5 Must-Have Modern Slavery Controls For Retail Businesses

In July 2020, an undercover report found workers in Leicester making clothes for online fashion retailer Boohoo being paid as little as £3.50 an hour. Later in December 2020, the Guardian published another article alleging that Boohoo was selling clothes made in a factory in Pakistan where workers were earning as little as 29 pence an hour.

Figures from last year reveal that almost 30 modern slavery victims were found every day in the UK last year. Latest estimates from the International Labour Organization also show that modern slavery and forced labour affects almost 25 million people worldwide.

With the increase in public awareness, there is growing pressure on UK-based retailers from investors to comply with modern slavery laws. Remaining diligent about ethical supply chain practices will set retailers in good stead, both ethically and legislatively speaking.

Performing due diligence is also best practice when it comes to protecting your brand and meeting customer requirements – after all, being linked to human trafficking and labour exploitation is extremely damaging to the credibility of any retailer, and rightfully so.

So how can retail businesses ensure ethical supply chain practices? Here are five Modern Slavery controls all retailers ought to practice.

Make a commitment

All large companies with an annual turnover of £36m or more are required to publish annual statements on what they are doing to tackle forced labour in their operations and supply chains under the 2015 Modern Slavery Act. However, it’s still important for smaller retailers to make a strong commitment against modern slavery.

Assigning board level responsibility for these best practice policies and laying out what the company wants to achieve in preventing modern slavery will help retailers take meaningful action.

Establish good recruitment practices

Experience shows that the recruitment stage is often where workers are most at risk from modern slavery exploitation, especially where third party labour recruiters are involved, and even more so where workers are migrant. Therefore, retailers must pay particular attention to the recruitment process.

Ensure you establish due diligence checks when appointing labour providers and develop a written policy stating that the cost of recruitment is a business cost, not to be passed onto workers.

Good record-keeping and monitoring

Ensure you establish checks of workers’ home addresses and check occupancy figures here (those held in modern slavery are often housed in overcrowded, cramped conditions). Migrant workers should have access to their passports and companies should check bank accounts to identify wages aren’t being collected by one account.

Team leaders/supervisors should be comfortable monitoring, recording, and reporting any concerning signs in the physical wellbeing of employees, e.g., bad hygiene, extreme fatigue, or malnourishment. They should feel comfortable approaching workers informally to discuss any issues.

Assess where your greatest risks are (then act to tackle them)

Draw up an initial high-level assessment of your supply chain, including direct and indirect suppliers, labour providers and contractors to identify low, medium and high-risk suppliers (consider, for example, using self-assessment questionnaires to gather information from potential suppliers).

Based on your available resources, take immediate steps to reduce the risk of any high-risk suppliers, e.g., by requiring them to establish grievance or whistleblowing procedures. Ensure you develop channels for gathering and managing any future risk information.

Train staff

Most employees are not even aware that modern slavery is an issue – that’s why training must start by raising awareness on the subject and presenting facts/figures on the severity of modern slavery in the UK and around the globe.

As well as training managers/supervisors on particular red flags to look out for in employees and how to raise and report these issues, employees across the board will benefit from awareness training which provides the tools and knowledge they need to identify and report concerns about modern slavery.

How can we help?

Increasing the levels of transparency and awareness are paramount when it comes to complying with modern slavery laws. Retail businesses can use awareness training to empower employees to spot the red flags of modern slavery and educate them about its prevalence and the areas it’s more likely to take place.

Find out how DeltaNet International can help with our range of Modern Slavery eLearning courses.

How to Fight Modern Slavery in the Supply Chain

How to Fight Modern Slavery in the Supply Chain

Many products currently available on the UK High Street are made by, or contain ingredients produced by, adults and children trapped in slavery. This is a global problem, so far-reaching that The International Labour Organisation (ILO) estimates the number of Modern Slaves is now approaching 25 million (and growing). These adults and children generate billions of dollars in revenue for those exploiting them, prompting a commitment by world leaders at the G20 summit in July 2017 to take ‘immediate and effective measures’ against forced labour.

It’s true that awareness of this problem has grown in recent years, leading to legislation being introduced to combat it and increase commitment from organisations, especially large, global ones, to identify and eliminate Modern Slavery from their supply chains. This is a difficult task, however, largely because supply chains are increasingly complex in big companies and often cross several countries’ borders.

In 2015 the UK introduced ‘The Modern Slavery Act’. It aims to clamp down on the trafficking of people into the UK, but also requires big UK businesses to report on how they tackle slavery in their global supply chains. Under the Act, companies with an annual turnover of over £36 million must produce a Slavery and Human Trafficking statement stating what they are doing to prevent modern slavery abuses in their operations and supply chains. This is true even if the company in question is doing nothing – they must admit to this in their transparency statement. All companies should have published their first statement by 30 September 2017.

In addition to Modern Slavery, the issue of child labour is also becoming increasingly spotlighted. The ILO estimates that over 150 million children aged between 5 and 17 are involved in child labour, and often in hazardous industries with dubious health and safety practices. MSCI, the global research and analysis firm, has identified 62 companies against which allegations have been made about employing under-age workers. MSCI is concerned that large scale use of child labour could affect the long-term viability of such companies.

So, what can be done by organisations to identify labour exploitation in the supply chain?

There are a number of red flags that can help supply chain managers and buyers to identify areas of their organisation’s supply chain that are vulnerable to slavery, human trafficking, and the exploitation of child labour.

Red flags include:

  • The location of the suppliers. The Global Slavery Index identifies regions and countries that have an increased risk of labour exploitation. These include India, China, Thailand and Bangladesh.
  • Labour hiring practices of the suppliers. A variety of red flag practices can occur during the recruitment, employment, and contract termination of workers. For example, workers being charged excessive recruitment fees, being misinformed of the contract details, or not being provided with a clearly written contract.
  • Industry sector. Some industries are considered more at risk than others as they tend to operate in countries that have minimal labour laws or because the work is seasonal and therefore temporary. These industries include: agriculture, clothing and footwear manufacturers, construction, and hospitality.
  • Publicise labour standard concerns. An organisation which has previously been linked to unethical labour practices either via a media campaign, non-government organisation report (such as the Ethical Trading Initiative) or through audit non-compliance should be considered as a risk and investigated further before being selected as a supplier.

A supply chain mapping exercise should be carried out on existing suppliers to identify which of them could potentially be using slave labour. When sourcing a new supplier these red flags should be considered early in the sourcing process. Self-assessment questionnaires can be used to gather information from potential suppliers in relation to the red flags.

All this information should be collated to determine whether the supplier is high, medium or low risk. Once the risk level of the supplier has been identified a decision can be made whether to enter into a supplier agreement with them.

As part of any supplier agreement, suppliers should agree to participate in and fully co-operate with regular audits and/or onsite assessments. This will ensure that they are maintaining their ethical standards and that information provided in their self-assessment documentation and transparency statement is accurate. It will also help to determine whether they are being successful in tackling human trafficking and modern slavery in their organisation.

Can VinciWorks help?

We have a range of courses covering the issue of Modern Slavery, including an introduction and overview of what Modern Slavery is, detailed information of how to identify and assess the risk of Modern Slavery in your supply chain, and how to write/publish a Modern Slavery Transparency Statement in line with legislation.

As ever, we’re more than happy to chat through your requirements on this important issue.