Introduction
On 25 September 2020 a report on the independent investigation of poor work practices of Boohoo’s suppliers in Leicester was published. It is likely to result in many fashion businesses looking again at their compliance with the Modern Slavery Act and ensuring compliance by those in their supply chains – factories, suppliers, agents, distributors, franchisees, outsourcers and subcontractors.
Today we provide a compliance checklist as a starting point for all involved in the business of fashion.
The business
The Modern Slavery Act (“the Act”) requires a business with a global group turnover of £36 million or more to make an annual slavery and human trafficking statement. As such:
- Does your business meet the global group turnover threshold of £36m?
- If not:
- is your business part of the supply chain of a business which does meet the 36m threshold?
- alternatively will your business be making a voluntary statement?
The supply chain
If you meet the £36m threshold you should assess your business operating model and whether it involves:
- agents
- distributors
- franchisee
- outsourcers, or
- subcontractors.
Separately, are there any particular issues with suppliers, trade unions or other bodies representing workers that should be disclosed in the annual statement?
Policies
The primary objective of your anti-slavery and human trafficking policy should be to try to prevent slavery and human trafficking in your business and your supply chain.
As such:
- Does your business have a policy on modern slavery and human trafficking?
- Is there a procurement policy or supplier code of conduct that should be referred to in the statement?
- Does the policy set out minimum labour standards which are expected of the business and its suppliers and are these reflective of industry standards?
- Does the business take account of fair full labour and legal costs so as to reduce incentives for the use of cheaper slave or bonded labour in its supply chain?
- Does the business incorporate its anti-slavery and human trafficking policy into its contractual and other business processes?
- Are all suppliers or only tier 1 suppliers required to contractually comply with this policy?
- If the business finds that a supplier is not complying, what are the consequences?
- What measure does the business take to safeguard workers if modern slavery and forced labour are found, and protect them from further victimisation or vulnerability?
Whistleblowing
Does your business have a whistleblowing policy? If so:
- are there procedures in place to assist reporting?
- does your business protect whistleblowers?
Management
It is important that the manager who is responsible for ensuring compliance with your slavery and human trafficking policy is rapidly identifiable by everyone in the business.
This individual should be responsible for:
- managing the risk of modern slavery in the business and its supply chain
- investigations, and
- ensuring the meeting of basic labour standards.
Does the business ensure that this individual is suitably resourced and financially incentivised?
How does management deal with policy breaches? Does the compliance programme ensure that next steps are identified?
Controlling the risk
You must ensure that due diligence is undertaken to identify risk areas and activities, properly consider those risks, and then manage those risks going forwards.
Have you determined:
- To undertake risk assessments and have action plans in place for when a risk is identified?
- When and how risk assessments are to be undertaken?
- The areas of the world your supply chain passes through? Given the fact that the fashion industry is viewed as a high risk sector, you should carefully review any country where legislation and regulation is lacking so as to avoid increasing your risk profile.
- To regularly look closely at the plans and policies your factories have in place, and whether these are in fact implemented by those who work there?
- How you choose brand collaborators and how you assess their compliance? Often matters such as policies can be overlooked.
- The contractual obligations of your supply chain partners? It is common to see a modern slavery and human trafficking policy referenced in, for example, agency, distribution, franchising and sub-contract agreements, but often followed with words such as “as provided by the brand from time to time”. Including this wording can prevent a delay in the signing of the agreement whilst you seek to put in place a new policy. However, if you then do not send out the policy (and any updates “from time to time”!), it can be difficult to explain to the supply chain partner what is expected of them. You should be comfortable and confident with the fact that your supply chain partners are often viewed as an extension of your brand!
Keeping track of your compliance
You should seek to create a set of standards against which you regularly measure your business and your supply chain’s performance. It is not enough to just put policies in place. Often what is perceived as a risk one month can change a few months later.
As such:
- Do you keep your standards under review?
- Have you set up a team to test and question these standards on a regular basis?
Measuring your performance and reviewing the standards regularly helps to monitor risk.
- Will you be seeking to ensure that your supply chain partners are auditing their risk in the same way?
- Are you open to feedback from not just your employees and supply chain partners, but also the public? This can add an extra layer to your monitoring activities.
- Is there a designated way for someone to contact you?
Educating and training your workforce
It is not enough for only management to be involved in the control of the risk of modern slavery and human trafficking. The more aware and educated your workforce are in being able to spot risks and issues, the better for your overall compliance prospects.
As such:
- Have you assessed what training is available, and where necessary, refreshed it?
- Do you have a record of who has undertaken the training, and when?
We help fashion businesses comply with the Modern Slavery Act
Compliance with the Modern Slavery Act is compulsory for businesses with £36m or more in global turnover and that compliance therefore extends to those in their supply chains. If you would like help in setting up or reviewing the effectiveness of your Modern Slavery Act policies and systems for compliance, please contact us.
