Modern slavery: effective compliance and supply chain management

modern-slavery-lexisnexis-advisory-board-inhouse-lawyerBusinesses are facing a huge global challenge to comply with the obligations introduced by the Modern Slavery Act 2015. On 6th October 2016, the LexisNexis In-house Advisory Board met to discuss modern slavery and its relationship to supply chain management, including the importance of risk assessment and due diligence.

The session was facilitated by Clive Davies, Senior Counsel at Fujitsu Services, and Colleen Theron, a modern slavery expert and environmental, business and human rights lawyer and consultant. It opened with an introduction to the Modern Slavery Act 2015 and supply chains. Supply chains were identified as incredibly difficult to manage due to their potential size – when faced with compliance, companies may panic as they simply don’t know where to start.

Slavery and human trafficking statements

The Modern Slavery Act requires certain organisations to develop a statement each year. There is concern that these are likely to be a gloss of what policies are in place without in-depth risk assessment. It isn’t just about producing the statement, it also involves appropriate engagement, training and good reporting.

Assessing risk

Clive Davies shared with the Board how Fujitsu prepared a global risk analysis to geographically map where their suppliers were and to see how those locations ranked in the Global Slavery Index. Without such a process, companies don’t know where their products are and therefore cannot understand the risk.

Due diligence

The approach to due diligence that a company takes should always be determined by risk analysis. The Board discussed several key questions:

  • How far down the supply chain do companies need to look?
  • How can companies shorten their supply chain?
  • What do companies need to do when they’re the focus of due diligence?

Whistleblowing

Whistleblowing presents challenges. It may not be appropriate in the modern slavery context because there is a real fear for the victims. Some organisations are working closely with NGOs in the area and implementing whistleblowing processes through those NGOs.

Engaging the business

Modern slavery compliance requires the buy-in of the whole business. To engage the business, the approach should highlight how compliance helps both people and the company’s reputation. It needs to be integral to the values of a company in the same way that corporate social responsibility is.

Conclusions

  • There needs to be a much bigger collaboration between businesses, NGOs and the government.
  • Clauses and complex questions are starting to become more common and companies therefore need to be completely on top of their modern slavery statement and risk analysis.
  • Modern slavery has not yet reached a wide state of recognition. It will take a course of cases before it gains enough momentum to be taken seriously.
  • There is a lack of understanding about how the modern slavery obligation sits as a bigger commercial piece and the challenge of compliance is to make it real.

Read a full summary of the LexisNexis In-house Advisory Board meeting here

Filed Under: Analysis

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