A fifth of businesses in the UK are not even aware of the new rules designed to stamp out modern slavery in supply chains, let alone prepared to deal with them, according to new research.
From 1 April, all businesses with a turnover of more than £36m will be required to report annually on the steps they have taken to ensure modern slavery is not taking place in their business or supply chains. But a study by the Chartered Institute of Procurement & Supply (CIPS) found that those affected by the new rules are "woefully unprepared".
More than a third (38%) were unable to say when their first modern slavery report will be due, 40% have not read a single piece of government guidance, 27% said they do not fully understand what their business has to do, and more than half (52%) said they wouldn't know what to do if they did find modern slavery in their supply chain.
The Modern Slavery Act aims to prevent the use of forced labour in the UK economy by encouraging businesses to take a greater interest in the practices of their suppliers at home and abroad. However, the impact of the Act appears to be limited so far with only a very small percentage of British businesses proactively taking steps to tackle the issue.
Just a third of supply chain managers claim to have mapped their suppliers to understand the potential risks and exposure to modern slavery, while only 41% have ensured all workers in the UK in their supply chain receive the minimum wage and apply robust immigration checks. Less than 28% of businesses in this group claim to have provided training to employees and local suppliers on modern slavery, despite a quarter of the procurement professionals surveyed citing lack of skills as the main obstacle in dealing with the issue.
David Noble, Group CEO of the Chartered Institute of Procurement & Supply (CIPS) said: “The Modern Slavery reporting requirement means that businesses can no longer afford to ignore slavery issues, morally and commercially. If they are unable to convincingly outline the steps they are taking to eradicate human exploitation from their supply chain, they risk damaging both their reputation and their bottom line.
“The Act means it’s no longer acceptable for businesses to ignore what they can’t see. It’s true that the modern supply chain is becoming longer and more complicated, but it is possible to take definite steps to put a process in place to achieve the level of transparency and traceability to ensure that their procurement practices do not contribute to modern slavery at any stage in their supply chains."