Megan Paul writes for People Management on how business can help stamp out modern slavery in its supply chains

The Modern Slavery Act 2015 enforces mandatory requirements on companies of a certain size to identify, mitigate and account for how they manage their human rights due diligence process in the form of a modern slavery statement. While the Act is evidence that the UK has made some efforts in mitigating slavery within supply chains, we are still a long way from eliminating the risks. 

Megan Paul, Partner writes for People Management on how businesses can help stomp out modern slavery in its supply chains. Read her article titled Stamping out modern slavery: how can HR help? in full below:

According to the Financial Reporting Council, fewer than half of employers provide a clear and comprehensive discussion of slavery concerns in their modern slavery statements – and 12 per cent  of companies fail to provide one at all.

Businesses in the UK therefore carry significant risk of modern slavery being found somewhere in their supply chains. While there are further steps the UK government will need to take to ensure transparency in supply chains and corporate sustainability more broadly, there are several practical and effective steps businesses can take to improve their practices in this area and work towards a sustainable and transparent supply chain.

Due diligence

Due diligence is key to ensuring that third parties are applying best practice when it comes to human rights. Organisations can implement policies that identify actual or adverse environmental and human rights impacts and monitor the effectiveness of those policies using internal controls, frequency of reviews and training.

However, such policies need to have the right support from a senior level (and possibly be accompanied by incentives) to have a positive impact on behaviour. They will require effective communication and training by appropriately trained staff – it is not sufficient to simply have a policy that requires personnel to seek to identify human rights risks, without the proper support and training to implement them.

Organisations need to start by asking the right questions around human rights and working conditions, such as:

• Who in the organisation is responsible for investigating and mitigating the risks of human rights violations? How is that person supported? Are they properly incentivised?
• What are the minimum standards expected in the business, and do these align with legislation, guidance and best practice?
• When entering negotiations with a new supplier, what due diligence procedures are in place to ensure that the supplier is not a risk to the business’s supply chain?
• What is the organisation’s approach to whistleblowing? Is there a procedure in place for reporting human rights violations within the business and the supply chain?
• Does the organisation have a remediation plan for workers if there are incidents involving human rights violations?
• Once these factors are established (and there are many other questions a business may need to consider), appropriate protective measures can be put in place.

Taking continuous action

Organisations should also conduct frequent audits of their supply chains, ensuring that they align with best practice guidelines. This can be difficult to implement if the contractual rights and obligations have not been considered when entering contractual negotiations. However, if businesses want to comply with a basic set of standards or are required as a matter of law to give a modern slavery statement, it must have these rights to audit their supply chains on a regular basis to mitigate risks to human rights.

Companies should therefore seek to create and enforce a cascade of audit and management across their own supply chain, as well as the supply chains of their partners and suppliers. This should include an examination of direct and indirect suppliers as well as contractors, taking necessary steps to reduce risks within every link in the supply chain.

These steps require consistent and continuous management and evaluation, embedded into the long-term strategic direction of the business, and underpinned by principles of sustainability and transparency.

Communicating effectively

It is vital that organisations prioritise transparency when publicly reporting on modern slavery. In doing so, firms will ensure that their work is linked to the modern slavery statement and data gathering is tied to best practice. Moreover, businesses should also consider voluntarily publishing with the home office to enhance transparency and accessibility.

The Modern Slavery Act requires businesses to publish an annual modern slavery and human trafficking statement that is signed off at board level or equivalent. Although not yet a legal requirement, the legislation recommends reporting on areas including due diligence, organisational structure, and training available to staff to demonstrate the controls, assessment and policies that are being implemented.

The wider picture

While directives included in the Modern Slavery Act are only mandated on companies of a certain size, they are relatively straightforward to implement across all business types and should be universally adopted if we’re going to truly tackle modern slavery and human suffering. Companies failing to comply with regulations not only risk reputational damage, but also the wellbeing of their employees.

Responsible businesses are demonstrating that they want to play a greater part in tackling modern slavery and human trafficking offences around the world. This is a good start, but to achieve the results we all want to see, processes to mitigate risks need to be adopted across all organisations and embedded alongside a continuous process of measurement and due diligence.

This article was first published in People Management.