A report, Modern Slavery and Human Trafficking: An Agenda for Action across the Financial Services Sector, published on 18 January is a "call for action" for the financial services sector to do more to tackle modern slavery and human trafficking (MSHT) within their businesses.
The statistics set out in the report - regarding the level of awareness, training, adequacy of procedures etc - make for uncomfortable reading. For example, nearly half of all board level managers and directors agreed with the statement “modern slavery is not something which occurs in the UK”. Almost three quarters of employees in the sector had never had any form of training regarding MSHT.
The UK Independent Anti-Slavery Commissioner notes, in the foreword to the report, that the UK Government proposes to take steps to bolster the current provisions in the MSA 2015 which require an annual statement on steps taken to tackle modern slavery and human trafficking, but that, in her view, "the only way we will make a step change is if business leaders set the tone from the top and commit to eradicating all forms of coercive labour practices."
The report makes sensible and important recommendations, including to put "MSHT firmly on [the institution's] Board or Senior Management agenda." Many recommendations are familiar to those who have had to design and implement procedures to prevent bribery and corruption. For example, monitoring and reporting, proper risk assessment and due diligence (of staff, suppliers and business partners), and mandatory training.
How best then to achieve the step change that is required? How best to ensure that this important issue does reach the board agenda?
Carrot or stick? We know that the introduction of the failure to prevent bribery offence introduced in the Bribery Act 2010 forced the issue of a firm's responsibility to prevent bribery onto boards' agendas and created a sea change in compliance and corporate culture at board level.
Giving the MSA 2015 teeth to fine an organisation's non-compliance with the requirement to prepare a slavery and human trafficking statement would certainly be a step in the right direction. However, should consideration not be given to the introduction of an offence of failure to prevent human rights harms as proposed in a study by the British Institute of International and Comparative Law to ensure that this is moved up boards' agenda?
"Despite MSHT links to money laundering and other financial crimes, and the introduction of the Modern Slavery Act in 2015, only a small number of financial services companies are actively managing their risk and engaging with clients and suppliers on issues relating to MSHT."