What’s changing in the world of mandatory corporate compliance?
The EU’s proposed new corporate due diligence and corporate accountability directive will cover companies that sell to the EU, not just those based there. Businesses will be required to identify, address and remedy their impact on human rights and the environment. Crucially, this is likely to go up and down the value chain, which means customers as well as suppliers. Businesses could be sued inside the EU for human rights violations or environmental damage committed by their customers or end-users of their products in third countries.
We’d like to think slavery has been consigned to history, but sadly, that’s far from true. According to Anti-Slavery International, it is estimated that 40 million people are trapped in modern slavery today. According to the Global Slavery Index, there is a surprisingly high rate of slavery in developed countries: an estimated one in 800 people in the US, for example, and 10,000 people in the UK, though the real number is probably much higher. Another possibly surprising fact is that roughly 90% of slaves are victimised by private enterprise, and that may be because it seems profitable: $150 billion is generated from the forced labor industry every year.
Being an enabler of modern slavery is not only terrible on an ethical level; it can also cause severe reputational and financial damage on an organisational level. But by knowing what to look out for, asking the right questions, and knowing how to respond, you and your organisation can take an active part in helping abolish modern slavery.
Everyone, everywhere, has the has the right to live a life free of slavery. We’d like to think slavery has been consigned to history, but unfortunately, that’s far from true. While it may look different than the traditional slavery-associated images of shackles and transatlantic ships, and while it may be kept just out of site, it is actually taking place everywhere, in every single country around the world.
When people are severely exploited by others for personal or commercial gain, this is modern slavery. This exploitation can take many forms, from human trafficking, to forced labour and bonded labour, descent-based slavery, forced child labour, and forced and early marriage. Some of these, such as descent-based slavery, are more prevalent in places such as Africa, but many others are prevalent everywhere, including all throughout Western society.
Though millions of men, women and children are being held in slavery and deprived of their basic human freedom, and there is much work to be done, there are slivers of progress being made to tackle modern-day slavery. What are governments around the world doing to help tackle this dreadful phenomenon?
Is slavery a thing of the past? Unfortunately not. According to the Global Slavery Index, it is estimated that on any given day, there are 15,000 people living in conditions of modern slavery in Australia. Cases of forced labour exploitation are especially high in industries considered high risk, such as agriculture, construction, domestic labour, meat processing, cleaning, hospitality, and food services.
As such, Australia’s implementation of the Modern Slavery Act 2018, which came into effect on 1 January 2019 was a welcome, if overdue, step in the effort to combat modern slavery. While the act technically went into effect last year, 2020 is the first year that organisations that fall within the scope of the law will actually be required to report.
A new report by the Centre for Social Justice found that there are currently at least 100,000 victims of modern slavery in the UK. This is a huge increase from the 10,000-13,000 suspected victims according to a 2017 government study. Recently, Leicester-based fashion brands Boohoo and Quiz have been embroiled in modern slavery allegations.
Boohoo is currently investigating reports that workers at one of its Leicester suppliers were being paid just £3.50 per hour, almost £5 lower than the £8.20 national minimum wage. They have also allegedly been forced to work during the COVID-19 lockdown without protective equipment and social distancing. These reports immediately started to damage Boohoo’s reputation, with big-name retailers such as ASOS, Next and Zalando all dropping Boohoo’s clothing from their websites and their shares plummeting as a result. A few days later, Quiz announced that they believe one of their suppliers subcontracted clothing production to another supplier. They believe this subcontractor was paying their staff well below the minimum wage.
Frank Field MP, Baroness Elizabeth Butler-Sloss and Maria Miller MP have recently completed a review of the operation and effectiveness of the Modern Slavery Act 2015 (the Act) and to recommend improvements commissioned by the Home Office. With the full report yet to be published, we take a look at the effectiveness of The Act.
If a recent independent review of the Modern Slavery Act is anything to go by, the answer would be not very close at all. Today, it is believed that there are still over 21 million slaves in the world, with around 10,000 in the UK alone (although this number is believed to be much higher. This includes sex trafficking victims, child workers and sweatshop employees. In many countries where slavery is prevalent, it is difficult for law enforcement to stop such crime. It is therefore important that companies step up and are more proactive in their efforts to stop this horrible and inhumane crime.
Is the Modern Slavery Act helping to solve the problem?
With the UK government increasing its efforts through increased spend and more resources going towards arresting and prosecuting offenders annually, it’s clear that The Act has played an important role in reducing the number of modern slaves in the UK. The government spent around £39 million in 2017/18 and £61 million in 2018/19 on modern slavery and in 2017, the total number of arrests for modern slavery offences was 131, almost twice the number from the previous period. That number is expected to rise in the 2018/19 period, with members of a gang thought to have around 400 victims recently sentenced to jail.
The Global Slavery Index estimates that on any given day, there are 15,000 people living in conditions of modern slavery in Australia – a shocking number in a modern, developed country like Australia.
Following consultations with the business community, the Australian Modern Slavery Act 2018 went into effect on 1 January 2019. This comes four years after the British implemented their own Modern Slavery Act. The Act complements Australia’s existing criminal justice response to modern slavery, which includes specialist police investigative teams, a dedicated victim support program and a National Action Plan on Human Trafficking and Slavery.
Last week, the Crown Prosecution Service published its first report into Modern day slavery following the introduction of the Modern Slavery Act in 2015. The report showed that there was a 27% increase in the number of suspects charged with slavery offences in 2017/18 compared with the previous year. Referrals of modern slavery allegations have also risen to their highest level and the number of prosecutions is on the increase too.
These are all positive signs that the Modern Slavery Act which was introduced in 2015 is beginning to have an effect on ending the scourge of people trafficking, domestic servitude and prostitution. However, a BBC programme, The Prosecutors: Modern Day Slavery, highlighted the ongoing difficulty of actually bringing the perpetrators of these crimes to justice. One of the reasons is the method of spotting and reporting incidents of slavery.
2017 marks the first year that all companies (with revenues of at least £36m) must provide a Modern Slavery Act disclosure. Many companies are now preparing their second statement and are seeking guidance on how to amend their statement and how to address ongoing training requirements.
Modern Slavery Statement template – are you aware of what needs to be included in a modern slavery statement? Learn about the requirements and download a free template
Modern Slavery Statement Registry – with over 3,300 statements, this registry allows you to explore what other companies in your sector are doing to eradicate slavery and how they are drafting their statements
Quick start guide to compliance with the Modern Slavery Act
Tomorrow, 18th October, marks UK Anti-Slavery Day. Created by an Act of Parliament to raise awareness of the millions of men, women and children held in slavery and deprived of their basic human freedom, it can also shine a light into the slivers of progress being made to tackle modern-day slavery.