Late last week, the UK Parliament passed the Modern Slavery Act, a bill designed to require UK companies to report any steps they are taking to address and prevent human trafficking and modern slavery in their supply chains.
According to the Global Slavery Index, modern slavery is estimated to include more than 36 million people who work in conditions completely controlled by others. Most of these people are found deep in the supply chains of global corporations.
To comply with the Modern Slavery Act, it doesn’t mean a company will have to actually address human trafficking and modern slavery. A company simply has to report whether it has taken any steps to do so.
Therefore, if a corporation files a report indicating that it has taken no steps, it will still be in compliance with the law.
So, does this do us any good?
This act pushes corporations one step closer to connecting the process of reporting to the concrete steps of taking action.
We've seen this cause/effect hundreds of times as external pressure – supplier scorecards, stakeholder pressure, or legislation – pushes companies to report. The first report can be humbling, but the process of reporting opens up action steps, focus areas, and progress.
As companies file their first reports, some saying “no action taken.” We believe that their stakeholders will ask “why?” It is then that they will realize it is time to do an initial Social Audit, Supply Chain Analysis and/or Life Cycle Analysis.
A recent article in Huffington Post written by two CEOs speak to the effect of data:
"The vulnerability in our supply chains was in labour hire, specifically the recruitment of migrant workers from disadvantaged backgrounds. Social audits revealed that recruiters were stealing wages from workers through excessive recruitment fees and high interest loans, creating a situation of debt bondage. Upon learning of these terrible conditions, we took immediate action so that workers were paid back the fees they were owed, allowing them to earn a proper wage.”
The companies and the CEOs in question were performing social audits prior to the UK Modern Slavery Act, and were able to take action.
We believe that more companies will engage with auditors, and decisive action will be taken because of this new law.
So, yes, the Modern Slavery Act is going to do some good.
Would stronger legislation and adoption in other countries, like the U.S., do even more good? Likely.
However, corporations can and should begin on this important work now. There is no need to wait for legislation to become a more socially and environmentally responsible organization.
Learn more about supply chain assessments and audits and how they can help your company create a system to uncover risks lurking in the supply chain. How have supply chain audits helped your organization uncover risk? Let us know in the comments!