The Modern Slavery Bill: A Step in the Right Direction

While looking for modern slavery is certainly not an easy task and there is still more to do in our own supply chains, it is something that all big companies can and must do.
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If you thought that slavery ended with the demise of the trans-Atlantic trade, then think again. The Global Slavery Index estimates that 36 million people are living in modern slavery today -- completely controlled by others for misuse and profit.As business leaders, we must address this.

Many of these modern slaves are to be found in the supply chains of western corporations; our society profits -- albeit inadvertently -- from their suffering. The International Labour Organization estimates that $150 billion of illegal profits are generated each year through the exploitation of enslaved people worldwide.

This is a serious business. A seriously awful business. Our moral obligation is to eliminate slavery in our supply chains. Through purchasing decisions for materials, products and services, businesses have enormous power to drive change in the practices of their suppliers. Furthermore, consumers are demanding that companies address this crime. A survey released recently revealed that the vast majority of consumers would stop buying a product if its manufacture involved modern slavery and would be willing to pay up to 10 percent to ensure products were produced without exploiting workers.

The overwhelming majority of companies have no desire to exploit people. The problem is that many do not know how to implement anti-slavery management systems. They are often reticent to look too closely at their supply chains for fear that if slavery is discovered, they will suffer reputational consequences. This means that governments must help business by creating a strong framework for corporate behavior in modern slavery governance.

This week, the British Parliament passed the Modern Slavery Bill. We welcome the focus on the role of business, and the new obligations on companies to report the steps they are taking to tackle human trafficking and slavery in their supply chains. Importantly, these disclosures are to be signed by a company director, creating clear accountability. Disappointingly, companies can still comply with disclosure requirements through reporting they have taken no steps at all.

The British legislation is partly modelled on the California Transparency in Supply Chains Act, which doesn't require companies to take concrete action, simply disclose any efforts to eradicate slavery. While a step in the right direction, disclosures in California have not forced companies to improve their practices. This is an opportunity for Britain to lead the world in anti-slavery legislation yet not remotely harm a company's efficiency, but it needs the government to go further. The law should require companies with £1 billion turnover in high risk industries such as manufacturing, shipping, agriculture and construction to not only disclose their efforts but also take action to end slavery through specific anti-slavery risk management and due diligence and have these verified by a third party auditor.

We estimate these measures would only affect around 120 UK-based companies and about 600 non-UK companies that sell to businesses and consumers in the UK. Their supply chains are long, with operations and suppliers reaching deep into the global economy and into countries that have the highest prevalence of slavery in the world. The impact of their combined action on reducing slavery would be huge. In the event that authorities discover systemic slavery in company's supply chain which have been ignored, then clearly that company is committing, or at least turning a blind eye to, very serious crimes which at their worst include illegal imprisonment, kidnap, severe exploitation and in many cases, murder or manslaughter. The severity of penalties for corporations should be similar to those that apply to us, if we were knowingly involved in such crimes. The company's license to operate within the UK would be revoked and the Board held criminally liable.

This suggestion is comparable to directors' obligations under anti-bribery and corruption laws and workplace safety. Right now, most businesses would likely discover slavery in their supply chains if they dug deep enough. Tackling this silent abhorrence is not a matter of corporate charity or philanthropy. It must be recognized as fundamental to minimum good corporate governance. Like ensuring safety in the workplace, tackling modern slavery should be a key leadership responsibility.

As business leaders, it is our responsibility not to turn a blind eye or to believe that this issue is too complex to deal with. As Chairmen of two large companies, we have both been confronted by modern slavery in our supply chains. The vulnerability in our supply chains was in labour hire, specifically the recruitment of migrant workers from disadvantaged backgrounds. Social audits revealed that recruiters were stealing wages from workers through excessive recruitment fees and high interest loans, creating a situation of debt bondage. Upon learning of these terrible conditions, we took immediate action so that workers were paid back the fees they were owed, allowing them to earn a proper wage.

While looking for modern slavery is certainly not an easy task and there is still more to do in our own supply chains, it is something that all big companies can and must do. Slavery -- even deep in a company's supply chain -- is as repulsive as past practices of kidnapping people to the Americas to be forced as slaves on plantations. Britain has a historic opportunity to cast a light on this dark corner of our economy. 36 million of the least represented people are hoping that the UK Parliament acts decisively.

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