Comment: Modern Slavery Act: second year statements

By February last year a number of organisations had published their first statements under the UK’s Modern Slavery Act, nine of which I identified here.

Eager to understand how these nine have followed up in the second year, I returned to their websites to see how they have met the expectation to “build on their statements year on year and for the statements to evolve and improve over time” (see the UK Government's guidance on 'Transparency in Supply Chains etc').

I had some practical questions I wanted to explore:

  1. How are organisations showing progress forward and distinguishing between steps taken in different reporting years?
  2. Are organisations repeating information provided already?
  3. How are organisations archiving and referencing their statements?

Curiously, a year later there were fewer second statements published. In several cases, it is hard to tell exactly because the statements are not dated and contain no indication as to when any of the steps reported were taken.

Of the initial nine, I found four that were definitely second year statements and one that was a probable:

However, finding answers to my practical questions was somewhat disheartening. Flex has republished last year’s statement word for word with an updated link to its latest Global Citizenship Report and two other very minor amends. Minor, Weir and Willis writes that the statement is for their 2016 financial year but the date of the sign off appears to be wrong leaving confusion as to whether they have made any substantive changes or not.

Vinci Construction has published an improved statement with more detail about steps taken, although it has not made clear which steps were taken in different reporting years.

Intel has provided clear updates referencing what happened in 2016 and plans for 2017 but their first statement appears to have been taken down, making it difficult to make year on year comparisons.

The best of the ‘early movers’ seems to be the LUPC – an organisation that does not come under the legal scope of the Modern Slavery Act but which states that “our Board considers that our members’ spend (over £200m annually) through our supply agreements warrants a statement on the risks inherent in our supply chains and the steps we are taking to address them”.

The LUPC has identified five ‘super categories’ of purchasing which help to frame their disclosure statement, describing steps against each of the higher risk areas identified. It also clearly explains how the organisation has moved from year one to year two. For example, a typical sentence is: “In our first statement, we identified the main categories of goods and services that present higher risk of human rights abuses. During 2016, we have advanced our knowledge and understanding of these risks and we are now progressively implementing strategies to address them.”

What this limited dataset seems to show is that the expectation to show progress each year, clearly outlined in the guidance published by the UK Government for companies disclosing under the Act*, is providing some challenges for companies and transparency is suffering as a result. I suspect this amounts to teething problems but it also highlights some of the difficulties that companies are having in working out what steps to take and moving the business forward.

To improve transparency, companies can take the following steps:

  • Date the statement
  • Declare whether it is a first or second statement
  • Archive the first statement and a link back to it (rather than removing or replacing it)
  • Be clear as to what steps have been taken in the relevant financial year

Addressing modern slavery is difficult; what the Act is trying to achieve, among other things, is a common base of knowledge that improves the ability of different organisations to collaborate and to take meaningful action. Adhering to basic standards of reporting practice is an important part of this.

 

 

*It states that “Organisations will need to build on what they are doing year on year” and later on that “We expect organisations to build on their statements year on year and for the statements to evolve and improve over time”.

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