Ready or not: Universities and reporting requirements under the UK Modern Slavery Act

January 17, 2017 •

Olga

By Dr. Olga Martin-Ortega
Reader in Public International Law and leader of the Business, Human Rights and the Environment Research Group, University of Greenwich

On 29 October 2015 the Transparency in Supply Chains provision (section 54) of the UK Modern Slavery Act (“section 54”) entered into force. Section 54 requires commercial entities to report annually on their efforts to identify and prevent modern slavery in their supply chain. It aims to engage commercial organisations in the fight against slavery, human trafficking and forced labour.

The Modern Slavery Act (“MSA”) defines “commercial entities” as suppliers of goods or services with a total annual turnover of £36 million or more. This includes certain public bodies subject to the UK’s Public Contracts Regulations (2015).  Amongst these are over one hundred Universities and Higher Education providers, which receive public funding from the Government at the same time as they act as commercial entities, by charging fees for the services they deliver.

While many companies were expecting the enactment of section 54, and had participated in Government consultation, it came to a surprise to universities, which have had to wake up to an important reality: they, too, are players in fighting modern slavery, human trafficking, forced labour and more generally human rights abuses in their supply chains.

New reporting requirements – but will they be met?

The Modern Slavery Act requires universities to devise policies, procedures and actions to ensure that they are not contributing to the exploitation of human beings through slavery, forced labour and human trafficking.

As a result, universities are currently undertaking their first round of reporting under the Modern Slavery Act and publishing “Slavery and Human Trafficking Reports” on their websites.

According to the UK Government Guidance on section 54, such reports are expected to be published within 6 months of the end of an organisation’s financial year.  This means that, by 31 January 2017, all universities should have made their Slavery and Human Trafficking reports publicly available and linked to their home websites.

At time of writing, twenty-seven Universities and three University Hospitals have lodged their statements with the Business and Human Rights Resource Centre, the largest repository of Slavery and Human Trafficking statements currently available. Another sixteen Universities and one University Hospital have made their statements available in their websites, but these have not been compiled in the repository.

Interestingly, the first institution within the higher education sector to produce an MSA statement was not a university but a professional buying organisation, the London Universities Purchasing Consortium (LUPC), which undertakes procurement on behalf of most of London’s universities, as well as several public museums, galleries and theatres. Although LUPC’s turnover does not reach the minimum threshold of £36 million a year, the organisation considered it important to demonstrate leadership within the higher education sector and to provide guidance and encouragement to academic institutions in engaging with the MSA’s requirements.

Scope and quality of MSA statements – room for improvement

The MSA does not prescribe exactly what commercial entities should report on under section 54. However, it does suggest six areas which should be addressed by their MSA statements: i) the organisation’s structure, its business and its supply chains; ii) its policies in relation to modern slavery; iii) its due diligence processes in relation to modern slavery in its business and supply chains; iv) the parts of its business and supply chains where there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk; v) the effectiveness of measures taken in ensuring modern slavery is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate; and vi) training available to its staff.

Despite this, most of those statements that have been published by universities so far are quite sparse, and none addresses the full list of topics highlighted by the Act. Most merely state their current ethical and sustainability policies in general terms which, in most cases, do not foresee human rights supply chain risks. Many express intentions of implementing a standalone modern slavery and human trafficking policy by the end of the next financial year.

Most refer to their institutions’ support for the Ethical Trading Initiative Base Code, which does contain a series of labour rights principles. Some of them mention their affiliation to Electronics Watch. However, they do not offer any detail on their own due diligence processes, or how they map their supply chains to assess risks of modern slavery, human trafficking and forced labour. The ones that do refer to plans to implement due diligence process have focused on informing suppliers of their zero tolerance policy and distributing questionnaires to ensure that arrangements are in place around their supply chains.

Whilst most institutions report on potential risks in specific sectors, none admits to having identified slavery in its supply chain, and none comes close to recognising the scale of such risks.  With regard to effective mitigation and remedy, most Universities limit themselves to seek assurances from suppliers rather than establishing their own monitoring procedures and oversight mechanisms.  Even if several institutions report having undertaken external trainings on modern slavery, in general, there is evidently still a long learning curve ahead for UK higher education institutions before they will be able to provide substantive evidence of having met their responsibilities as part of the state, under the UN Guiding Principles on Business and Human Rights.

Human rights and public procurement: no going back

Some in the university sector have greeted their new responsibilities under the MSA positively, as providing an opportunity to review their policies and enhance their social and ethical commitments. Others have been more reticent.  At various gatherings, while some higher education procurement professionals have expressed a thirst for knowledge and skills and a desire to become a force for change, concerns have also been voiced about MSA requirements being “yet another burden” on already-stretched procurement departments.

The truth is that public buyers cannot elude their new statutory supply chain responsibilities. Expectations from stakeholders, as well as legal obligations to identify and prevent human rights risks associated with their purchasing decisions, are only likely to increase in future.  Further proposals, for instance, to require all public buyers to report under the MSA and the exclusion of suppliers for lack of due diligence in their own supply chains, as suggested in a private member’s Bill to amend the MSA are now under discussion in the UK Parliament. These would complement already existing mandatory exclusions for suppliers found to be implicated in trafficking or modern slavery.

Such measures indicate that conceptions of “value for money” in public procurement are continuing to evolve and, increasingly, human suffering is not being tolerated as part of that equation.

Whilst reporting may not be a panacea, and transparency on its own cannot eliminate abuses in the supply chain, section 54 MSA has already proved itself as a catalyst for building understanding amongst public buyers, especially universities, about the human rights risks attached to their commercial relationships. Smart universities will seize the opportunity it offers to establish appropriate human rights due diligence frameworks, to engage with suppliers and to report transparently to stakeholders.

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Dr. Martin-Ortega is Reader in Public International Law at the University of Greenwich where she leads the Business, Human Rights and the Environment Research Group (www.bhre.org). She is a member of the Steering Committee of the International Learning Lab on Procurement and Human Rights and leads its Electronics Hub. She would like to acknowledge the research assistance by Rahima Islam.