Six years of lessons and insights gained from the Modern Slavery Act
Six years ago, the 2015 U.K. Modern Slavery Act entered into force. The Act was the first of its kind; Australia legislating their own in 2018. The laws require companies to proactively investigate and report on modern slavery risk in their own and suppliers’ operations. These reports are bringing large quantities of new data to light.
Like a puzzle, putting all the pieces in the right place is essential to seeing the bigger picture and that is precisely what Walk Free is doing by analysing companies’ modern slavery statements. Their yearly Beyond Compliance report creates a sector-specific picture of modern slavery reporting trends.
We interviewed Katharine Bryant, who is Head of Policy and Programs at Walk Free to get her thoughts on:
- What the impact of Acts have been,
- What insights Walk Free has uncovered,
- How the Acts could be improved,
- Reporting patterns between sectors, and
- Why it’s important to share data.
The Australian and UK Modern Slavery Acts seem pretty groundbreaking; what makes them essential pieces of legislation?
They are — the UK was the first country to enact national legislation in 2015 that requires companies, with an annual turnover over a certain threshold, to report on the actions they are taking to address modern slavery in their direct operations and supply chains. Australia followed suit in 2018. Globally, large companies across all sectors have a huge impact on the world around them. Without legislation to establish basic standards, and respect for human rights, the consequences can be significant.
The Australian and UK Modern Slavery Acts (MSAs) provide the opportunity for companies to be fully transparent about how they are addressing the risk of modern slavery in their direct operations and supply chains. By mapping their supply chains, assessing risk, and disclosing their due diligence and remediation processes, the legislation allows companies to highlight good practice. This disclosure has many audiences — the statements can be used by investors to ask questions of their investees, by government and civil society to hold specific sectors and companies to account, and by consumers to identify how their favourite brands are responding to risk of forced labour. Promoting respect for human rights and labour standards is critically important to build a more sustainable and resilient global economy, which is particularly urgent as the world reacts to current crises, including the COVID-19 pandemic.
What has Walk Free been able to bring to light that we didn’t know before due to the Australian and UK Modern Slavery Acts coming into force?
The Acts have led to the production of thousands of company statements that allow us to analyse how companies are reporting on and responding to modern slavery risks. This analysis has allowed for comparisons between different sectors and legislations, tracking change over time, highlighting promising practice, and identifying gaps in reporting. As a result, we can then form recommendations for a range of stakeholders — including the companies required to report under the legislation, and policy makers who have the power to strengthen it. In our latest report on the garment sector, we were also able to compare companies MSA reporting with factory-level data collected by partner organisations. This is a powerful way of highlighting inconsistencies between what is disclosed by big companies and the reality in their supply chains. For us, strengthening disclosure helps us to share good practice and strengthen action against modern slavery.
What would you say to a government considering enacting its modern slavery act? In other words, how could they improve upon or learn from the existing ones?
Firstly, we’d say do it! We’ve been assessing the statements produced under the UK legislation since 2016, and have included Australia since 2020. Through our assessment of the UK statements, we’ve been able to understand its impact and highlight areas for improvement. The Australian legislation did benefit to some extent from these lessons. For example, one of the criticisms of the UK’s legislation was that there was no centralised registry for company statements, with companies housing these reports on their homepage of their website. This makes identifying who has reported very difficult. Australia sought to remedy this by creating a government-funded repository for modern slavery statements. Steps like this have made the legislation more effective in practice.
While mandatory reporting is a great way to highlight good practice, we’ve seen a shift to Mandatory Human Rights Due Diligence (MHRDD) legislation across Europe. Whereas within the Modern Slavery Act framework companies simply have a duty to report the steps they are taking to prevent modern slavery in supply chains, within MHRDD companies have a duty to conduct due diligence to protect the human rights of workers within their supply chains. Countries should examine the suite of legislative and policy responses available to engage with the private sector on how to prevent the exploitation of workers in their supply chains.
What patterns do we see regarding how different industries have responded to the laws? Are some industries better than others, for example, in what they share?
Since 2019, we’ve released three reports under our Beyond Compliance series. So far, we’ve analysed company statements in the hotel, financial, and garment sectors. Of these, the garment sector had the highest rate of companies complying with their duty to report under the MSAs. This in part may be due to the increased scrutiny of the garment sector that we’ve seen in recent years due to numerous human tragedies and subsequent investigations.
While this is encouraging, we’ve found that companies across all of the sectors we’ve analysed are not taking their obligations under MSAs seriously enough. We’d hope to see companies going beyond compliance, with meaningful efforts to tackle the risks endemic to their particular sector. Yet, we see that significant gaps remain across all sectors. The extent to which legislation can truly hold companies to account and make strides towards eradicating modern slavery in global supply chains is limited while reporting standards remain as they are. Equally, our research raises the question as to the effectiveness of MSA legislation that has no consequence for inadequate reporting standards.
At WikiRate, we like to say “sharing is caring” about opening up data; what would you say to other organizations considering sharing their data?
We agree — sharing is caring! Open data is a really powerful tool. It supports public and government oversight by enabling greater transparency. Additionally, open data encourages collaboration between companies to share good practice and enhances participation. We’d definitely encourage other organisations and companies to share their data and contribute to this movement.
