Modern Slavery Bill

1.1 As institutional investor s, we have a vested interest in ensuring the companies in which we hold shares are protected from the reputational and operational risks of slavery in supply chains. Providing the investment community with adequate information on this issue is essential to prudent investment decision-making processes which seek to take such risks into account.

1.2 As such, we would welcome the inclusion of a clause in the Modern Slavery Bill requiring large companies operating in the UK to make annual statements of measures taken by them to: eradicate modern slavery, human trafficking, forced labour (as set out in ILO Convention 29 (1930) and subsequent protocol (2014)), child slavery (as set out in the 1956 Supplementary Convention on Slavery), and child labour (as set out in ILO Convention 138) from their supply chains, procurement and business practices; to require such companies to provide customers and investors with information about measures taken by them to eliminate modern slavery, human trafficking, forced labour, child slavery, and child labour; and to provide victims of modern slavery with necessary protections and rights. We enclose a draft of the suggested amendment, written by a coalition of the NGOs CORE, Unseen, CAFOD and Amnesty.

1.3 Such disclosures would provide us with a clear understanding of how investee companies ensure supply chains are protected from human rights issues. Failure to manage such issues, particularly in the light of increasingly complex global supply chains, may pose significant risks to business. Reputation can be negatively impacted; alongside operational inefficiency and risks of supply chain disruption should unregulated third parties introduce slavery into company operations. We welcome the proactive approach of a significant minority of the UK’s business sector which is taking steps to protect its supply chains from these threats.

1.4 Moreover, we consider that this should be included in the Modern Slavery Bill, rather than as an amendment to the Companies Act. Inclusion in the former would create a broad base by requiring the afore-mentioned disclosure of any company operating in the UK above a specified financial threshold. By contrast, inclusion in the Companies Act would only create the requirement for public/quoted UK companies, assuming it were included in s417(5) which is the section pertaining to non-financial performance. Therefore, it would create an uneven playing field between private and public companies, rather than including all those companies not yet taking steps to protect their operations from slavery issues.   Furthermore, a s large companies move between private and public status, we consider that creating a wide-ranging requirement would be more appropriate and create a simpler system for the corporate sphere as a whole .

1.5 Finally, we consider that proportionate, pro-business legislation which enlists business as a partner is vital in efforts to combat human rights risks within supply chains, and especially in efforts to reduce the incidence of forced labour and human trafficking. The suggested ‘transparency in supply chains’ requirement provides this and therefore we expect it would be welcomed by companies and investors alike as a prudent and effective approach to tackling a significant risk. Similar legislation has already been successfully enacted in the United States in the 2010 California Transparency in Supply Chains Act and has not caused undue burden to the companies affected. We therefore would anticipate similar success in the UK.

Signatories:

SECTION 2: SUGGESTED BILL AMENDMENT

Disclosure by companies of measures to eradicate modern slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst forms.

Requirements of disclosure

Protections and rights for victims of modern slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst forms.

To require large companies in the UK to make annual statements of measures taken by them to eradicate modern slavery, human trafficking, forced labour (as set out in ILO Convention 29 (1930) and subsequent protocol (2014)), child slavery (as set out in the 1956 Supplementary Convention on Slavery), child labour (as set out in ILO Convention 138) and the worst forms of child slavery (as set out in ILO Convention 182) from their supply chains, procurement and business practices; to require such companies to provide customers and investors with information about measures taken by them to eliminate modern slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst Forms; to provide victims of modern slavery with necessary protections and rights; and for connected purposes.

BE IT ENACTED by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:-

Disclosure by companies of measures to eradicate modern slavery, human trafficking,

forced labour, child slavery, and child labour, in particular its worst forms. (1) Every company operating in the United Kingdom and having annual turnover exceeding £60,000,000 shall disclose, as set forth in section 2, its efforts to eradicate to eradicated modern slavery, human trafficking, forced labour (asset out in ILO Convention 29 (1930) and subsequent protocol (2014)), child slavery (as set out in the 1956 Supplementary

Convention on Slavery), child labour (as set out in ILO Convention 138) and the worst forms of child slavery (as set out in ILO Convention 182), from its own operations and direct supply chains for tangible goods ___and services offered for sale. (2) In this Act "child labour" (as set out in ILO Convention 138), in particular its worst forms (as set out in ILO Convention

182) .

The disclosure described in section 1 shall be- (a) set out in the company’s annual report, and (b) posted prominently on the company’s internet website, and a conspicuous and easily understood link to the required information shall be placed on the business homepage.

If the company does not have an internet website, consumers shall be provided with the written disclosure within 30 days of the company receiving a written request for the disclosure from a consumer.

2.

The disclosure described in section 1 shall disclose to what extent, if any, the company does each of the following-

a. Engages in verification of product supply chains to evaluate and address risks of modern slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst forms. The disclosure shall specify if the verification was not conducted by a person independent of the organisation being verified.

b. Conducts unannounced and verified audits and independent inspections of suppliers to evaluate supplier compliance with company standards for modern slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst forms in supply chains. The disclosure shall specify if the verification was not an independent, unannounced audit and shall publish the terms of reference of any audits or inspections carried out.

c. Requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding modern slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst forms, of the country or countries in which they are doing business.

d. Maintains internal accountability standards, supply chain management and procurement systems, and procedures for employees or contractors failing to meet company’s standards regarding modern slavery, human trafficking, forced labour, child slavery and child labour, in particular its worst forms, and requires direct suppliers to publish how they have verified that their certification is valid. The disclosure shall describe such standards and systems.

e. Provides company employees and management who have direct responsibility for supply chain management with training on slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst forms with particular respect to mitigating risks within the supply chains of products.

f. Ensures that recruitment practices at all suppliers comply with the company‘s standards for eliminating exploitative labour practices that contribute to modern slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst forms.

Protections and rights for victims of modern slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst forms.

Companies which uncover modern slavery, human trafficking, forced labour, child slavery, and child labour, in particular its worst forms in their supply chains shall take action necessary and appropriate to assist people who have been victims and shall report on that action in their annual reports.

This Act comes into force two months after Royal Assent. This Act extends to England and Wales, Northern Ireland and Scotland.

August 2014