Finally, the long wait is over; a few companies have already taken the bull by the horns and published their statements (75 did so ahead of the official commencement date of 31st March). Other eligible companies - there are estimated to be around 12,000 – must follow suit and publish theirs within the next five months.
It’s great news that these early movers are on the pulse, but are their statements up to scratch?
We’ve taken a look at some of these early statements (gathered together by the Business & Human Rights Resource Centre). Certainly, there are some examples of laudable transparency; Ford’s statement is a great first step, demonstrating the complexities of its supply chain through a visual infographic, and noting its key risks and the policies in place to address these.
John Lewis Partnership's is another one to watch. Using the Modern Slavery Act as a trigger to enhance its overall human rights disclosure, the launch of its first standalone human rights report includes its slavery and human trafficking statement, as well as more in-depth information on its salient human rights issues in line with the United Nations Guiding Principles Reporting Framework.
Yet despite a handful of noteworthy examples, the ambiguity of the guidelines (see our previous blog) is making for some fairly lacklustre reporting overall.
Common questions on the lips of our clients over the past few months have highlighted the considerable confusion around what should actually be included in the statement. How much detail is required? What if we don’t have all the answers already? Our existing policies include commitments to abide by local laws where we operate, so presumably we’re covered? How should the statement be presented? Does our Code of Conduct meet the requirements, and if so, does it negate the need to publish a separate statement? How are other companies tackling it?
It’s no surprise, then, that these questions are reflected in the rigour of the statements so far
The guidance requires that companies include a prominent link to their slavery and human trafficking statement from their homepage, and that it must be signed by a director or Board member. According to the research conducted by the Business & Human Rights Resource Centre and CORE Coalition, only 22 of the 75 statements that were published early comply.
Beyond these two mandatory requirements, the guidance is less rigorous, suggesting that statements ‘may include’ information such as the organisation’s business structure and supply chain, and identification of parts of the supply chain with a high risk of slavery and human trafficking. It also suggests disclosing information on the due diligence processes, company policies and effectiveness in ensuring that slavery and human trafficking are not taking place in the supply chain. From the statements we’ve reviewed, only a minority include such information, which begs the question ‘is the slavery and human trafficking statement going to deliver on its intended goal of eliminating modern slavery?’.
So, is the statement fit for purpose?
The purpose of the Modern Slavery Act is to shine a light on the all-to-often ‘hidden’ issue of slavery and human trafficking in the modern day supply chain. We know it exists from the increasing number of times it’s picked up in the media, and we come across it through our own advisory work with clients; tackling slavery in West African cocoa growing communities and the Thai fishing industry, and debt bondage in the Malaysian electronics industry, to cite recent examples.
But, rather than reporting on the issue in the spirit to which the guidance was intended, if companies continue to publish vague, watered down statements that do not fulfil even the most basic of requirements of the Act, then perhaps there’s a need for more rigorous enforcement, or a revision of the guidelines. Certainly, it would be beneficial if there was less room for confusion, and a greater emphasis on transparent disclosure of the challenges and risks companies face.
Currently, the penalties for non-compliance are minimal, the reliance instead being on stakeholder scrutiny to hold business to account. Perhaps there’s an opportunity for civil society and NGOs to play a more active role in calling out companies that do not comply, or who are complicit in modern slavery.
What are the positives?
The Act does acknowledge that improvements in companies’ approaches to addressing and reporting on the issue are likely to be made over time. Our hope is that, in the absence of more rigorous guidelines and penalties, a benchmark of best practice seeded by a handful of leading companies, will be established this year, against which those who have fallen short can follow. Alongside sufficient stakeholder pressure, we hope this will help to raise the bar.