Modern Slavery

The United Nations calls modern slavery – human trafficking, child labor and debt labor – the world’s second-largest criminal industry.

Efforts to monitor and crack down on modern slavery have forced companies worldwide to scrutinize their supply chains.

The most widely known attempt to mandate corporate transparency is the United Kingdom’s Modern Slavery Act of 2015. As a result of annual reporting by companies, the UK government estimates that at least 13,000 people are victims of forced labor, sexual exploitation or domestic servitude, Thomson Reuters reported recently. More than 5,000 potential victims were referred to UK authorities last year, a record number.

Worldwide, the Council on Foreign Relations estimates there are 40.3 million victims of enslaved labor and that one in four victims is a child. The Modern Slavery Act “has done a lot to raise awareness,” Kate Roberts, head of office at the Human Trafficking Foundation, told Thomson Reuters. “Unfortunately, in practice, we’re still waiting to really see many tangible outcomes from it yet.” The Business and Human Rights Resources Centre notes similar “lagging” efforts in FTSE 100 firms with operations in the UK.

How it works

• Who reports:

  Any organization that conducts business in the UK and has an annual profit of £36 million ($50.1 million) must issue a statement within six months of the financial year’s end detailing how it has audited the supply chain and operations for slavery risks and violations.

• What to report:

  There is no template for the report, but it should be concise, written in English, approved by the organization’s board of directors; signed by the director or equivalent, and published on the organization’s public website, linked to from the homepage. UK subsidiaries, UK branches and global organizations with a significant presence in the UK (including offices, assets, clients and trade relationships) are also beholden to this obligation, a Harvard Law School forum on corporate governance and financial regulation suggests.

• How often to report: 

  Annually. Each year’s report should show improvement in corporate transparency – meaning that the organization’s workforce is being educated about modern slavery, policies are being created to prevent slavery or protect those who fall within a risk category (seasonal workers, unskilled laborers and those who work in potentially dangerous environments), and resources such as budget and staff are being allocated to address risks within the organization.

• Failing to report: 

  The consequences include an injunction from courts to comply, and possibly a fine.

• Accountability: 

  The Modern Slavery Registry (modernslaveryregistry.org) keeps track of all published reports across 27 sectors, ranging from capital goods and consumer services to pharmaceuticals. This website also measures organizations’ compliance with the Modern Slavery Act; as of April 2018, only 19 percent met all minimum requirements.