Modern Slavery Theory

What is modern slavery

1. when an individual is exploited by others for personal or commercial gain

2. Involves forced labor, coercing migrant workers, debt bondage, paying salary below minimum levels, child labor and deceptive recruitment (tricked, forced, coerced)

Purposes of reporting on modern slavery

1. obligate companies to investigate and reveal hidden supply chain risks of exploitation

2. promote corporate accountability by demonstrating how they respond and prevent slavery risks

3. support sustainable supply chains through disclosure and reduced reliance on exploitative practices and responsible sourcing

4. to align with global frameworks like UNSDG and UN Principles on Business and Human Rights through reporting

Role of directors in Modern Slavery reporting

1. identify risk of MS within the company and the supply chain

2. educate people within organization and provide necessary disclosures

3. action taken by company to address MS risks such as investigation before entering into a deal/transaction

Role of accountants

1. to hear when the people within the client organization speak

2. to communicate with management about key concerns about MS and pursue problem-solving

3. to assess the risk of non-compliance with the Modern Slavery Act

4. for accounting firms to be mindful of work pressures that they subject their staff to

5. to have a moral obligation to report when instances of modern slavery are noticed in the client company

What accountants do

1. often required to conduct an external and internal investigation before entering into an agreement/transaction

2. accountants should be aware of any circumstances of exploitation in high risk areas of work (agriculture, nail salon, restaurants etc.)

3. should look into any unusual patterns like info about staffing, cashflows, and invested funds in the organization

4. investigate how business hide money, like how a nail salon has luxury company vehicles

5. investigate the possibility of financial crime if the business ownership is unclear, or has unusual structural complexities to disguise cash flows

Key principles

1. transparency — where companies publish clear and accessible statements about slavery risks and actions taken

2. accountability — where senior leadership is responsible for approving and signing reports, ensuring top-level commitment

3. risk-based approach — the focus on identifying high-risk sectors, geographies, and suppliers

4. continuous improvement — reports show progress over time not just improvement

5. stakeholder engagement — companies must consider expectations of investors, customers, and civil society.

consequences of non-compliance with MS reporting

1. possible legal injunctions and fines

2. damaged reputation as people lose trust in the organization and receive negative media coverage

3. damaged investor relations and reduced capital access

4. barriers to contracts and partnerships enforced by the government.

Combating initiative GBCAHT

1. providing companies a toolkit to explain MS with real world examples and a focus risks associated with working hours, use of migrant labor, and confiscation of identity documents

2. enable businesses to support MS survivors through employment and job skills training through a survivor employment guide

3. provide an interactive map to help companies identify organizations that are partnering with businesses to address slavery challenges and running MS trainings for companies.