The Leading News & Information Service For The Facilities, Workplace & Built Environment Community

One in Five UK SMEs Unaware of the Modern Slavery Act 

One in Five UK SMEs Unaware of the Modern Slavery Act 
30 June 2021
 

Research has revealed a significant gap in understanding and awareness of modern slavery in UK SMEs.

Over half are not covered by the Modern Slavery Act 2015, falling under the reporting threshold, and therefore threatening large enterprises through their supply chain and leaving SMEs exposed to the risk of having modern slavery in their business. 

In fact, one in five (20 per cent) of UK SMEs are unaware of the Modern Slavery Act 2015 altogether, according to insights from Alcumus.

To address this gap, and empower the nation’s SMEs, Alcumus has partnered with the charity, Unseen, to launch a toolkit for businesses that will include useful information to tackle modern slavery. 

 

"The Modern Slavery Act is broken; the government is not fully engaging with SMEs and therefore the act falls short of ensuring all these companies understand their own risk and exposure."

–Gemma Archibald

Chief Operating Officer, SME at Alcumus

 

1/3 of SMEs Don’t Understand the Legal Requirements of the Modern Slavery Act 2015 

 

Large enterprises appear to be actively engaging with their obligations as defined by the Modern Slavery Act, with the majority (84 per cent) having contacted all of their UK based suppliers to check their compliance to the Modern Slavery Act 2015 and 81 per cent saying they offered help and support.

Modern slavery awareness and demonstrable action also form a key part of the procurement process. Research from Sodexo recently showed that two-thirds (66 per cent) of business leaders say they have already started replacing suppliers in the last year that don’t live up to their diversity and inclusion values and 65 per cent said they have parted ways with supply chains that do not align with their own environmental policies over the last year.

Yet, with UK SMEs forming (and aspiring to form) a key part of the supply chain of many large enterprises, and them accounting for three-fifths of the employment and around half of turnover in the UK private sector last year, the survey reveals that there is a huge knowledge gap that needs to be addressed within this market segment:  

 

  • One in five SMEs are unaware of the Modern Slavery Act 2015 
  • A third of SMEs don’t understand the legal requirements the Modern Slavery Act 2015 places on organisations 
  • 64 per cent of SMEs don’t have a company policy on their approach to modern slavery 
  • More than half (56 per cent) of SMEs don’t have any particular person responsible for modern slavery 

 

SMEs a Crucial Part of Any Supply Chain

 

SMEs are an essential part of any large enterprises’ supply chain that help businesses to effectively meet the needs of their end customers. Given the commercial relationship between the two, it is highly important for large enterprises and SMEs to work in sync and address any gaps that may impact their partnership. 

When UK enterprises were asked about the level of information they try and obtain from SMEs on their policies around modern slavery, they stated that they are asking suppliers not only for a statement of compliance, but also for evidence to show they have processes and procedures to support it, and that they in turn check on their own supply chain. 

However, when UK SMEs were asked about the level of contact being made and support being provided by enterprises, the picture changes dramatically. The research reveals that only half (53 per cent) of SMEs have been contacted by their clients to check their compliance with the Modern Slavery Act 2015. This rises to 66 per cent among larger SMEs with 51+ employees and 58 per cent for those with 11-50 employees respectively but remains below what enterprises claim they have done.  

The majority of SMEs (82 per cent) who have been contacted by their clients confirmed that they were offered appropriate help and support.  

 

"Big corporates have to check their supply chains and make sure that they aren’t inadvertently exploiting people – but how can the system be expected to function when that supply chain is neither required nor realistically able to keep track of labour conditions in suppliers and customers in a globalised economy? 

 

–Jess Phillips

Shadow Minister for Domestic Violence and Safeguarding

 

How to Increase Modern Slavery Awareness

 

The Modern Slavery Act 2015 has helped to improve awareness of the risks around exploitation and it has created greater responsibilities, particularly for larger companies to report on what steps they are taking to reduce their exposure to potential risks. However, there are still shortcomings over practical understandings of the forms that modern slavery takes and the proactive activity that is required to minimise risk.

Due to the hidden nature of modern slavery, and the apparent lack of understanding of how modern slavery works, it can be easy for businesses to miss identifying simple incidences of exploitation, such as workers being paid low wages or a wage that is kept by their owner. This knowledge gap must be closed. SMEs need to take modern slavery seriously to be considered as suppliers by large corporates – currently, only 18 per cent of SMEs have large corporate clients.  

 

Government Support Needed

 

In terms of additional support, 46 per cent of SMEs think that more specific information from the government on how to become compliant would encourage their company to make it a higher priority on their business agenda. The use of digital tools to assist with internal compliance audits and the threat of financial penalties are also seen as effective ways to encourage businesses to prioritise compliance to modern slavery. 

A quarter (24 per cent) of SMEs said that appropriate digital tools could encourage businesses to ensure compliance to modern slavery. A few SMEs believe that the threat of financial penalties and criminal charges for non-compliance could also help encourage businesses (20 per cent and 16 per cent respectively). 

However, 66 per cent of SMEs believe that it is the responsibility of both government and businesses to tackle modern slavery issues. More than half of SMEs (53 per cent) state that a higher civil financial penalty would encourage organisations to take modern slavery more seriously. As such, three in four UK SMEs (74 per cent) believe that the government should fine companies that are not compliant with he Modern Slavery Act 2015. 

Gemma Archibald, Chief Operating Officer, SME at Alcumus commented that identifying and eliminating modern slavery from a supply chain not only requires the practical understanding of what violations look like, but also an understanding of where they generally occur:

"The Modern Slavery Act is broken; the government is not fully engaging with SMEs and therefore the act falls short of ensuring all these companies understand their own risk and exposure. 

"While the government can take a far stronger stance here in leading companies to meaningful compliance, we believe that one of the best ways to reduce modern slavery across supply chains is through the adoption of enhanced and reliable awareness at a corporate level. At Alcumus, we offer guidance and relevant technical solutions that can help where not enough human resource can be dedicated due to lean organisational structures or the lack of capital to provide safer workplaces, in their own businesses as well as their supply chain." 

 

Jess Phillips

Picture: a photograph of Jess Phillips

 

Jess Phillips, Shadow Minister for Domestic Violence and Safeguarding, added: “Our current framework for tackling modern slavery has a glaring weakness when it comes to SMEs – despite being the bedrock of our economy, the Modern Slavery Act doesn’t hold them to any higher standard in monitoring for and reporting modern slavery than any other person on the street.

"Big corporates have to check their supply chains and make sure that they aren’t inadvertently exploiting people – but how can the system be expected to function when that supply chain is neither required nor realistically able to keep track of labour conditions in suppliers and customers in a globalised economy? 

“I welcome the insights from Alcumus’ research today – companies don’t only need further guidance but would welcome clear regulatory requirements that tell them how they can – and should - do their part in tackling modern slavery. Compliance will always be a concern across businesses of all sizes but clearer rules will do a lot to empower the good actors and drive out those determined to hide in the shadows.” 

Picture: a photograph of a construction worker walking across a site

Article written by Ella Tansley | Published 30 June 2021

Share



Related Articles

Majority of CHAS Members Implemented Modern Slavery Policies 

Whilst 72 per cent of 229 CHAS member companies, the majority of whom are SMEs within the construction sector, have a modern slavery policy, there is still much...

 Read Full Article
New Watchdog Launched to Protect Workers' Rights

The government is to create a body to reduce workplace abuse and modern slavery in the UK. The new workers’ watchdog is to take over responsibility for tackling...

 Read Full Article
Ethical Workwear Procurement and Supply Chain Transparency

Knowing where and how your organisation's corporate workwear is sourced, manufactured, transported and stored is increasingly being considered as part of its own...

 Read Full Article
Sodexo Leads Modern Slavery Strategic Supplier Forum

Sodexo UK and Ireland, together with its four largest strategic suppliers, has formed a Modern Slavery Strategic Supplier Forum to share best practice. Along with...

 Read Full Article
Construction Sector Expands at its Fastest Pace Since 2014

UK construction output gained considerable momentum in March, supported by rises in house building, commercial work and civil engineering. Adjusted for seasonal...

 Read Full Article
Ten Ways To Mitigate Supply Chain Risk in 2021

CHAS, the supply chain risk management expert, highlights ten ways to mitigate supply chain risk in 2021. The Contractors Health and Safety Assessment Scheme (CHAS) is...

 Read Full Article
How to Choose a Security Services Provider If They All Have the Same Accreditations

What accreditations should you look for in a security provider, and what should you do if they all have the same? Liberty Glennon is the Commercial Executive at...

 Read Full Article
Facilities Services Tenders in the UK – Everything You Need to Know

The FM market in the UK was valued at $67.29 billion in 2019, and it is expected to reach $70.14 billion by 2025. General UK government expenditure on...

 Read Full Article
What Does Net-Zero Mean for Tendering?

From 30 September 2021, bidders for certain UK public contracts will be required to submit a Carbon Reduction Plan as part of the selection process assessing the...

 Read Full Article
New Appointments in Facilities Management – July 2021

Bidvest Noonan, ISS, and Alcumus have all appointed new members of staff this July.   Picture: a graphic showing headshots of Cormac Sheils, Paul...

 Read Full Article