Why UK manufacturers should embrace the Modern Slavery Act

  • Written by Peter Needle
  • Published on 15 October 2015
  • Blogs

The Modern Slavery Act is set to transform supply chain transparency across the UK and beyond.

The Modern Slavery Act is set to transform supply chain transparency across the UK and beyond. Large companies will soon be legally required to release an annual report, detailing measures taken to uncover and address modern slavery in their supply chain. We believe that this legislation should be embraced rather than endured in order for companies to really benefit. 

Struggling to meet supply chain standards

Following the Rana Plaza tragedy in 2013, new regulations and reporting standards came into force across the global garment industry. For many manufacturers and retailers alike, these may seem like barriers to business which only act to slow profits and increase paperwork. 

Some garment manufacturers in Bangladesh are struggling with recently imposed regulations. The Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety are overseeing the inspection of thousands of garment factories, some of which have already been closed due to high levels of risk. Any factories that fail to meet these international standards will be unable to export to many major international retailers, potentially losing most of their income. 

Modern slavery in retail supply chains

Last year, the Thai fishing industry hit the news as brutal modern day slavery was revealed as commonplace. Thousands of unpaid immigrant workers were thought to be enslaved and abused on Thai fishing boats, and some of the world's largest food retailers were directly affected by the scandal. 

As a result, Thailand was downgraded to the lowest ranking in the US state department's 2914 report on Trafficking in Persons. The country has remained on the blacklist this year, and in April 2015, the EU gave Thailand six months to combat illegal and unregulated fishing or face a seafood import ban. 

Thai Union, Thailand’s largest seafood producer, recently launched a new Business Ethics and Labour Code of Conduct in order to tackle trading tensions and improve supply chain accountability. The revised code focuses on health and safety standards and the ethical treatment of workers, and will apply to all member companies as part of efforts to eradicate modern slavery in the retail supply chain. 

Thiraphong Chansiri, Thai Union president and CEO, claims that the new code “defines the expectations of our suppliers and showcases our commitment to earn the trust of customers, consumers and the world by operating with integrity and high ethical standards.” 

Developing a trustworthy supply chain

What if manufacturers stopped opposing the drive for more transparency, and embraced it instead? 

"Uncertainty over the trustworthiness of supply chains erodes consumer trust,” explains Alexis Bateman, director of the Responsible Supply Chain Lab at the Massachusetts Institute of Technology Centre for Transportation & Logistics. In the Wall Street Journal, Bateman argues that greater supply chain transparency can “allay consumer fears and capture commercial benefits." 

He states that supply chain transparency can offer three big benefits to companies: 

  • Helping to meet consumer and stakeholder demands for ethical supply chain practices
  • Reducing supply chain risk by strengthening supplier relationships
  • Improving supply chain efficiency and increasing long term profit margins 

As the Modern Slavery Act comes into force in the UK, supply chain transparency is more essential than ever. Further regulations may also be on the way, such as The Business Supply Chain Transparency on Trafficking and Slavery Act of 2015 in the US. By being pro-active and pursuing supply chain transparency, whether or not it is yet enforced by law, companies can improve their public reputation and protect themselves against future sanctions. 

Supply chain transparency measures don’t have to come with a huge price tag either. Segura’s cloud-based solution provides complete visibility over orders placed with your approved suppliers, helping to monitor and manage your sourcing strategy. Our software can operate as a standalone service, or in harmony with existing ERP and PLM systems, and uses a transaction-based pricing model so you only pay for what you use.



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