Modern Day Slavery Act 2015 – how will it impact the food and beverage industry and what action can be taken?
Businesses are likely to be under increased pressure to clamp down on forced labour in their supply chains once new rules come into play later this year. What is the impact and more importantly what actions can be taken?
Large businesses across multiple sectors are required to publish a statement on what, if any, anti-slavery and human trafficking precautions they have in place.
Any lack of action will reflect poorly on the company and brand. Now is the time for business leaders to ensure that their company has active policies in this area to guard against forced or compulsory labour at any point in their supply chain.
But which sectors are most at risk, and what are the implications of these new obligations for large businesses with complex and international operations?
Who is the most at risk?
Intricate chains of contracting and subcontracting, both within the UK and abroad, mean many companies can be unaware of – or deny knowledge of – the conditions under which their goods are produced. Nevertheless, this new legislation will now place a spotlight on how larger companies monitor their supply chain, not just their immediate suppliers, but along the entire route.
Until now, most supply chain audits have centred around ensuring the quality and compliance of the product. In the cut-throat world of global commerce where price is key, few companies have taken the time to investigate their supply chains from a human rights perspective unless specific sustainability or ethical claims have been made for the product, such as Fairtrade.
The area of food production and processing, where turnover is usually high, profit margins are increasingly squeezed and supply chains criss-cross the globe, is particularly at risk. This particularly affects those taking supplies from jurisdictions where the level of labour protection is lower than the UK, from coffee and cocoa workers in South America to rice and tea pickers in east Asia.
What action can be taken?
To demonstrate that the business is taking effective steps to ensure its supply chains are free from modern slavery it is important to have a clear policy, including codes of conduct or contractual provisions which are communicated down the supply chain. However, a clear policy alone may not be enough to ensure supply chains are free from modern slavery. To tackle the problem, businesses must first understand who is in their supply chain and therefore where it is most vulnerable.
The key is understanding your supply chains, and businesses should ask themselves how much they really know about exactly where their raw materials come from, and what the labour arrangements are beyond their immediate suppliers. Once the business understands where it is most vulnerable, effective controls can be put in place to reduce the risk.
Usually a combination of approaches, working collaboratively with suppliers are most effective. This may include the use of auditing, voluntary standards and working with suppliers to increase their capacity to identify and tackle the problem.
The key is understanding your supply chains, and businesses should ask themselves how much they really know about exactly where their raw materials come from, and what the labour arrangements are beyond their immediate suppliers.
