Employment Law Experts Say Results Of CIPS Survey Are ‘Worrying’

Over a third of UK businesses are ignoring their obligation to tackle modern slavery, according to the Chartered Institute of Procurement and Supply (CIPS).

The CIPS’ survey found that 34% of businesses required to publish a modern slavery statement have failed to do so.

They also revealed that 37% of supply chain professionals in businesses required to deliver a statement had not read the government guidance.

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.”

From 31 March 2016, every business with a turnover of more than £36m and a footprint in the UK is required to publish an annual transparency statement.

The CIPS found that UK businesses have fared better than international firms operating in the UK, with 71% doing so compared with only 40% from internationally-based businesses.

The study also found that more UK supply chain managers have found slavery in their supply chains since the act, up from 6% to 10%.

Hill added “While awareness of modern slavery is becoming more widespread, we need to ensure that outrage turns into action. 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.”

Sybille Steiner, an employment partner at law firm Irwin Mitchell, said:

“The Modern Slavery Act 2015 which came in to force in 2015, applies to companies and partnerships supplying goods or services with global turnovers of £36 million and above, to report annually on policies, training, processes and the effectiveness of measures taken to combat slavery and trafficking.

“This has to be done in an annual report and made accessible on the organisation’s homepage. The Act applies irrespective of where an organisation is incorporated or headquartered. If a foreign organisation carries on a business or part of a business in the UK and meets the £36 million turnover threshold, it is likely that the Modern Slavery Act 2015 will apply.

“The companies that have good modern slavery statements use it as an opportunity to emphasise their zero-tolerance approach on violations of anti-human trafficking and anti-modern slavery laws which remains a major worldwide problem.  Whilst only 10% of firms according to the Chartered Institute of Procurement and Supply, have found evidence of slavery in their supply chains, the issue remains a live one.  It is hoped that this number will continue to reduce.

“Rather more worrying however is there remains one third of businesses required by law to complete a ‘modern slavery statement’ who have failed to do so. This figure therefore remains high.

“Whilst there are no financial penalties for failing to complete the statement, it can have damaging effects on businesses who do not comply.

“Many tenders require evidence that businesses are taking this seriously and have such a statement, and it can be a PR disaster not to have one or to have one and not to adhere to it.

“It is likely that pressure groups will target organisations in vulnerable sectors and subject them to reputational campaigns to force annual disclosure.  Indeed we have seen this in the past with low priced clothing stores targeted around their supply chains and forcing a change in this as a result of public pressure.

“This has also happened in other areas where campaigns have been targeted at companies failing to pay for example the National Living Wage or for alleged abuse of matters such as zero hours contracts etc. This can then in turn have a knock on effect on the finances and in some cases (irreparably) damage reputations.”