Thursday, 14 January 2016

Modern Slavery Act 2015 - implications for procurement teams

This article is a short analysis of the Modern Slavery Act 2015. For further information, I have included some useful links at the bottom of the post.

Background

Last year, the UK introduced the Modern Slavery Act. It consolidates previous legislation and introduces new measures to combat slavery and human trafficking.

While the Act is generally seen as a positive step, some commentators argue that the legislation does not go far enough.
CC Image courtesy of DeptfordJon on Flickr

Who is affected?

The Act covers a lot of ground. From the rules on which vehicles can be confiscated from convicted traffickers, to the role of the anti-slavery commissioner.

I would like to focus on the implications for procurement organisations.

Procurement professionals

The most relevant part of the Act for procurement professionals is Part 6 - Transparency in supply chains.

This legislation will affect you if your organisation has a turnover greater than £36m. It means your company must make a public statement on how it ensures that slavery and human trafficking are not taking place in the organisation or its supply chains.

Public statement

Ensuring your company's statement is credible requires a lot of work.

The Act does allow for a statement that just says the organisation has not taken steps to address the issue. However, it is clear that this would not be ideal from a PR perspective.

The procurement team will often be responsible for implementing the measures which will be referenced in the statement.
An organisation’s slavery and human trafficking statement may include information about:

(a) the organisation’s structure, its business and its supply chains;
(b) its policies in relation to slavery and human trafficking;
(c) its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
(d) the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
(e) its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate;
(f) the training about slavery and human trafficking available to its staff.

source: http://www.legislation.gov.uk/ukpga/2015/30/part/6/enacted

Taking action

The Chartered Institute of Procurement & Supply (CIPS) describe three areas where the procurement team can take action.

  • Putting into place POLICIES to prevent, detect and eradicate modern slavery within their own operations and the operations of suppliers and business partners...
  • Establishing PROCESSES to identify vulnerabilities
  • PLANNING for situations where corrective action is needed

Practical Steps

The Act has come up several times in recent conversations with Market Dojo customers. One step they are considering is surveying their suppliers to ensure that they have suitable policies. This can be a daunting task when your suppliers number in the hundreds or thousands. A way to make this process less arduous is to use a Supplier Onboarding solution such as SIM Dojo. This allows you to ask your suppliers to confirm they comply with your policies, and provides an auditable record that they have done so.

Conclusion

The Modern Slavery Act introduces laws to combat slavery and human trafficking. This includes requirements which will affect procurement professionals working for UK companies. It is an additional reason to ensure your organisation has an ethical supply chain. In turn, this is an opportunity for companies and procurement professionals to make a positive difference in the world.

Other resources

CIPS Guide
Government Guidance on Transparency in Supply chains
The Modern Slavery Act 2015

Finally, please do get in touch if you would like to find out more about how Market Dojo can help.

Nicholas Martin
nicholas.martin@marketdojo.com
44 (0) 117 230 9993 


About: Market Dojo provides accessible eSourcing software. Find out more at www.marketdojo.com

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