Manufacturers urged to review supply chain traceability

 

Aon has urged food manufacturing companies to review their supply chain traceability following the first reporting deadline under the new Modern Slavery Act.

A first wave of businesses which fall within the scope of the act (those with annual turnover exceeding £36 million, whose most recent year of account ended on 31 March 2016) needed to have published a statement of their policies in relation to the act by 30 September.

The obligation to publish an anti slavery statement is mandatory, however the content of this statement is not, prompting some observers to label the act ‘toothless’. Nevertheless, Grant Foster, managing director at Aon Global Risk Consulting, says this should not dictate a company’s response.

“There are few hard sanctions within the act and it is unprescriptive to say the least. However, at its heart, the Modern Slavery Act represents a rallying call for any UK business over a certain size, particularly those with a complex supply chain, to show that they take this risk seriously,” he says.

“The government is asking for businesses to refocus their procurement efforts and not accept any products or services which may have been ‘adulterated’ by the influence of modern slavery or human trafficking anywhere along the supply chain.”

Grant admits this may be a challenge for some manufacturers, but says that supply chain traceability audits are a sensible first step. “You need to look at where there is money and opportunity. Traceability audits focus on ‘following the money’ and identifying where the most money could be made by adulterating a product. Businesses with supply chains that stretch across the globe could find themselves exposed.

Meanwhile, the lack of sanctions and penalties is likely to raise questions about the efficacy of the legislation, continues Foster: “There is clearly a reputational risk attached to not fulfilling a legal duty by publishing an anti slavery statement. In addition, there is a new private members bill currently passing through the House of Lords, which proposes new sanctions such as prohibiting those found in breach from joining any public procurement exercise. Frankly it is not inconceivable that one day a criminal charge could be brought against a company and its directors for ‘knowingly associating with corrupt labour practices’.”

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