Supply chains; the modern chains of slavery

“Students…are taught that slavery ended in the 19th Century. But, sadly, nearly 150 years later, the fight to end this global scourge is far from over.” Hillary Clinton, 2010.

We all know that in some parts of the world people work in questionable conditions, such as sweatshops. However, we are less likely to associate the products we buy with a person being bought, sold, or trafficked as property. Yet, deep in supply chains this is exactly what is happening.

Increasingly consumers and governments are becoming interested in the way organisations treat and protect their employees, and those working on their behalf.  The UK government has recognised this, and in 2015 passed the Modern Slavery Act[1] requiring companies with annual worldwide gross revenues of £36 million or more to publish a statement showing how they are tackling modern slavery. 

This is not an easy task. There are over 45 million people in bondage across the world[2]. Despite their number, they are hard to detect, and many are hidden in the second or third tier of supply chains. Yet, in 2015, the then Home Secretary, Theresa May, made it clear that it is not acceptable for any organisation to say that “they did not know[3]” or to “ignore the issue because it is difficult or complex[4]”.

Over the coming years companies must ensure they are regularly interrogating their often complex, multi-organisational, and cross-geographical supply chains. Making certain that they are doing all they reasonably can to prevent slavery in their suppliers, and that they remain compliant with the Modern Slavery Act.

What do organisations have to do?

While the Modern Slavery Act does not stipulate that organisations must guarantee their entire supply chain is slavery free, the legislation does mandate that organisations must publish a modern slavery statement, signed off by the board and signed by a director. The legislation also states that the statement should be published with a prominent link to it on the organisation's homepage, around the same time as their annual accounts.

The statement should cover 6 key areas from the Act:

  1. Summary of operations and supply chain
  2. Policies relevant to modern slavery
  3. Supplier audits (due diligence), including leveraging current relationships, and building modern slavery considerations into contracts with current suppliers to ensure they are taking adequate steps to prevent slavery
  4. Risk assess supply chain through data available including assessing the country risk of the supplier. This could be done through the use of the Global slavery index
  5. Measure the effectiveness of the approach through KPIs specific to slavery and trafficking
  6. Training key employees on their role preventing modern slavery with a view to rolling this out to the whole organisation

The Government has not been prescriptive about the layout or specific content of a slavery and human trafficking statement. This provides an opportunity for organisations to maximise the impact of the information disclosed in the statement, focussing on their anti-slavery methodology, rather than committing to specific consequences of their approach. 

What next for organisations’ modern slavery approach?


In our view organisations should not stand still. There should be an ambition to approach modern slavery and the statement as an iterative process. Internally, firms should set out to create a plan, improving their approach to the prevention of modern slavery year on year, and working to embed the 6 key areas from the act within your organisation.

This can take many forms, whether it is disclosing more information within the modern slavery statement, improving the way in which the response to modern slavery is measured, to expanding the education of employees regarding modern slavery. This will create awareness of modern slavery beyond the confines of the procurement department, ensuring that all employees are made aware of the scourge of slavery, and the part they can play in its prevention.

 In addition, companies should not simply re-publish an un-edited statement year on year, and should point to the changes they have made to their plan when republished, to allow for a meaningful comparison over time.

This is even more pertinent as organisations like the Business and Human Rights Resource Centre have aggregated all Modern Slavery statements online[5]. The creation of this repository for consumers makes it easier than ever for people to find out whether their bank, supermarket, or favourite shop are doing all they can to prevent the crime of modern slavery.

It is imperative therefore that companies pay attention to the act and their statement. Consumers are more likely than ever to consider the provenance of their goods when purchasing, and will vote with their feet if they don’t like what they see.

[1] http://www.legislation.gov.uk/ukpga/2015/30/contents/enacted

[2] http://www.globalslaveryindex.org/findings/

[3] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/471996/Transparency_in_Supply_Chains_etc__A_practical_guide__final_.pdf

[4] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/471996/Transparency_in_Supply_Chains_etc__A_practical_guide__final_.pdf

[5] https://business-humanrights.org/en/uk-modern-slavery-act-registry

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Author

James Hemson Senior Consultant