From 1 April 2023, government departments were issued with new guidance on identifying and managing the risk of modern slavery in their supply chains. Alex Minett, head of products and markets at CHAS, explains more
Latest government statistics show modern slavery in supply chains is on the increase. November 2022 saw the highest number of potential modern slavery victims referred to the Home Office for investigation since their National Referral Mechanism (NRM) began in 2009 – a 38% increase on the same quarter the previous year.
Furthermore, in 2021, 12,727 potential modern slavery victim referrals were made to the NRM by first responders – the police, councils, Border Force and selected charities authorised to refer. Analysis from the Centre for Social Justice estimates there could be at least 100,000 victims in the UK, with the actual number expected to be even greater.
Modern slavery and the law
According to the Modern Slavery Act 2015, any company that has an annual turnover of £36m or more and meets the associated criteria, must publish a slavery and human trafficking statement each financial year setting out what steps they have taken to prevent modern slavery in their business and supply chains.
However, modern slavery isn’t just a problem for big businesses. Increasingly, contracts and tender documents include anti-slavery clauses and request compliance with the act as standard. This means smaller businesses, irrespective of turnover, should be prepared to demonstrate their actions to prevent the risk of modern slavery in their supply chains. Therefore, the government’s new PPN can provide useful guidance for businesses of all sizes looking to take a proactive approach.
Taking action on modern slavery in the supply chain
PPN 02/23 – Tackling Modern Slavery in Government Supply Chains sets out four areas of activity and associated actions: identifying and managing risks in new procurements; assessing existing contracts; taking action when victims of modern slavery are identified; and training.
1. Identifying and managing risks in new procurement
Government departments must continue to identify and assess the risk of modern slavery in a new supplier according to a table of six core characteristics: industry type; type of workforce; supplier location; the context in which the supplier operates; commodity type; and business/supply chain model. However, the new guidance includes an update to the sectors of concern to include cotton, PPE and polysilicon.
Where an organisation is deemed to be at high risk of modern slavery, there is a new requirement for supply chain information to be supplied at the selection stage of new procurements.
New procurements should also be designed in line with the associated risk level, including (if appropriate) application of the Social Value Model.
Key actions in this section also include reviewing and amending operating procedures and contract management processes and any related documentation in line with the updated guide.
2. Assessing existing contracts
Actions in this area involve undertaking risk assessments on existing contracts and carrying out supply chain mapping exercises. The guidance also recommends strengthening contract management to manage risks and working with suppliers towards progressive improvement. Collaborating with suppliers to encourage transparency and ensure suppliers are not afraid to highlight issues as they arise is also key and the importance of proportionality is emphasised.
3. Taking action when victims of modern slavery are identified
Organisations must address modern slavery and human rights abuses immediately and proportionately. Transparency is key here, with a recommendation to ensure suppliers work openly and proactively to identify and resolve any issues and change working practices.
In some instances, abuses may be a consequence of how an industry is organised. In such cases, a longer-term approach to address the root cause might be appropriate.
Contracts should only be terminated as a last resort.
4. Training
Ongoing training is essential to ensure staff involved in contract procurement and management can identify the risks and ensure that suspected instances of modern slavery are handled correctly.
All relevant staff should be made aware of the Modern Slavery Helpline on: 08000 121 700 or online.
This quick reference guidance provides further information on actions recommended in the PPN to mitigate the risk in supply chains.
Conclusion
Modern slavery remains high on the political agenda, but achieving systemic change requires a unified approach. The latest PPN offers best practice guidance for all sectors to draw upon to drive effective human rights due diligence in their supply chains.
Alex Minett
Head of products and markets
CHAS
Tel: +44 (0)345 521 9111
www.chas.co.uk
