Modern slavery is the process of holding a person in forced service. The UK’s Modern Slavery Act (2015) identifies this as being comprised of four, related areas: slavery, servitude, forced compulsory labour and human trafficking.

The most recent estimate from the International Labour Organization is that 24.9 million people in the world are in a condition of forced labour. Many of these people appear in the supply chains of the companies listed on the capital markets. Research conducted with leading UK brands found that 77% of companies, when interviewed anonymously, thought it likely that modern slavery occurred in their supply chains. Evidence, collected by charities and academics, would suggest that this is likely to be far more widespread. 

Labour can be exploited in a number of ways but one particularly common method, accounting for about half of the 24.9 million mentioned above, is through debt bondage. This situation arises when workers are exploited and subject to extremely poor labour conditions because they must repay a debt. Migrant workers are extremely vulnerable through the payment of recruitment fees, a predominant practice in the ‘economic south’, to access employment.

of companies, when interviewed anonymously, thought it likely that modern slavery occurred in their supply chains
Hult International Business School and the Ethical Trading Initiative

A lack of effective action

CCLA has conducted previous engagement on modern slavery around the transparency statements mandated by the UK’s Modern Slavery Act 2015. Full details of that can be found in our report on that engagement.

The Modern Slavery Act 2015 has motivated companies in the UK into action but there is still much to be done. During our previous engagement work, and after reviewing various reports, we have seen many company statements that prioritise compliance with the basic legal requirements in the legislation but are limited in their scope and effectiveness. 

Companies we 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%.