Who am I ? What do we do? What are key takeaways from today?
Some of our clients
Global business and supply chains • • • •
•
Global business powerful and complex supply chains Liberalization of trade Human rights traditionally protected by the state With transformed economic landscape many governments unwilling to enforce domestic laws in relation business and human rights Companies started establishing CSR policies and practices
Landscape changes • The landscape of business and human rights is changing:
More regulation Reputation Risk management Business costs squeezed Supply chain management –mega trend Mainstream investors recognising ESG as critical differentiators
In the news • Source Amnesty
Increase in slavery numbers • Global Slavery Index • 2016 report • 45.8 million people are enslaved
Global construction picture- a snapshot • Construction a bipolar industry (Chris Blythe CEO, CIOB) • High profile abuses in Qatar or tragedy such as Rhana Plaza • Labour exploitation second most common form of slavery in UK • Unskilled migrants exposed to higher risks and vulnerable to exploitation
Modern Slavery today • Still takes the form of buying and selling people • Many think slavery is a relic of history. Shockingly chattel slavery still prevails in Mauritania • TIP report states 150 billion dollars in profit from slavery
68%
• In 2013, 1,746 victims of trafficking identified through the NCP in UK. Number on the rise • HM Government recently published first estimate of potential victims in the UK – estimated 10,000-13,000 victims
of enslaved people subject to forced labour - out of 30 million
Slavery Map 2014
The business of modern slavery • People trafficking is about one thing: Money • One of world’s largest international crime industries • Estimated profit from trafficking $150 billion dollars
Poll Question • Do you know if your company has to comply with the Modern Slavery Act?
How are companies affected by modern day slavery? • Directly – use of company’s products/facilities/services • Indirectly – personal supplied by 3rd party agents • By association • Through their business partnerships • By investments
Why should companies know about modern slavery? • Companies should understand how their corporate activity and business operations affect human rights and vice versa to:
Manage risk Brand protection Customer satisfaction Building resilient supply chains
Risk management? • Companies at risk to human trafficking – in organisation and supply chains • Particular risks where supply chain has multiple tiers, rely on migrant workers • Examples of risks are: – Legal – Reputational – Operational
Construction Industry • IN 2013 6.5% of employees in UK in construction industry • Estimated 13000 slaves in the UK
• Sub-contracting chains are lengthy and complex • Lack of undertaking basic due diligence • Very little proactive monitoring
Make up of victims
Understanding the regulatory landscape in the UK and EU • Companies Act 2006 - Strategic Reporting Regulations 2013 • Modern Slavery Act 2015 – Section 54 • 2014 EU Directive on disclosure of non-financial and diversity information by commercial undertakings • EU proposal for a regulation on conflict minerals - supply chain due diligence (on-going)
Context of the Modern Slavery Act • Companies Act 2006 requirements for listed companies to disclose on ‘human rights’ • The UN Guiding Principles on Business and Human Rights • Social Justice report • Consultation and hard lobbying! I was there!
The Modern Slavery Act • • • •
•
•
UK Modern Slavery Act - in force March 2015 s54 Transparency in Supply Chains ‘Commercial organisation’ producing goods and services Global turnover of £36 million to comply with the disclosure requirements Companies have to produce a ‘slavery and human trafficking statement’ Guidance – issued October 2015
Definition in the Act • Refers to ‘slavery and human trafficking’ • No specific definition • Reference to other legislation • In determining whether a person is being held in slavery or servitude or required to perform forced or compulsory labour, regard can be had to all the circumstances (section 1)
Definitions
Modern slavery: Ownership exercised over a person
Human trafficking: Arranging or facilitation of the travel of another person with view to exploiting them
Forced labour: Work or service taken from a person under menace of a penalty, person not offered himself voluntarily
Debt bondage: Persons pledge of their labor or services as security for repayment of debt
Key elements in the Act • • • • • •
Definitions What the slavery statement should contain Who signs of the statement Reporting deadlines Parent and subsidiaries Enforcement
Poll Question • Do you know what a slavery and human trafficking statement is?
What information should go into the statement? • The statement MAY include the following: the organisation’s structure, its business and supply chains the organisation’s policies in relation to slavery and human trafficking the organisation’s due diligence process in relation to slavery and human trafficking in its business AND supply chains the part of the organisation’s business and supply chains where there is a risk of slavery and human trafficking taking place, and steps that the organisation has taken to assess and manage that risk
The Slavery Statement • A statement : is required for each financial year must contain steps that organisation has taken to prevent slavery in their supply chain AND their own organisation must be signed by someone senior in the organisation must be published on the organisations website in a prominent place
Who approves or signs off? • No personal directors liabiliy unlike in Companies Act reporting obligations • Statement must be approved by board of directors (or equivalent management body) and signed by a director • Limited liability partnerships, limited partnerships have requirements on partners or members
Enforcement • For main offences penalties include: Maximum life imprisonment (conviction or indictment) or 12 years imprisonment or a fine or both Confiscation of assets and slavery trafficking reparation orders • To enforce compliance obligations: Secretary of State can bring civil proceedings in High Court for an injunction ? Will other sanctions be introduced later?
Companies approach • Prevention: for example: policy engagement, codes of conduct, training
Procurement • Suppliers-do we know the risks? • Challenges? • Consider how to prevent modern day slavery with suppliers and business partners • Are there issues such as price, delivery times that may impact on human rights standards or encourage slavery?
Poll question • Do you think the Modern Slavery Act requirements will help business tackle slavery and human trafficking in their supply chains?
Contracts • Legal and Commercial • Should there be a code to reference ‘ethical conduct’ and anti –corruption to what extent can these and any other provisions relating to modern slavery be monitored?
• Should there be a requirement to refrain from all forms of forced or bonded labour?
Beyond compliance • Tick boxing • What about leadership? Ethical codes • Integration into business strategies • Reputational gain • Shareholder engagement • Use of ISO and British standards
What should companies be doing now? • • • •
Work out if they need to comply Decide their approach Look at where the company operates Does the company have any policies in place addressing human rights and human trafficking? • Gap analysis • Map of impacts
Review of supply chains • Businesses should review their supply chains and suppliers • Involves assessing risks across the business • Performing due diligence with suppliers • Developing appropriate policies and procedures
A cautionary note • Statement is public facing: consumers, investors, shareholders
Looking ahead • Key actions from today? What do we need to consider in more depth? List of actions Timescale to undertake next steps?
Get in touch! • CLT envirolaw- niche, use legal understanding to ensure compliance and develop best practice • Bespoke training and e-learning • Flexible, robust, friendly advice • Bespoke interactive training workshop -31 August in London. Sign up now.
