Three years on: How the Modern Slavery Act has reshaped best practice for sustainable business
The Modern Slavery Act (MSA) served to highlight issues of human rights abuses and human trafficking when it was written into UK law three years ago. But with half of UK businesses still pre-compliance with the Act, edie explores the impact it has had on sustainable business practices to date.
Since the launch of the MSA in 2015 – the first policy of its kind in Europe and second globally only to the California Transparency in Supply Chain Acts of 2010 – the UK has been at praised for being at the forefront of policy-led approaches to combatting modern slavery.
The Act, which came into force 29 October 2015, requires all companies with a turnover of more than £36m operating in the UK to publish an annual slavery and human trafficking statement outlining their approach to identifying and eradicating slavery in their supply chains.
While discussions of modern slavery elicit imagery often associated with developing countries, 2016 figures estimate there are 13,000 victims of modern slavery in the UK and the number of people identified as slaves in the country continues to increase each year.
But while the Act has spurred business action on modern slavery and raised public awareness of the issue, recent analysis by PwC found that 50% of companies in the UK are still in the pre-compliance phase.
Similarly, the latest figures from the Office for National Statistics and non-profit Corporate Responsibility recently revealed that 43 of the FTSE 100 firms failed to meet the requirements of the MSA in 2017.
With this in mind, edie spoke to businesses that have been leading the corporate fight against modern slavery, to find out the true extent of the Act’s impact.
The journey so far
The world’s biggest producer of canned tuna and UK-based communications giant BT aren’t necessarily companies you’d expect to be mentioned in the same sentence, but both have been praised for their leadership on tackling modern slavery in the wake of the MSA.
Thai Union embedded modern slavery within its SeaChange sustainability strategy in 2016, partly due to the MSA’s release, spurring it to launch a new code of conduct for ships within its supply chain and to introduce a requirement for all of its suppliers to disclose information on their recruitment practices.
According to the company’s global director for sustainable development Darian McBain, these moves helped Thai Union bring its approach to supply chain worker treatment together in a “more coherent way” while boosting transparency and invigorating its communications processes.
“If you go back to 2014, very few companies were talking about what they were doing on modern slavery,” McBain explains. “Before the MSA, I don’t think people had a clear definition for Modern Slavery – even though it helps if you can define what you are talking about. We were already addressing human rights issues through SeaChange, but the Act brings together a format for how you should communicate different aspects of your action.”
Even though the Act only covers UK operations, McBain explains that Thai Union has applied its guidelines to “several” of its other markets.
Her sentiments are echoed by BT’s modern slavery programme lead Eric Anderson, who explains that while the company has been working to tackle human rights abuses in its supply chains for years, the MSA has served to “intensify” the scale of its actions and the pace at which they are made.
“[The Act] has accelerated our work and gotten us to drive our due diligence around human rights more strongly and in a more targeted way, and to investigate the issue across our business and within our supply chain,” Anderson says.
Collaboration and technology
Just eight months after the MSA launched, BT partnered with Nokia to host the UK’s first conference bringing together leaders from the business community, governments, NGOs, academia and law enforcement agencies to co-create solutions to the modern slavery problem.
Since then, the company has sought to go beyond examining its own 18,000 suppliers to drive wider change – hosting the conference once more in 2018, partnering with the UN, Nokia and Microsoft to launch Tech Against Trafficking and developing a modern slavery reporting app alongside anti-trafficking charity Unseen.
“With our values and the way we approach social and environmental issues, leading the conversation feels natural to us,” Anderson explains. “There is huge potential to tackle this issue within the tech and communications industry, and I don’t think the sector is yet fulfilling this.”
“We don’t have all the answers or a magic bullet to solve the problem, but we know from experience that we are never going to get there unless we bring all the right people together for honest conversations about what’s working, what’s not and where further action is needed.”
— BT Group (@BTGroup) October 18, 2017
While BT has sought to maximise its impact by collaborating with competitors, Thai Union’s approach to driving change outside of its own operations has been to work with the Thai Government to launch new legislation requiring vessel owners operating outside of national waters to provide a satellite communication system and device onboard for workers at sea – advocacy that has seen the company shortlisted for The Thomson Reuters Foundation’s first Stop Slavery Award.
But as the fruits of the Fourth Industrial Revolution continue to change how businesses operate within society and corporates begin to incorporate new technology into their CSR or ESG approaches, McBain concludes that technology can only do so much.
“Unless we are listening to workers in supply chains, we aren’t likely to get to the heart of the issue,” she says.
“Technology – whether it is blockchain for traceability, technology that lets workers at sea communicate back to land or digital payments – will play a part, but I believe that businesses will increasingly begin to ask their supply chain workers what the biggest challenges they are facing at work are, and what systems they can set up to help improve their situation.”
— SeaChange® (@SeaChangeSD) September 13, 2018
Similarly, BT’s Anderson believes that technology will only become a universally useful tool once a “cultural change” in the corporate, public and governmental approach to modern slavery begins.
“I don’t think future action will be led by any one actor, but hopefully a combination of stakeholders will really help to create the momentum that is needed,” he concludes.
‘Frayed around the edges’
Another key aspect which will shape the future of the fight against modern slavery is policy – and with dozens of big-name retailers currently claiming that corporate compliance with the Act has been “weak” due to a lack of unification and enforcement, the Government’s consultation into potential changes to the MSA could not have come at a better time.
After assisting with a recent study which found that up to half of the UK firms caught by the act are yet to produce the required statement, PwC’s director of sustainability and climate change Mark Thompson explains that policymakers could do more to keep the business community’s feet to the fire.
“When the MSA came out in 2015, it was very much new and leading,” Thompson says. “Since then, many other similar pieces of policy have come out around the world which go further than the MSA in some regards – such as focusing on due diligence and encompassing the public sector as well.
“The conversation that the UK Act is starting to look a little frayed around the edges has definitely begun.”
Launched in August 2018, the consultation on the MSA could result in Government-issued fines for companies which do not publish the necessary statement – or in new powers that allow law enforcement agencies to forbid companies in the pre-compliance stage from selling goods or services.
According to BT’s Anderson, the latter would prove more effective at instigating “considerable change” in a “relatively straightforward way”.
“I think the obvious thing the Government could do is use the mechanisms that are already in place from the act to encourage organisations that haven’t yet made a statement to do so,” he concludes.
Similarly, Thompson concludes that the Act has made the issue of modern slavery “more real” to the business community, but that more needs to be done in order to prevent the speed and the extent of the response from “varying wildly”.
For Thompson, the crux of the issue is that policymakers have placed the onus on the public to lead the change.
“It was always evident that the court of public opinion would be where the real pressure would be applied. But while there have been a number of high-profile cases, it’s not clear to me that there is a significant level of public concern over corporate behaviour,” he explains.
“The public link between slavery and businesses like nail bars and car washes has been quite well-made – whether this applies to corporate supply chains and the realities behind a £5 T-shirt is another thing.”