The UK Government has set the turnover threshold at £36 million for companies that have to report on their supply chain modern slavery. Despite this threshold, the Government is still advising companies with smaller turnovers to analyse their supply chains to ensure they are ‘slavery free’.

Modern slavery is still a major concern in the industry, with only 30% of procurement and supply chain professionals believing their suppliers were compliant with the new legislation.

To assist you in the analysis of your current modern slavery policy and process, answer these five key questions on modern slavery:

1 – Do you ask what your supply chain are doing to combat modern slavery?

Requesting information on how your suppliers and contractors are dealing with modern slavery shouldn’t be limited to new suppliers on their PQQ (Pre-Qualification Questionnaire). You should also be asking your existing contractors and suppliers on an annual basis.

Surprisingly, 71% of supply chain and procurement professionals believe their biggest challenge with modern slavery is ensuring the compliance of existing suppliers, according to The Modern Day Slavery Survey 2017 Report.

2 – Do you monitor if they are doing what they say they are?

Desktop and on-site audits are tools that you should be using to ensure your supply chain is abiding by the claims they are making. These audits should look into claims around modern slavery and find evidence of procedures and policies being adhered to.

As Altius’ Managing Director Gary Plant describes, “Having a clear compliance process for your suppliers and contractors to abide by is essential to ensure compliance within your supply chain, ultimately to reduce your exposure and cut your costs.”

“Whether you’re still working from a spreadsheet to monitor supplier compliance, or you have an automated software system, regular communication with your suppliers can help achieve greater levels of compliance.”

3 – Can you prove due diligence and cover your business if the worst were to happen?

While the importance of supply chain audits has never been underestimated in the industry, supply chain and procurement teams are finding it difficult to find time to conduct them and identify potential supply chain risks – two findings that were highlighted in The Modern Day Slavery Survey 2017 Report.

This time constraint means that some supply chain teams are missing out on issues and not completing auditing documentation on an annual basis as they should. Without the activity and paper trail that clears suppliers and contractors to work with you for another year, you and your company are at serious risk.

4 – Could you save money outsourcing this process?

Of course, auditing your suppliers and contractors on an annual basis is a massive undertaking of time and resource. However, to ensure you negate risk, this is a requirement – especially with the severity you and your company face if you fall foul of the new modern slavery legislation.

To ensure your supply chain is compliant to The Modern Slavery Act and amongst other legislations and certifications, outsourcing your compliance process may be an option. This outsourcing could also save your team valuable time and money that could be better spent elsewhere. See how Altius can help with your supplier and contractor assessments.

5 – Are you able to show transparency to your customers on your processes?

If your target client database is businesses over £36 million, the need to comply and create additional assets to show Modern Slavery Act compliance, is almost a compulsory measure. Businesses will want to see thorough processes and clear documentation that every one of your contractors and suppliers adheres to.

This transparency is not always easy to show when companies still rely on traditional database techniques such as logging contractor information on a spreadsheet. For ultimate clarity in order to pitch and win work from businesses over £36 million turnover, it is certainly worth investing in an online system that logs contractor data easily.

Modern Slavery Report

Not sure how compliant you are to the Modern Slavery Act? See how the rest of the procurement and supply chain industry are dealing with the recent legislation and what their biggest challenges in 2017 will be, in The Modern Day Slavery Survey 2017 Report.

In 2015, the UK Government introduced the Modern Slavery Act, which requires businesses with a turnover of £36 million or over, to release a statement outlining steps they are taking to comply with the new legislation. What many companies miss is that the statement should also reference efforts to check their supply chains too.

This is in response to a global stance to wipe out modern slavery after the International Labour Organization estimated that 30 million people are enslaved today, and the profit generated by this labour is $150 billion annually.

Naming and shaming brands

Speaking on the legislation, Prime Minister Theresa May, said: “By increasing supply chain accountability, more workers will be protected, and consumers will have greater confidence in the goods and services they will buy.”

With businesses being ‘named and shamed’ when preventative measures are not being taken, understandably modern slavery has become a hot topic in recent months, with big brands being checked to ensure they are following the legislation and safeguarding their reputation.

However, research compiled in The Modern Day Slavery Survey 2017 Report has found that 71% of procurement professionals felt they were ill-prepared for the new legislations and struggle to monitor their supply chain due to time pressures.

Improve your ethical footprint

Here at Altius, we can offer you a way to make sure you are not on that list, but, more importantly, with growing spotlight being pointed at all brands to show transparency in their supply chain, we can help you prove that you really care about your corporate ethical footprint, while saving time and money.

As the leading supply chain compliance provider, our award-winning team can help you:

• Identify issues in your supply chain to offer business protection
• Advise on preventative measures you can take to ensure ethical standards
• Spot-check your supply chain to ensure everyone is following your brand policies
• Create a Slavery and Human Trafficking Statement for release
• Train your staff to identify and report issues through Tool Box Talks and information documents

For more information on how we can help you really care about your corporate ethical footprint, speak to our team today for a free supply chain health check, or complete your own health check below.

The Modern Slavery Act, introduced into legislation in 2015, has made businesses think about their procurement process in more detail than ever before.

The role of procurement has now changed too, and professionals play an integral role in sourcing suppliers that follow the law and best practice techniques – creating a more transparent supply chain for their business.

As the Chartered Institute of Procurement and Supply (CIPS) describes, “While modern slavery is illegal in every country in the world, it still occurs in every country in the world.” With legislative risk facing businesses that fall foul of modern slavery, it is vital that procurement professionals fully understand, implement and manage the risk of modern slavery in their supply chain.

The procurement cycle

To help professionals, CIPS have reinforced their seven stages of the procurement cycle to negate the risk of modern slavery.

1 – Identify vulnerabilities

You should be looking for supply chain vulnerabilities already. These may be broken down into geographical, sector, or product areas – whatever you believe has the greater risk of employing people under what is deemed modern slavery.

Discover how UK businesses are rising to the modern slavery compliance challenge across their supply chain >

To prioritise risk, you should assess your current and prospective purchases against a number of factors, including level of spend, level of business critical risk, and likelihood of non-compliance against company ethical objectives and the law.

2 – Understanding and dealing with risk

Suppliers deemed to be high risk should develop a map of their supply chains. Using various products on the market to map out your supply chain, you should use this research to understand where the labour-intensive part of your supply chain exists – and ensure good human resource management occurs to negate the risk of modern slavery.

This approach gives greater visibility, beyond the three tiers of your supply chain that you may have already identified. Once identified, contractors need to draft, or review, your social and environmental criteria for appointing suppliers.

3 – Supplier engagement and procurement plan

Supplier engagement should be used in step three to discover the working standards, best practice, and identified issues of each individual supplier. Once this is done, you should be developing a procurement plan to sustain the quality and price of the product or service you require – without compromising on social and environmental standards.

Buyers should be developing procurement plans with time frames, evaluation criteria, and records of who is responsible internally – to help achieve an ongoing procurement plan that ensures new suppliers meet the new procurement criteria.

4 – Evaluating and shortlisting of suppliers

Implementing new policies, rules, or procurement processes is always the hardest part for procurement professionals, however this is the only way to ensure full compliance throughout your supply chain.

During this stage, buyers must reinforce to existing suppliers the importance of new environmental and social performance, and should use this performance to assess their contractors in order to meet ethical standards. This should be followed by updating all relevant documents to include questions on new standards – such as on your pre-qualification questionnaire (PQQ), invitation to tender (ITT) and request for quotation (RFQ).

5 – Evaluation of quotes or offers

Once PQQs have been submitted, you as the buyer, need to research into any inter-related elements that can negate the chances of modern slavery happening, and improve the overall relationship with your suppliers.

Work should be done to reach out to local organisations, trade unions, and other worker’s groups to identify any potential issues that may occur. This research should also support the written claims of the suppliers surrounding their social and environmental practices. If this is shown to be false on inspection, you know it is time to either help them improve, or to look for other suppliers.

6 – Contract and performance management

Prices, deadlines, quality, and terms of payment are all standard contractual agreements, but ethical and sustainable clauses must now be added to ensure compliance with modern slavery, as well as other social procedures.

Discover how UK businesses are rising to the modern slavery compliance challenge across their supply chain >

Procurement professionals should go above and beyond to ensure suppliers and contractors thoroughly understand the contents of the contract, obtain any feedback, and more importantly, ensure they stick to the agreed key performance indicators (KPIs).

7 – Update ethical procurement programme

After adding new clauses in supplier contracts regarding ethical standards, you should be reviewing these as part of your KPI supplier programme on a regular basis. This approach allows you to ensure compliance to agreed contracts and policies, but also allows you to gain a snapshot of which suppliers are struggling to maintain your standards.

Many organisations are now moving towards, what is being called, ‘beyond auditing’ to ensure suppliers are focussed on what is needed to help improve in relation to the new legislation. Training and awareness-raising are typical examples of what you should be doing to aid the education of your suppliers.

Fully integrated modern slavery process

The scrutiny that organisations are now facing to improve their supply chain’s conformance to modern slavery is at an all-time high. It is up to procurement professionals, such as yourself, to not only create the ethical policies required for your suppliers to abide by, but also to fundamentally implement this into your processes.

From PQQs to internal KPI monitoring documents, you should integrate ethical standards, such as modern slavery policies, into your processes in order to ensure the uppermost compliance throughout your supply chain.

New Modern Day Slavery Report released

Discover how UK businesses are rising to the compliance challenge across their supply chain by downloading the inaugural Modern Day Slavery Survey 2017 Report. Featuring key findings from procurement and supply chain professionals such as poor internal policies, failing supply chains, and best practice advice to assure long-term slavery compliance.

A 2016 survey carried out by the Altius team to question procurement professionals around the UK has thrown up some interesting correlations regarding modern slavery.

Despite the majority of respondents being aware of the importance of modern slavery and having a policy in place already, procurement professionals admitted that more needed to be done by their firm to ensure compliance going forward into 2017.

Here’s a look at just five of the key areas that respondents flagged as problem areas, and what actions can be done to ensure they are fully compliant in the future.

1 – Get proof of compliance

While 4 in 5 respondents said their company now has a Modern Slavery Act policy, 45% said that they cannot see evidence of the new policy being adhered to. This includes suppliers and contractors within the respondent’s supply chain.

Discover how UK businesses are rising to the modern slavery compliance challenge across their supply chain >

For firms, simply having a modern slavery policy isn’t enough, especially for the procurement teams. Evidence needs to be gathered as part of supplier assessments and re-assessments to ensure they can show proof of compliance. For example, suppliers could show paperwork relating to the internal procedures they have in place whereby employees can flag up slavery concerns through a whistle-blowing scheme.

2 – More frequent supplier re-assessments

Less than 25% of respondents said that they have re-assessed their existing suppliers since the introduction of the Modern Slavery Act in 2015 – almost two years ago. On top of this, 55% admitted that they do not had any modern slavery-specific questions on their supplier assessment questionnaires.

Best practice of supply chain compliance states that existing suppliers should be re-assessed every 12 months at least. While the task can become a burden to procurement and health and safety professionals in-house, business can change considerably in a year, and firms must be aware of these changes in order to be sure their supply chain is fully compliant.

3 – Push for senior team support

A sore point for survey respondents was the lack of support from their senior team in help dealing with the modern slavery legislation changes. 82% stated they wanted their senior team to do more to enforce compliance throughout the organisation, while only 47% agreed that their senior team fully understood what is deemed ‘illegal’ under the Act.

While procurement teams and health and safety professionals have the ability to manage the risks associated with non-compliance throughout the business and supply chain, ultimately, any blame for falling foul of the new legislation is at the door of the senior management team. Efforts should be made by procurement teams to flag the severe importance of compliance, as well as educating the Managing Director, etc. on what the legislation actually means.

4 – Pressurise suppliers for quicker responses

When asked what percentage of their suppliers they believed were compliant to the Act, survey respondents averaged just 30% of their supply chain. One of the main reasons for this result may be down to the amount of time it takes for suppliers to confirm their compliance, thus making procurement teams wary.

Discover how UK businesses are rising to the modern slavery compliance challenge across their supply chain >

47% of respondents confirmed this by saying they were concerned with how long it takes for suppliers to prove compliance. In this situation, procurement teams should pressurise their suppliers more for quicker responses. Automated compliance systems, for example, can help obtain the relevant documents without procurement needing to chase regularly for information.

5 – Updating internal processes

One of the top challenges respondents said they’d face in 2017 is ‘identifying potential risks in their supply chain’. 41% believe there are hidden risks, however, the same respondents believed that their own procurement processes needs auditing for best practice.

It is clear from these two results that procurement teams need to establish whether their process and documentation is doing enough to collect the information required to pass suppliers as being compliant to modern slavery. Firms should look especially at their re-assessment questionnaires to begin, as well as their on-boarding documents for new suppliers such as PQQs (pre-qualification questionnaires).

What other actions must firms take?

Download your copy of The Modern Day Slavery Survey 2017 Report and discover what other areas procurement, health and safety and contract managers believe need action to be compliant to modern slavery.

The report, which has been endorsed by member of the Parliamentary Select Committee on the Modern Slavery Bill, the Rt Revd Dr Alastair Redfern, is available to download for free.

Altius are pleased to launch the inaugural Modern Day Slavery Survey 2017 Report, following the nationwide survey completed by the team last year.

Modern slavery has become a hot topic for procurement and supply chain professionals as firms seek to gain compliance to the new legislation launched by the UK Government back in 2015. As a result, Altius asked for the anonymous opinions of professionals throughout the UK on the impact the new legislation has had.

The report, which has been made available as a free download, shows the fascinating correlations procurement teams are facing throughout different sized companies and sectors they operate in. These correlations include:

• Poor internal processes – Respondents admit their documentation is failing to obtain vital supplier information on modern slavery.
• Lack of senior support – Over 4 in 5 respondents believe their senior management team should be doing more to ensure compliance.
• Slow supplier compliance – Almost half of all respondents are concerned at the time it takes for suppliers to prove compliance.
• No long-term strategy – Respondents do not have key modern slavery procedures in place to ensure long-term security.

The report also contains the survey respondent’s ‘Top 5 Challenges of 2017’ and what they believe the future of modern slavery compliance will look like.

Download The Modern Day Slavery Survey Report

Modern Slavery expert’s view

The report has been compiled with leading modern slavery experts, including educational establishment, Derby Law School, and the Rt Revd Dr Alastair Redfern. Speaking on the importance of this report, Dr Redfern, a member of the Parliamentary Select Committee who drafted the Modern Slavery Bill, said:

“This report is a model of how businesses can be encouraged to recognise the realities of the challenge of Modern Slavery, and to identify areas for improvement and the development of good practice. Such responses will mitigate risk, improve standards and help to eliminate the presence of slavery in supply chains.”