The UK Modern Slavery Act (MSA) was the first in the world to require companies produce an annual statement disclosing the actions taken in that financial year to address modern slavery. Numerous countries, including Canada and Hong Kong appear to be following suit.
Despite the act coming into force four years ago, an estimated 4,482 companies have not produced an annual Modern Slavery statement.
Additionally, research by TISC report found that less than 10% of organisations with statements meet the minimum compliance criteria. However, stricter updates to the UK Modern Slavery Act – to improve compliance rates - and its use by the UK Government are on the way. There is an ongoing proposal in response to an independent review of the Act suggesting that the UK Government may start naming and shaming companies who do not produce statements – including those who produce non-compliant statements – and amending its procurement processes to only work with companies who have produced a compliant statement.
Companies must ensure that their statement meets the requirements of the Act now more than ever. Additionally, as more countries introduce legislation, it is important to fully understand the requirements of each law and how your company should respond. Many of the laws have similarities, meaning the process can be streamlined to improve efficiency and produce clearer, more consistent statements.
Underpinning a strong statement is an understanding of your company’s actions towards tackling modern slavery within the last financial year. While the approaches to tackling modern slavery differ widely, there are key elements to producing a strong statement that all companies can share.
5 top tips for a better Modern Slavery Act Statement
1. Clear communication is key
Many companies can feel overwhelmed in the disclosure process – not knowing what is relevant or pertinent to share in a statement. When writing your statement, remember that the audience for this statement can range from your own employees, shareholders and customers, to the general public and NGOs. Include a clear overview of your company – what you do, where you do it, how many people you employ and an overview of your supply chains. This information gives important context for the rest of the statement. Maps and infographics can be helpful in communicating lots of data, while case studies and call outs bring stories to life.
2. Be bold and transparent
Companies are often afraid of disclosing too much about their approach to modern slavery as they do not want to seem like they haven’t achieved as much as hoped for. However, transparency is the aim of the game, and sharing where there is more work to be done is not a flaw – in-fact it is to be commended and demonstrates integrity in tackling the issue of Modern Slavery. The TISC guidance notes that businesses can list actions they plan to undertake in the future as well as those already completed. This can be used to demonstrate progress and integrated actions which may take longer to implement.
Statements by BT and Bettys and Taylors are good examples of statements which clearly disclose their anti-modern slavery journey.
Read more: How Australia is tackling modern slavery
3. Know your numbers
In many Modern Slavery Statements, it is often found that the weakest area of disclosure is targets and KPIs. Businesses we’ve spoken to highlight difficulties in identifying the most appropriate targets or indicators to track progress on their modern slavery approach. However this can be broken down easily into indicators that the company may already have – such as the number of employees or suppliers who have completed training or pledged to uphold business ethics – and new indicators, such as the number of suppliers risk assessed for modern slavery, and the break down of results. Companies can be reluctant to disclose these numbers if they feel it opens them up to criticism (for instance having a high proportion of high-risk suppliers) or legal liability. On the contrary, these figures demonstrate a business is actively managing the issue and not shying away from the responsibilities that they have.
4. Be guided by guidance
The six recommended topics in UK Government’s Transparency in Supply Chain Guidance aren’t mandatory, but they provide structure and helps keep the flow of the disclosures clear. Additionally, those who review and compare statements – such as customers and NGOs - often use the guidance as a type of check-list, pointing out where sections – such as KPIs and targets – are missing. Using the six sections as a foundation for your anti-modern slavery actions is also a great initial step towards a thorough approach to tackling modern slavery and adhering to other international modern slavery legislation. Reporting on these six sections further demonstrates your company’s commitment.
5. Compliance, compliance, compliance
Even when a company produces an interesting, clear and thoughtful statement, many still do not meet the mandatory compliance requirements:
- Available ‘prominently’ on your website home page, or available in hard copy within 30 days of request if you do not have a website
- Approved by the board of directors (or equivalent management body), company or members - the structure of which depends on the type of organisation
- Features a named, relevant signatory - usually a partner or director – and their title in the organisation alongside the date of signing.
As the Government goes to consultation on its naming-and-shaming process, an excellent but non-compliant statement could result in being shamed – risking reputational damage – as well as potential penalties.
As modern slavery legislation becomes more common around the world, and pressure on companies steps up, it is important that the key elements of producing a strong modern slavery statement are understood by your company.
For further information or to discuss your Modern Slavery approach, please contact Rebecca.hall@maplecroft.com
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We joined Innovation Forum’s Ian Welsh and Francesca New from Mars in a podcast discussing how to assess human rights risks across complex global supply chains.