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UK Modern Slavery Act: Analysis of early company statements, new guidance available

Early company reports so far appear not to be meeting the Act’s requirements, and lack adequate information

  • Guidance now available for company reporting, but ultimately government may need to enforce better reporting to drive corporate action on modern slavery
  • New free, public registry will monitor company compliance with the Act

Analysis | Registry | Company Guidance | Press Release

Analysis reveals that the majority of company statements published to date do not yet comply with the Act’s requirements: companies must make a statement approved by the Board and signed by a company director (or equivalent) available on the homepage of the company’s website.

Out of 75 statements found, only 22 were both signed by a director and available from the company’s website homepage. Thirty-three were not signed by the director, and 33 companies had not placed a link to the statement from their website homepage.

While there are no legal requirements on the content of the statement, the legislation suggests six areas on which information may be included, such as organisational structure, company policies and due diligence; nineteen statements published so far address all these points. Critically, only 9 statements met the minimum requirements and covered the six suggested areas.

The CORE Coalition and its partner organisations including Amnesty International, Anti-Slavery International, CAFOD, Focus on Labour Exploitation (FLEX), Know the Chain, Quakers in Britain, ShareAction, Traidcraft and Unicef UK have produced new guidance for companies on how they can report effectively under the Act. The guidance is also supported by ECPAT UK, Walk Free and Unseen.

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9 March 2016

Firms show patchy compliance with UK anti-slavery requirements

Author: Katie Nguyen, Thomson Reuters Foundation

Britain may need to enforce better reporting of what companies are doing to erase slavery from their supply chains, after corporate statements show dozens of firms have not fully complied with landmark legislation, two pressure groups said...The law was passed a year ago, in response to growing alarm over revelations that slave labour is being used to produce everything from cotton T-shirts and cellphones to catfood for global consumption. Only 22 of the 75 statements collected so far were signed by a company director and available on the company's homepage - as required by the new law, according to the Business & Human Rights Resource Centre and CORE Coalition. The legislation also suggests six areas that companies should consider reporting on, including company policies and due diligence. But only nine firms met the minimum requirements and covered the six suggested areas, the groups found. Their research noted, however, that Intel and Ford - two of the biggest brands - had some of the most detailed statements."... there's far too many slave-like conditions in the products entering Britain," said Phil Bloomer, director of the Business & Human Rights Resource Centre, which has created a registry of statements to benchmark companies."(The Act) has sent out very powerful signals to companies around the world that they have to start looking at their supply chains and their own operations to make sure they're doing better. That's the good news," Bloomer told the Thomson Reuters Foundation. "The bad news is that the UK government Act has some significant weaknesses." The government should follow up with non-compliant companies and demand that firms provide more detailed statements on what they are doing to combat modern slavery, Bloomer said.

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7 March 2016

Lacklustre compliance on anti-slavery law

Author: Lindsay Fortado, Financial Times

When the UK’s Modern Slavery Act came into force last year, politicians hailed the new law as precedent-setting. It was the first national bill in the world that would require companies with turnover of more than £36m that operate in Britain to publish the steps they were taking to eradicate the crime from their supply chain. But since it has been implemented, the initial company statements have been lacklustre. Only 22 of 75 of the statements to comply with the law fulfilled the requirements to be both signed by a director and available on the company’s homepage, according to campaign groups. EE, Millennium & Copthorne Hotels, EMC, Imperial Tobacco, and Jigsaw are among the companies that have failed to do one of the two requirements, the Business & Human Rights Resource Centre and CORE Coalition found in their research. Even fewer companies — only nine — met the minimum requirements on the areas of information that should be included in the statements, such as company policies and due diligence. “While the companies that have published reports under the act are to be commended as early movers, it’s clear that there is widespread misunderstanding among business about what’s required,” said Marilyn Croser, the director of CORE Coalition...Critics of the Modern Slavery Act say that, while it brings attention to the crime and its prevalence, there are no monetary or criminal penalties for companies that do not comply with the supply chain legal reporting requirement. When the act was still being debated, members of the House of Lords tried to require a government depository for the statements as part of the legislation, but the idea was defeated. The Business & Human Rights Resource Centre has created a central registry where it is assembling all of the statements required by the act that they can find through web searches. Whether the early compliance reports are indicative of future ones remains to be seen. More than 12,000 companies globally are estimated to be required to comply so a pool of 75 reports is far from the full picture. The campaign groups say that, if the level of reporting remains inadequate, the government should enforce better compliance. There was a bright spot: two of the largest companies that have put out statements, Ford and Intel, had some of the most detailed assessments, the groups found.

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