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One in three businesses are flouting Modern Slavery legislation – and getting away with it

Wednesday, September 06, 2017

One in three businesses are flouting Modern Slavery legislation – and getting away with it

  • Over a third of businesses covered by the Modern Slavery Act flout requirements – with no consequences
  • 10% of UK businesses report having found modern slavery in their supply chains
  • The profession does not think that the Modern Slavery Act goes far enough and calls for greater legislation

A third (34%) of organisations required by law to complete a statement in compliance with the Modern Slavery Act have failed to do so, according to a new survey from the Chartered Institute of Procurement & Supply. The survey of 1,288 supply chain professionals found that 37% of supply chains managers subject to the Act’s remit admitted to not even having read the Government guidance on Modern Slavery.

The Modern Slavery Act requires all businesses that operate within the UK and with a turnover of more than £36m to produce a yearly statement outlining the actions they have taken to combat slavery in their supply chains. Currently, there are no punitive consequences for non-compliance. Even more alarming are the figures relating to foreign businesses who conduct business in the UK and are therefore also required to complete a statement: 60% have failed to do so. Again there are no consequences for non-compliance.

The Impact of the Modern Slavery Act

UK Supply Managers who:

Before the Act

After the Act

Said they would not know what to do if they found modern slavery in their supply chains

52%

17%

Have mapped their suppliers to understand the potential risks and exposure to modern slavery

33%

45%

Ensured all workers in the UK in their supply chain receive the minimum wage and apply robust immigration checks

41%

40%

The CIPS survey revealed that a tenth* of UK supply chain managers admitted having found evidence of modern slavery in their supply chains since the Act, compared with 6% who had found it before the Act was introduced

This news coincides with recent figures from the National Crime Agency which revealed that there were far more modern slavery victims in the UK than previously thought, with 300 live modern slavery police operations currently in progress in the UK alone.

The lack of engagement with the modern slavery statement has resulted in a large proportion of businesses having few or no policies in place to tackle the issue. Only 45% of organisations have provided any training to their staff to help them spot modern slavery, while just 42% have mapped their supply chains to better understand their risks. As a result, only 6% of supply chain managers under the Act’s remit are absolutely certain there is no slavery in their supply chain.

There are no legal consequences for a business which does not complete a statement, and the survey reveals that the industry does acknowledge that further legislative pressure is needed to goad them into action. Less than half of supply chain managers who are under the Act’s remit think it goes far enough, with more than half calling for fines for businesses who fail to comply with the Act. More than two-thirds of those surveyed called for the Act to be extended to organisations with a turnover of less than £36 million.

However, the increased attention placed on modern slavery does seem to have raised awareness among supply chain professionals about how to deal with this scourge. In 2015,52% of UK supply chain managers said they would not know what to do if they found modern slavery in their supply chains, compared to just 17% today.**

Cath Hill, CIPS Director, said:

“The results of our survey are shocking. Legislation that was designed to be world leading has fallen at the first hurdle: compliance. Whilst awareness of modern slavery is becoming more widespread, we need to ensure that outrage turns into action. We can only ensure that people are protected from this appalling crime if there is a consequence for not doing so. At the moment, the Modern Slavery Act has great intent and some of its ambitions are being met. However, those working in the procurement and supply chain profession have told us that without stricter policies and harsher punishments for those who are not compliant with the Act, little will change.

“The Modern Slavery Act has set us on the right path but there is still a long way to go before we can say that we are actively eliminating modern slavery from supply chains.”

CIPS produces publications, such as the Tackling Modern Slavery in Supply Chains Guide, which are available free to anyone interested in eradicating slavery from their supply chains.

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Notes to Editors:

About the Chartered Institute of Procurement & Supply:

The Chartered Institute of Procurement & Supply (CIPS) is the leading international body representing purchasing and supply management professionals. It is the worldwide centre of excellence on purchasing and supply management issues. CIPS has a global community of 115,000 in 150 different countries, including senior business people, high-ranking civil servants and leading academics. The activities of purchasing and supply chain professionals have a major impact on the profitability and efficiency of all types of organisation and CIPS offers corporate solutions packages to improve business profitability.  www.cips.org, @CIPSnews.

About the survey

These findings were drawn from a survey of 1,288 supply chain managers from across the globe who were asked on their views and reactions towards modern slavery and the Modern Slavery Act. The survey ran from 3rd August to 16th August 2017. The survey included 506 businesses who the Act applies to.

*This figure does not include those who responded ‘don’t know’ to the question.

** This survey was conducted between 07/12/15 and 21/12/15 among 469 members of the Chartered Institute of Procurement & Supply, of which 259 members are at businesses with annual turnover of £36m or more. The press release is available to view here.