Taking effective action: how do we measure modern slavery?
16 March 2020
In 2016, I started speaking to companies about the first statements that they had to submit for the UK’s Modern Slavery Act. I remember receiving an abrupt letter from a FTSE 350 healthcare company, explaining that they didn’t believe that they had any modern slavery in their supply chain.
From evidence of children making surgical instruments in dangerous conditions in Pakistan, to notorious examples of forced labour in annual cotton harvests in Uzbekistan - the material used for hospital bedding and uniforms - I found it very difficult not to question their certainty that this didn’t exist in their own supply chain.
The new legislation enforced companies trading in the UK, with turnover of more than £36m, to produce an annual statement about their steps towards tackling modern slavery within their supply chains. Some companies were embracing the Act and had produced quite thorough descriptions of their activities. But in some of the conversations I had, they seemed very dismissive of the possibility that modern slavery could exist within their supply chains – even before they had done any risk assessment. Despite this, when granted anonymity, 77% of a sample of leading brands thought that slavery did exist within their supply chain.
Since then, many company statements have demonstrated compliance with the basic legal requirements in the legislation and outlined policies that have been adopted. This is progress – but I agree with a review of the Modern Slavery Act’s outcomes which suggested “there are real questions about the extent to which it has led to meaningful changes in practices by companies”. I am yet to see much reporting that has found instances of the poor practice that we see numerous reports of (see end of blog).
Similar conclusions were reported by the CORE coalition when reviewing the statements of companies that use raw materials with known risks of modern slavery and trafficking. Additionally, a recent report showed that the hospitality industries’ approach to well documented risks of forced labour was lacking, with very few companies detailing the actions they have taken.
There are exceptions to this. For instance, Marks & Spencer’s most recent statement gives the following example about passport retention – a contributing factor to many people’s situation of forced labour:
“In SE Asia, we found a specific issue where a factory was holding workers’ passports for migrant workers, who felt this was the most secure place for their personal documentation. Following our intervention, the factory returned passports ensuring workers had secure personal lockers to keep them in while on site. The factory developed a new policy on passport retention which was signed by all staff. Management and workers received training on the new policy; this emphasised migrant workers’ responsibility to bring ID documents to work to ensure the factory, and the workers, met the requirements of unannounced government labour inspections.”
Perhaps the difficulty is in measurement. Companies I have spoken to struggle to find meaningful key performance indicators (KPIs) to include in their modern slavery statements. The Business & Human Rights Resource Centre’s review of statements produced by the FTSE 100 had a similar finding. When measuring the “effectiveness” of modern slavery statements (which includes assessment of company KPIs) the average score they gave companies was 17%.
The solution to this problem of demonstrating effectiveness, I believe, is a simple one. It is to focus on the one KPI that ultimately matters: are there fewer people working in situations of forced labour or subjected to human trafficking? It is not always easy to demonstrate this, but stories like the ones M&S discloses are a significant step towards this.
Measuring instances of problematic behaviour found will help focus companies on taking effective action to tackle modern slavery - and this is specifically why we have dedicated our initiative to this.
I believe that best practice for companies is finding modern slavery in the supply chain, taking appropriate steps of remediation and demonstrating how they are preventing modern slavery taking place in future. In short: find it, fix it and prevent it.
The Modern Slavery Act’s requirement for transparency in the supply chain has put modern slavery on the agenda for many companies and their boards, but it is time we see an increase in effective action.