Business management

Modern slavery: identify the risks your SME could be exposed to

Even small businesses can be affected by modern slavery issues. Here’s how to help eradicate forced labour and human trafficking from your business or supply chain.

  • It’s important to remember that it can affect even legitimate businesses, small and large
  • The anti-slavery charity Unseen records labour exploitation in industries as diverse as construction, hospitality, beauty, agriculture and logistics
  • Guaranteeing ethical supply isn’t exclusive to large businesses; SMEs should also know who they’re working with and learn which questions to ask
  • Large businesses with a turnover of £36m have a requirement within the Modern Slavery Act 2015 to publish a modern slavery statement
  • Corporates are looking for assurance from SMEs in their supply chain that they know and understand the risks of modern slavery
  • Taking appropriate steps to reduce the risk of exploitation for your workers could build your brand’s reputation and even win you business

What is modern slavery?

Modern slavery – the illegal exploitation of people for personal or commercial gain – is a serious crime and an abuse of human rights. It is defined in the UK’s Modern Slavery Act 2015 as comprising the offences of slavery, servitude, forced or compulsory labour, and human trafficking. It can exist in any supply chain, any industry and any workplace, and it’s happening in the UK. 

All businesses are vulnerable to modern slavery occurring within their operations. At NatWest Mentor, we describe it as a well-hidden crime. And, without appropriate precautions, modern slavery can occur without the business owner knowing.

The Modern Slavery Act sets out a range of measures on how modern slavery and human trafficking should be dealt with in the UK. Section 54 requires businesses with a turnover of £36m or more to publish an annual statement setting out the steps they have taken to prevent modern slavery in their business and supply chains. Where no steps have been taken, a statement must also disclose this point.

Legislation is predicted to tighten further in the future. According to professional services firm PwC, the Home Office is considering a range of options to boost compliance and strengthen reporting, including more punitive sanctions for corporate compliance failings.

As part of their due diligence, large companies are scrutinising how SMEs in their supply chain, or those bidding for contracts, are demonstrating that they are managing risks effectively. If you apply for a government contract, you will also have to prove how you are protecting workers. 

We’re not just talking about modern slavery or labour exploitation happening in unscrupulous businesses; it’s happening in legitimate businesses as unscrupulous people infiltrate supply chains.

Justine Currell
CEO of Unseen

Consumers, investors, and non-governmental organisations are increasingly likely to apply pressure where they believe a business has not taken sufficient steps to reduce the risk of exploitation for their workers. 

For more information about modern slavery, visit the Unseen website or GOV.UK.

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This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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