On 28 August 1833 the UK abolished slavery. Yet, over 180 years later the government has felt compelled to take further action with the introduction of the UK Modern Slavery Act on 29 October.
Slavery is a $150bn per year industry and within the UK alone 8,300 people are estimated to be enslaved. Given that 78% of slaves are labour slaves, the Act will have an impact on the supply chains of many retailers and manufacturers.
Retailers and producers have been working to remove unethical practices from their supply chains for years, and slavery is just one on a growing list that also includes bribery and corruption, pollution, unsustainable farming, and child labour. Unfortunately the further down the supply chain you go, the less likely it is that small and distant farmers, manufacturers and logistics providers have the resources to offer a squeaky clean bill of health.
This new law asks companies to report either the steps they have taken to minimise slavery and human trafficking directly within their own businesses and supply chains, or to disclose that they have not taken any steps.
This seems a relatively benign requirement on the face of it, and the government has so far only issued guidance, with no actual standards for businesses to adhere to. Yet, when you consider the risks of finding slavery within the chain, simply doing the minimum is not enough. If you gain a reputation for selling products tainted by unethical practices, consumers may desert or boycott you, graduates may reconsider working for you, and investors could take their money elsewhere.
The obvious step for those at the top of the food chain is to demand that all your suppliers adhere to the new law, and prove that their sources do so. But this is not as easy as it sounds, particularly when it comes to those small, distant suppliers I mentioned previously. Another option is to refuse to work with any supplier that cannot comply. But depending on where the supplier fits within the chain, this could potentially deprive you of a significant proportion of your supply options.
Importantly the spirit of the Act is to minimise slavery as far as possible. This means, companies at the top of the food chain will need to take the initiative and work with suppliers to ensure they adopt the kinds of controls that have become commonplace in major grocery companies.
By acting as educators, training supplier staff, establishing codes of conduct, and helping them maintain appropriate records for audits, you can lay down the gauntlet for responsible corporate behaviour throughout your supply chain, and at the same time add a further layer of sustainability to your business.
We are already seeing this working in practice, with the multi-stakeholder Stronger Together initiative, which provides companies with guidance and a checklist they can use to review their own practices, and a platform for them to upload their statements once they have done so.
Modern slavery will not be eradicated overnight - it will be a long term journey. However, there is a real opportunity for those at the top of the supply chain to set an example and take responsibility for the direction of travel.
Liz Claydon is KPMG’s UK head of consumer markets
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