Companies and their supply chains around the world have experienced devastating effects as a result of COVID-19. As the global workforce continues to change alongside the pandemic, millions of workers are left in vulnerable positions, and business owners are forced to consider how they can support their supply chains through the crisis while being mindful of modern slavery.
This was the topic of a recent webinar, “Modern Slavery Statement: COVID-19 Putting Pressure on Supply Chain Reporting“ is presented by Abigail McGregor and Grace Do of Norton Rose Fulbright Partner. Norton Rose Fulbright is a global law firm providing corporations and financial institutions with practical solutions to legal, compliance, and regulatory risks. We have already collaborated with them to launch a modern slavery supply chain risk assessment tool.
The webinar with McGregor and Do covers several topics to prepare businesses for the new modern slavery reporting obligations. The discussion included:
- Tips for undertaking a modern slavery risk assessment
- Amendments to global legislation
- Updates on reporting trends, deadlines, and criteria
- Impacts of COVID-19 on supply chains
You can also register for our global webinar series, which will cover topics relating to assessing, managing, and continuously monitoring modern slavery risks within your global supply chains. In the coming months, we’ll specifically be discussing modern slavery reporting requirements in the UK, North America, and the EU.
What to Include in a Modern Slavery Risk Statement
There are several critical pieces of information that you should include in a modern slavery risk statement. Overall, a modern slavery risk statement should clearly define a company’s risk assessment approach across various operational levels. It should also outline their grievance and oversight models, their procurement management policies, supplier due diligence processes, and how they plan to remediate.
As presented in the webinar, there are seven key strategies to follow that can strengthen any modern risk statement:
- Identify the reporting entity
- Describe the structure, operations, and supply chains of the reporting entity
- Outline the risks of modern slavery practices in the operations and supply chains the reporting entity owns
- Specify the actions taken by the reporting entity to assess those risks
- Show how the reporting entity assesses the effectiveness of such actions
- Explain the process of consultation with any entities the reporting entity owns or controls
- Include any other information that the reporting entity considers relevant
Recent Global Updates to Modern Slavery Laws
Several countries — from the U.K. to the U.S. — are adopting legislation to help combat slavery and human rights abuses in their supply chains. You can read about those changes in our blog, “A Look at Modern Slavery Risk Legislation on a Global Scale,” but we’ll briefly touch on some of the highlights.
Canada: Bill S-211 was introduced in the Senate on 5 February 2020 (this is the second attempt at passing legislation that addresses the serious human rights and supply chain issue of modern slavery after the first bill did not make it past the first reading in 2018 due to lack of political momentum.
USA: While many US Entities are undertaking DD of supply chains, no significant legal developments have been made. However, if Democrats control the presidency, the House of Representatives, and the Senate, they may wish to introduce a human trafficking law.
UK: In September 2020, the UK Government committed to amending the UK MSA to better align with the Australian MSA, making reporting criteria mandatory.
EU: The European Union plans to develop a legislative proposal by 2021 requiring businesses to carry out due diligence in relation to the human rights and environmental impacts of their operations and supply chains.
Other countries like Germany, Norway, and Finland, have committed to and begun drafting modern slavery laws.
For more updates, be on the lookout for a comprehensive whitepaper and additional blog posts on global modern slavery coming soon.
The Impact of COVID-19 on Modern Slavery Reporting
COVID-19 has increased the vulnerability of workers in global operations and supply chains. As the virus continues to spread, it remains difficult for authorities to visit a factory and make sure the right type of conditions are available. It is almost impossible to determine if people are working in a forced labor situation.
Factory shutdowns, order cancellations, workforce reductions, and sudden changes to supply chain structures have also disproportionately affected some workers and increased their exposure to modern slavery and other forms of exploitation. Because of this, some countries are considering these new challenges in their modern slavery reports.
The Australian Border Force has issued an update, encouraging entities to take steps to protect vulnerable workers in their global operations and supply chains from the impacts of COVID-19. They have asked entities to explain in their modern slavery statements how the coronavirus has impacted their capacity to assess and address modern slavery risks during their reporting periods. Learn more about Australia’s approach to modern slavery reporting.
This article only briefly touches on what was covered in our webinar on COVID-19 and modern slavery. For a more detailed analysis of modern slavery on a global scale, sign up for our webinar series or get in touch with our team.