In Conversation: CHAS and Engaging SMEs With Anti-Modern Slavery Efforts September 2022

Over the next two months, we’re launching our modern slavery awareness campaign, where we’ll be highlighting key issues within modern slavery and human rights, and how they can be combatted.

Our Modern Slavery consultancy team have a wealth of experience, spanning the built environment, healthcare, government, and more. Our consultants will be revealing their expertise in the field of modern slavery, delivering advice on how to approach key issues, talking to industry leaders, and showcasing their work within modern slavery and human rights.

This week we’ll be focusing on driving awareness of modern slavery in businesses and supply chains within the build environment. For this edition of In Conversation, we talk with Alex Minett, Head of Product and Market at CHAS, the UK’s leading provider of compliance and risk management solutions.

In 2021, CHAS collaborated with University of Nottingham Rights Lab to conduct a study on attitudes and behaviours of small and medium-sized businesses (SMEs) in relation to responses to modern slavery.

The following conversation took place between Alex Minett and our sustainable procurement and modern slavery consultant Anna Cantwell, discussing the findings of their study.

What prompted the study to take place?

Alex Minett: Modern slavery in the workplace is far more common than most people think — even in countries like the UK, which has strong labour laws protecting workers from exploitation.

Modern slavery is an especially significant problem in certain sectors, such as the construction industry. The Modern Slavery Helpline reports that construction saw more reports of modern slavery during the lockdown period than any other sector. Between March and September 2020, the helpline recorded 57 cases involving 209 potential victims.

As a risk management accreditation provider CHAS wanted to gain a better understanding of the levels of awareness and knowledge that SMEs in the UK have regarding modern slavery, so that we could develop resources to help CHAS members take concrete steps to address it.

What did you find interesting about the level of knowledge and perception of modern slavery of the SMEs who participated in the study?

AM: The research was conducted initially via online surveys completed by 231 CHAS member companies and then followed up with 12 structured interviews to explore the issues raised in greater depth.

74% of the respondents to the online survey operate within the construction industry, with the remainder working primarily in facilities management, manufacturing, care, or retail industries.

The findings taught us valuable lessons about how SMEs are currently addressing modern slavery in the construction sector. We found that awareness of the importance of addressing modern slavery is high among SMEs – with more than 90% of survey respondents reporting that they have either general or specific industry knowledge regarding modern slavery. It was encouraging to learn that only one respondent reported having never heard about this issue.

65% of the survey respondents also considered addressing modern slavery as being “important” for their businesses.

When working with clients, both large and small, we often find that modern slavery due diligence is an area of mixed maturity. Can you explain which measures of due diligence SMEs are actioning and not actioning?

AM: Our research findings mirror your experience in terms of mixed maturity and there is a real need for SMEs to move beyond policy to action.

It’s encouraging that the results showed high awareness of the need to tackle modern slavery, with 72% of respondents confirming they have implemented a modern slavery policy. However, just 39% of those surveyed said they were conducting due diligence to address this issue within their businesses and supply chains and have done so for more than six months.

What’s more, almost one fifth (17%) of businesses said their organisation has no intention to carry out due diligence in the foreseeable future, and 50% of respondents stated that they currently have no intention to measure KPIs related to modern slavery.

From reading the study, it is interesting that a high proportion of SMEs indicated that they recognised the benefits of taking action on modern slavery, however considerably fewer indicated that decisions and activities from their own company could help to address modern slavery. What did you find were the barriers for this?

AM: The research findings suggest that when it comes to drivers of anti-slavery action, there are many different factors that may come into play, including legislative and regulatory, operational and commercial, and reputational drivers to encourage business action.

The large majority of SME respondents indicated that having a modern slavery policy was actually often driven by the need to meet the specified requirements of their clients or contract proposals for which they are bidding.

However, it was interesting to note that 66% of participants said they do not feel pressure from the government and large businesses to address modern slavery, while 67% stated they do not feel pressure from consumers and other civil society actors to address the issue.

The paradox is that SMEs represent 99% of businesses in the UK. Their prevalence in the economy places them in a unique and critical position to respond to modern slavery.

However, current drivers for business action against modern slavery tend to focus on larger organisations. Section 54 of the UK’s Modern Slavery Act 2015, for example, only requires companies with an annual turnover of £36 million or more to report on the steps taken to address modern slavery in their operations. The government states that organisations falling below this threshold may choose to voluntarily produce a statement. At present, it is estimated that only around 17,000 businesses are captured by the legislation.

Lastly, how do you think SMEs can be better supported and incentivised to act?

AM: In terms of incentive to drive action, it’s clear that the government expects larger companies, legally required to comply with the Modern Slavery Act, to cascade responsibility down their supply chain in their commercial and operational activities and contractual relationships with businesses.

This helps drive the mandate for change, but SMEs often lack the tools and resources to respond to modern slavery; smaller businesses are more typically focused on survivalist strategy prioritising growth and economic responsibilities. The findings also suggest that behaviour change is needed so that SME leaders can be motivated and encouraged to engage in anti-slavery issues.

With the above in mind, CHAS are developing a range of resources to help educate SMEs about the importance of anti-slavery and what employers can do to prevent modern slavery in the workplace.

Interested to find out how we can help with modern slavery due diligence? Get in touch with our expert Anna Cantwell here.