to the procurement of safety in their Supply Chain possible Modern Slavery, are researching and publishing studies, exploring whether and how companies are including information on particular raw material and sector-specific risks in their statements, looking at the description of their operations and supply chains and their due diligence.
They provide pieces of evidence and reports to pressure the Government to publish lists of those companies required to report and enforce the Act. (CORE, in the Financial Times.) They give guidance in briefings for companies and investors impacted by Modern Slavery legislation, to assist how businesses can tackle Modern Slavery in supply chains and global operations. They are also supporting the work of the Business & Human Rights Resource Centre to push up reporting standards by making company statements easily accessible.
Dave Food
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