As the first deadline for companies to publish their modern slavery statements approaches – within six months of their financial year-end – there are widespread concerns that most still have “not grasped the spirit of the Act”. Many of their statements do not meet the minimum requirements.
Section 54 of the Act requires any company carrying out business in the UK with a turnover of over £36 million to produce an annual slavery and human trafficking statement. It must detail the steps taken by each company to identify and mitigate the risks of modern slavery in both its supply chain and its own business.
Despite guidance published by the CORE Coalition (the leading UK civil society network on corporate accountability) on how to draft these statements, the majority have been neither signed by a director nor appear as a link on the homepage of the company website – two basic requirements of the Act. Some statements seem to be based on a common template and share identical language. The lesson here is that a company wanting to plagiarise should at least ensure that it is copying a good rather than a bad example, and that it lives up to what it has copied!
The Business & Human Rights Resource Centre has created a free and open central registry to which it invites companies to submit their statements. To date, just over 620 company statements have been submitted. Phil Bloomer, director of the Centre, has said that doing so will mean “investors can assess companies’ risks, consumers can decide if they want a company’s products in their homes, and companies can learn from their peers about how to do better”.
On that note, some companies – Ford, Marshalls and Intel, for example – have already been singled out as pack leaders. Their statements provide detailed information on supply chain structure and reflect diligent policy and best practice in identifying areas carrying operational risks of slavery. The civil society groups behind the Act, of which there are many, are doing their utmost to help investors, consumers and activists “to reward these companies and press laggards to take action”.
Given that investors with a total of £940 billion in assets are supporting the reporting requirements of the Act, the registry provides the space for a morally just and financially expedient race to the top. As Matt Crossman, of Rathbone Greenbank Investments, has said, the registry is “a useful tool which will allow investors to identify company action to comply with the Act, and protect their long-term returns”. But of the 12,000 or so companies liable to the Act’s provisions, only five per cent have so far submitted their statements to the registry. Other companies would do well to take part.
The most recent global slavery index, funded by Australian businessman Andrew Forrest’s Walk Free Foundation, estimates that 45.8 million people are currently living in some form of modern slavery. That’s roughly one for every 160 people worldwide.
In late July, writing in the Telegraph, Theresa May called modern slavery “the great human rights issue of our time”. She is determined to implement a “national and international mission to rid our world of such barbaric evil”. As Home Secretary, Mrs. May brought forward the legislation last year following a Home Office enquiry into the prevalence of modern slavery in the UK. She has since pledged that her government will lead the way in the fight against slavery.
There are currently no hard penalties for non-compliance. But if a pattern emerges, it seems likely that this will change. Marilyn Croser, director of the CORE Coalition, has warned that governments “must start taking enforcement action against companies”. Therefore the boards of companies who have failed so far to be moved by moral impulsion might be wise to consider taking sufficient action to pre-empt legal compulsion.