Modern slavery in fashion retail supply chains – what do you need to do?


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This article is taken from the latest edition of Fladgate’s Fashion Update. Please email the marketing team on marketing@fladgate.com to be added to the mailing list for future updates.

Do you know where that dress came from?

While a garment’s label is likely to set out the country in which the item was made, consumers have traditionally had very little visibility over the actual hands sewing their clothes.

Last week H&M and Next both admitted to sacking a supplier after finding Syrian refugee children working in Turkish factories supplying their garments. This is just the latest example of what has been recognised as an industry-wide issue.

The use of forced labour and slavery in fashion retail is so prevalent that the Draft Modern Slavery Bill Joint Committee heard evidence that each of us is probably wearing at least one garment that has been made with some element of forced labour. There are estimated to be at least 27 million “slaves” worldwide.

Many retailers and brands do not have full control over their supply chains. Elements are contracted out, often to manufacturers and suppliers in poorer countries overseas. This can lead to issues such as exploitation and poor working environments going undetected.

Enter the Modern Slavery Act

A new piece of legislation was introduced last year which requires businesses to be transparent over what it happening within their supply chains.

The Modern Slavery Act 2015 (the Act) applies to all retailers with a turnover in excess of £36 million per year. This includes the turnover of any subsidiary companies.

The government predicts that approximately 12,000 UK companies will fall within the scope of the legislation. The Act will also apply to overseas companies if part of their business is carried out in the UK.

What will your business need to do?

From 29 October 2015, any businesses caught by the Act will need to make an annual statement of the steps they have taken to “ensure that slavery and human trafficking are not taking place in any part of their business or supply chain”. 

If an organisation has not taken any such steps it must make a statement to this effect – this carries an obvious risk of negative publicity.

The Act does not set out exactly what the statement must include. However, the government has released a “practical guide” to assist businesses in making statements. It sets out a non-exhaustive list of what could be included, such as information about:

  • the organisation’s structure, business and supply chains;
  • its policies and due diligence processes in relation to slavery and human trafficking in its business and supply chains;
  • training available to employees; and
  • risks that are particular to their industry, activities and structure and how successfully those risks have been mitigated.

How and when should the disclosure be made?

The disclosure will need to be made “as soon as reasonably practicable” after the end of each company’s financial year (but should be made within six months). Businesses with a year-end of 31 March 2016 will be the first who must publish the reports. 

The statement must be approved at a senior management level (i.e. board level for limited companies). A link to the statement must be published in a prominent place on the retailer’s homepage. If the business has no webpage it must provide copies of the statement to anyone who requests it.

What you should do now:

  • you should consider whether your company falls within the financial thresholds of the Act;
  • if the Act applies, then you will need to consider whether to make a statement that you are taking steps to tackle slavery and trafficking; and
  • you should then conduct the relevant risk assessments and supply chain audits (particularly looking at your working practices and policies, along with those of your existing suppliers).

Other steps you could take include:

  • initiating training programmes;
  • putting policies in place (including whistleblowing policies so that issues can be reported); and
  • including wording in your supply chain agreements to prohibit suppliers from using forced or trafficked labour.

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