Last month, the Modern Slavery Act came into effect across the UK, signifying a huge step forward in abolishing slavery throughout Britain and beyond.
Last month, the Modern Slavery Act came into effect across the UK, signifying a huge step forward in abolishing slavery throughout Britain and beyond.
In the weeks that followed, a startling statistic has been bought to light. It’s been revealed in a joint study conducted by Ashridge Centre for Business, Sustainability at Hult International Business School and the Ethical Trading Initiative that 71% of UK companies believe that modern slavery is likely to occur at some point within their supply chain.
This shocking admission from UK companies not only stresses the importance of the Modern Slavery Act, but also the severe supply chain risk that slavery poses to the UK economy.
The Modern Slavery Act: a snapshot
The Modern Slavery Act instructs businesses that operate within the UK and have a turnover threshold of £36 million to produce mandatory statements, reporting on the steps they are taking to identify and prevent modern day slavery within their supply chain.
Although a company isn’t required to take any steps to reduce modern slavery, it’s crucial to remember that these statements are available to the public, and will likely contribute towards the public’s perception of a business.
The supply chain risk
As previously discussed, a joint study has recently been conducted across 21 retailers to gain an insight into how companies across the UK are approaching and reacting to the Modern Slavery Act.
The study discusses how slavery presents a significant strategic dilemma for companies. Pressures to bring products to market at an agreed quality, cost and timeframe, as well as the complexities and demands of modern supply chains, can make it difficult to identify and address incidents of modern slavery.
Reflecting on the complexities of modern supply chains, an anonymous respondent who holds the job title of Head of Corporate Responsibility at their company, argues:
“Think about how big the supply chain is. More than 5,000 factories, and you don’t have a camera in each one. So, any brand that is saying it does not have any issues, you don’t know your supply chain.”
In many instances, the exploitation of vulnerable workers is the biggest risk that companies face and the most common example of modern slavery.
As another anonymous respondent summarises: “As we’ve learnt more about the complexity of supply chains, it’s very clear that the biggest risks we face, of the most severe abuses in supply chains, are where you have vulnerable workers. They’re generally migrants and, most acutely, illegal migrants. If you’ve got people who do not feel they can run to the legal authorities, or work in countries where those authorities wouldn’t treat them tolerantly anyway, they are incredibly vulnerable to abuse.”
However, with supply chains becoming increasingly complex, identifying the misuse of vulnerable workers is easier said than done.
A focus on company honesty and integrity
While the study reveals that 92% of businesses cite damages to their reputation as their biggest drive for corporate change, many also acknowledge the risk to workers as a significant factor too.
It appears that for many companies, addressing the risk to workers has become a personal issue, after witnessing the effects of slavery first hand.
One survey respondent explains, “the mind-shift I’ve seen generally is it’s not just about looking after the share price and the reputation any more.
“It’s more that people actually realise this is important – this is about doing the right thing, having a moral responsibility, putting something back into where you’re taking out resources. This is about people.”
A new approach to minimising supply chain risk
Businesses are now exploring new strategies to minimise the supply chain risk attributed to slavery. Most interestingly, the study discovered that company leaders who provide a strong vision and support for ethical trade and modern slavery issues make more progress in eradicating slavery.
Furthermore, the study also discovered that companies that are aligned in their response to slavery drive a business culture where employees are able to have open discussions regarding responsible sourcing.
Companies are also wising up to methods which aren’t as effective, the study suggests. While supplier audits have long been a staple of supplier relationships, most businesses admit that they are only particularly effective in identifying instances of modern slavery.
Visibility reduces supply chain risk
The biggest challenge that companies face in tackling modern day slavery is the lack of supply chain visibility over their suppliers. This means knowing where each component of a product is sourced from, which is easier said than done. However, Segura’s software enables garment manufacturers and retailers to maintain supply chain visibility once an order is placed, allowing them to do business on their own terms.
