Your quick guide to Modern Slavery Reporting during Covid-19

Your quick guide to Modern Slavery Reporting during Covid-19
27th May 2020 Aran Spivey
Aran Spivey
In Blog

The UK Government has announced that firms currently working on their annual Modern Slavery Statement have a six-month extension to complete this activity, given the uncertain and testing context of the coronavirus. In guidance published in late April, the Government outlined the ability to delay publishing, alongside other key considerations for business in relation to modern slavery and Covid-19.

The guidance accepts that some measures outlined in previous companies’ statements may have been delayed, with response to the virus taking precedence. It further asks that companies requiring a delay must note this in their published statement. For many firms operating with reduced workforces, and access to the necessary detail on actions taken to address modern slavery risk, this will be a welcome announcement.

In light of the virus, the Government has suggested a few areas of specific focus in terms of reporting content:

  • The health and safety of workers
  • Supporting suppliers
  • Grievance procedures
  • Recruitment
  • Emerging risks

The extension has raised key questions from number of our clients and partners, ranging from the logistics of reporting – such as where it sits within an organisation, and who has the necessary knowledge – to, importantly, how Covid-19 should be factored in. This short guide seeks to address some of these pressing questions around the impact of Covid-19 and modern slavery statement writing.

Should we delay our reporting?

For many firms, modern slavery reporting is aligned to other annual reporting cycles. This means that many firms will have a completed, or near completed, statement ready to submit, given the recent end of the financial year. Whilst the government is not demanding immediate detail on actions around Covid-19, it would show understanding of the context to at least show awareness of the impact of Covid-19 in the introductory section of the statement. This will help demonstrate that the modern slavery cycle is not a siloed process, and that material business concerns are factored into your company’s approach.

If there is a substantial amount of the statement still to complete, businesses would be wise to carefully think about how they can meaningfully acknowledge the specific focus areas listed by the government, in order to show that the delay has allowed for more robust thinking about the impacts of Covid-19 on its supply chain and operations in terms of modern slavery risk. At a base level, it should recognise that the delay in the statement has been stipulated by government. However, taking up this offer of postponement should be approached with caution. Civil society and other stakeholders will expect that companies see Covid-19 as a critical reason for firms to proactively address the risks within their supply chain and operations, not an excuse to put this important exercise off.

Who should be writing the statement?

The current crisis has given rise to gaps in workforces, with many key individuals unable to feed into the reporting process. This has shown the importance of corporate oversight of modern slavery reporting and how critical it is to have senior individuals with well-rounded perspectives on the activities of the business.

Moving forwards, one way that information sharing can be improved is through a more robust approach to logging activities, and treating modern slavery reporting as an ongoing, iterative process. Having an internal working group, and/or a systematic way of tracking plans, progress, and achievements related to modern slavery, has been shown to be an incredibly useful way of ensuring nothing slips through the cracks. It spreads the task of reporting, ensures that meaningful work can occur in spite of resource and staffing changes, and prevents the siloing of information.

If our statement is to refer to the impacts of Covid-19, what should we be considering?

The Government’s suggested disclosures are worth bearing in mind when considering how to report on Covid-19, as addressing them shows engagement and understanding with the expectations of the UK Modern Slavery Act. The Government’s ‘issues to consider’ are summarised below:

  • The health and safety of workers
    • How health and safety measures have been implemented throughout your supply chain, including social distancing, use of PPE, and sick pay. Companies will be expected to show how they engaged with their entire supply chain on this, not just their immediate operations.
  • Supporting suppliers
    • Certain sectors have been heavily impacted by the virus, with the impacts on workers’ livelihoods significant. Businesses should be able to show how they’ve supported their suppliers through this time, including by minimizing cancelled orders, paying invoices on time and in full, and working to remunerate workers fairly and as far as possible. In particular, the fashion sector has seen this issue come to the fore, but public-facing brands of all kinds will face reputational hits for not addressing the impacts on their suppliers.
  • Grievance procedures
    • The proliferation of whistleblowing processes and robust grievance procedures should not be slowed in the wake of coronavirus. Procedures which empower workers and affected communities should remain resourced and transparent. Access to independent resolution services are vital, and corporates should seek to ensure that these remain accessible.
  • Recruitment
    • Precarious and underpaid work has been one of the standout narratives of the pandemic, with the role of essential workers gaining prominence. As the economy begins to rebuild, firms should maintain rigorous procedures around recruitment and employment standards. Agency labour can be one particular risk, where outsourced procedures can fail to meet important standards. Some sectors and industries, where there is a particularly immediate need for labour, must be wary of exploitative third parties seeking to profit from the global crisis.
  • Emerging risks
    • The pandemic has highlighted the importance of risk assessments and that business leaders must ensure that there are lessons learnt. Modern slavery risk is already expected to be formally reassessed year on year, as per the annual statement writing process, but Covid-19 has demonstrated that this process must be more dynamic. The interconnectivity of modern slavery with many global issues we face means that risk assessments must be both proactive and thorough. The onus lies on business to step up to understand how these kind events can impact their entire supply chains.

Sancroft supports corporates and investors on modern slavery reporting and understanding the wider field of business and human rights. For further information, reach out to Aran Spivey at aran.spivey@sancroft.com.

 

For full detail on the Government guidance, please see: https://www.gov.uk/government/publications/coronavirus-covid-19-reporting-modern-slavery-for-businesses/modern-slavery-reporting-during-the-coronavirus-covid-19-pandemic