Industry issue:

Protecting against Modern Slavery

30 November 2015

The Natural Resources sector depends on a social license to operate. Reputation is important and allegations of modern slavery, including forced or compulsory labour, create lasting damage.  Companies in the sector frequently operate in developing countries, managing large workforces and complex supply chains. Whilst it can be tempting to dismiss modern slavery as something that affects others, it can and does happen. The UK government has recently introduced legislation to focus business on its role in protecting against modern slavery, whilst seeking to embarrass those with ineffective policies, controls and diligence. 

Since October, the Modern Slavery Act requires every commercial organisation that supplies goods and services in the UK, and has a turnover of over £36m, to report on the steps taken to ensure human rights are upheld in all parts of its business and supply chains. Whether companies in the sector are technically in or out of scope, the changes will shine a torch on companies in the sector and demonstrating good governance will be key.

The annual statement on Modern Slavery must be signed by the board and displayed via a prominent link on the company website, affording it a level of public as well as regulatory scrutiny.  In terms of content, The Act suggests that the statement might include the following details:

  • A description of the firm’s business model and supply chain relationships
  • Policies relating to modern slavery including due diligence and auditing processes
  • Details of training available and provided to staff
  • The principal risks and how they are evaluated and managed
  • Relevant KPIs to show year on year progress.

Alternatively businesses are required to publish a statement confirming that no steps were taken to this effect – which, considering reputational risk, is not likely to be an attractive option!  Directors and management need to act quickly to protect their company reputation and demonstrate strong governance and a commitment to ethical practices.