[Compliance & Ethics Professional Magazine] Modern Slavery and the Private Sector: Sequencing of Efforts by Matt Friedman

Companies that examine the issue of modern slavery as a business risk often go through an introspective journey that provides new, meaningful insights into their supply chains.

•   With new legislation, potential lawsuits, increased media coverage, and campaigns to name and shame businesses, the potential business risk associated with modern slavery cannot be ignored.
•   Companies that examine the issue of modern slavery as a business risk often go through an introspective journey that provides new, meaningful insights into their supply chains.
•   When a business takes on this issue and includes their workforce in the process, there is often a great deal of employee pride—their employees recognize and appreciate that their leadership cares.
•   A lot of useful information is already out there that will not force companies to choose between what is right, what is sustainable, and what is profitable.
•   Doing good and being profitable are not mutually exclusive; they can be complementary.

The issue of modern slavery continues to be a very sensitive topic within the private sector. Because this issue is new and often hard to address within a business context, many companies don’t know how to begin the process of engaging. With a range of new legislation related to modern slavery, increasing numbers of lawsuits against corporations, and wider media attention, ignoring this issue is no longer an option.

Addressing the business risk

For a number of years, the only private sector regulations addressing modern slavery were non-binding guidelines issued by the United Nations and other international organizations.

Recently, however, the legal landscape has changed with new domestic laws coming into force that address companies’ modern slavery accountability. So, let’s look at some of the key features of these regulations. The state of California in the United States passed the first piece of legislation to engage the private sector on modern slavery. The California Transparency in Supply Chains Act, which came into effect in 2012, requires retailers and manufacturers who do business in California and have annual worldwide revenues exceeding $100 million to disclose their efforts to eradicate slavery and human trafficking from their supply chains. The Act requires that the disclosure be made on company websites, giving consumers the power of information.

A second, more comprehensive piece of legislation is the UK Modern Slavery Act, section 54, which came into force October 2015.2 It requires any “commercial organizations” that provide goods or services, do business in the United Kingdom, and have worldwide turnover of at least £36 million to publish a yearly statement describing the steps they are taking to ensure that slavery is not taking place in their supply chains or businesses. This statement must be approved by the board and signed by a director.

Read the rest of the article here: Modern slavery and the private sector: Sequencing of efforts