Towards the end of 2015, Greenstone ran a series of webinars focussed on providing a practical insight into addressing the UK Modern Slavery Act. These webinars were extremely popular and generated a number of questions and discussion points around the Act.
We have turned these questions into a set of FAQs for reference. Hopefully, the questions raised will reflect the issues and concerns of others and therefore provide some wider benefit. However, if you do wish to speak to us about the Modern Slavery Act or indeed how we can facilitate the data gathering process through our SupplierPortal solution, then please do not hesitate to get in touch.
When does the Slavery and Human Trafficking statement need to be made?
The first companies required to produce Slavery and Human Trafficking Statements are those with financial year end 31st March 2016. You are advised to produce a statement within 6 months of the end of your financial year.
In the situation that your financial year ends on 31st December, you would not be required to submit a statement until after 31st December 2016.
Does the Modern Slavery Act require organisations to assess our entire supply chain, so our suppliers’ suppliers?
The Modern Slavery Act requires organisations to set out what steps they have taken to ensure that modern slavery is not occurring in their supply chains and in their own organisations. The clarification in the guidance on the term ‘supply chain’ is that ‘it has its everyday meaning’.
From this we believe that there is an expectation that you would, in time, look down the supply chain beyond your own suppliers.
However, as laid out in our webinars, we believe an organisation needs to be able to demonstrate it is working towards ensuring full compliance across all of its own suppliers, whilst understanding where there are areas of heightened risk.
As a result the first step is to categorise suppliers and define the approach taken. How you do this could be by spend, invoice frequency and so on, but there may be country, sector, business, transaction or partnership risks that might be more appropriate categorisations in relation to modern slavery.
Once you begin to gather information from your suppliers, you can start to further identify risk areas (against defined indicators) and start to put in place action programmes for suppliers, groups of suppliers or for areas of your own business. These actions could involve collaborating with suppliers, other buyers or NGOs. It is in these instances where you are most likely to be able to work down the supply chain, and enable change across your ‘suppliers’ suppliers’.
The important thing is you can demonstrate a reasonable and appropriate approach to achieving the requirement and spirit of the act – to remove slavery from the supply chain - and that over time you can demonstrate progress towards this.
There are a number of case studies provided in Annex E of the ‘Transparency in Supply Chains etc. A practical guide’. guidance document.
Would an organisation need to assess their clients’ supply chain?
Assessing you clients’ supply chains would not traditionally fall under the definition of your own supply chain. The clarification on the term ‘supply chain’ in the guidance, is that ‘it has its everyday meaning’.
However, if your clients are covered by the Modern Slavery Act, then you may well be required to provide them with relevant information and demonstrate your policy on modern slavery. Also, depending on your relationship with the client and the services you are providing them, there may be some benefits to both organisations to adopt a common approach to modern slavery.
Does Greenstone offer a standard set of questions, KPI's and reports which can be adopted by its SupplierPortal clients?
Through SupplierPortal Greenstone offers a standard set of questionnaires, covering Labour Standards, Anti-bribery and Corruption, Commercial Information, Health and Safety, IT Security, and Environment. All customers have the opportunity to include their own proprietary questionnaires.
The labour questionnaire contains questions on human rights and working conditions (amongst other topics), and it is here that the questions relating directly to modern slavery are located.
KPIs and reporting capability can be adapted and amended by each customer. The analytical tools available e.g. scorecards, response flagging, audits, groups and labels, ensure that you will be able to report flexibly against the KPIs of your choice.
Is internal training part of the requirements of the Modern Slavery Act or is this best practice?
Training is not a requirement but a suggested component or section of your Slavery and Human Trafficking Statement.
The guidance suggests that training might work best in a targeted manner, with practical advice being provided to those that operate in a high risk areas such as purchasing. The high risk areas of the business depend upon where you are operating and the services that are delivered.
In the areas where employees could come into contact with victims, they can therefore identify and address the area of modern slavery and implement your approach as a business. Training elsewhere in the business might focus more on awareness building and on what you are doing to tackle the issue.
Further information on training and other areas you may include in your Statement can be found in Annex E of the ‘Transparency in Supply Chains etc. A Practical Guide’ document.
Where can I get further guidance or a policy template to work with?
There is not currently a policy template available. However, there is a Government guidance document titled, ‘Transparency in Supply Chains etc. A practical guide’. This outlines The Act itself and all the requirements for compliance. In Annex E it provides examples of how to construct a Slavery and Human Trafficking Statement.
Here are some of the areas covered by the guidance:
- Outline of The Modern Slavery Act 2015.
- Who is required to comply? This includes further information on subsidiaries and franchise models.
- Writing a slavery and human trafficking statement.
- The structure of the statement.
What measures is an organisation expected to go to, to ensure the reliability/accuracy of supplier information?
The degree to which you verify supplier information will vary. For large organisations it is not possible to verify all of your own supplier’s information and then in addition to begin to validate all their suppliers as you move down the supply chain.
The guidance for the Act suggests that your due diligence procedures should be:
- Proportionate to the identified modern slavery risk
- The severity of the risk, and
- Level of influence a business may have
- Informed by any broader risk assessments that have been conducted
As discussed in the webinars, organisations should be looking to achieve a basic level of compliance across all suppliers (perhaps covering high risk groups first), then applying a layered approach to evaluating and acting on supplier information. This could involve collaboration, audits, sector approaches and involving NGOs.
Is bonded labour regarded as a form of forced labour in this context?
In Annex A of the guidance document, ‘Transparency in Supply Chains etc. A practical guide’, the definition for forced or compulsory labour is as follows:
‘Forced or compulsory labour is defined in international law by the ILO’s Forced Labour Convention 29 and Protocol. It involves coercion, either direct threats of violence or more subtle forms of compulsion. The key elements are that work or service is extracted from any person under the menace of any penalty and for which the person has not offered him/her self voluntarily.’
Please view the ILO Forced Labour Convention 29, for full details.
Is the safer course of action actually to publish a nil statement?
This depends entirely on the attitude of your organisation and depending on how you define ‘safe’.
In terms of compliance with the Act, you would be complying with the letter of it, but not the spirit. The issue here is that the Act refers to complying with both the letter and the spirit and that may raise an issue.
If you are safe from a court action by publishing a nil Statement saying you are not taking any steps to address modern slavery, you would also therefore be safe from having to deal with any potential non-compliance or malpractice that might be found (which is of course the aim and spirit of the act).
Regardless of the possibility of court action, it may not be an advisable approach when you take into account the public nature of your Statement - it should be clearly available the homepage of your website. This could mean that there is a risk to your business from employees, investors and the media for example. In addition to this, should an incident occur, or an issue be uncovered in your supply chain, and your organisations is stating publicly that they have made no effort to address it, then the damage to the organisation could be far greater.
To what extent do you see this overlapping with United Nations Guiding Principles (Ruggie) compliance?
We do see a certain level of overlap with the content of United Nations Guiding Principles and the Modern Slavery Act. Through SupplierPortal, Greenstone offers a standard set of questionnaires, covering Labour Standards, Anti-bribery and Corruption, Commercial Information, Health and Safety, IT Security, and Environment. Where appropriate these questionnaires draw on the UNGPs.
The labour questionnaire contains questions on human rights, pay and working conditions, child labour, freedom of association and diversity, and it is here that the questions relating directly to modern slavery will be located, alongside some of the key elements of the UNGPs.
It is therefore less of an overlap issue but more that they address similar in a complimentary manner. We think that an organisation’s approach to satisfying both should therefore be joined up as addressing one naturally will address areas of the other.
Should we include the Human Trafficking and Slavery Statement in the annual report?
If you are responding effectively to the Modern Slavery Act then this is certainly an initiative which you could include in your annual report. In order to respond effectively your organisation will need to produce a Slavery and Human Trafficking Statement.
This Statement should provide an insight in to your approach to supplier engagement as well the processes that are being adopted to ensure compliance with the Act. This, along with the fact that you are reporting over time against a number of KPIs, should ensure that you have a very relevant response to this mandatory legislation against which performance can be easily measured year on year, and which can be included in your annual report.
