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Modern slavery: identify the risks your SME could be exposed to

Even small businesses can be affected by modern slavery issues. Here’s how to help eradicate forced labour and human trafficking from your business or supply chain.

Last updated: 08 Sep 2021 4 min read

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  • Modern slavery can happen in any walk of life, in all sectors and industries
  • It’s important to remember that it can affect even legitimate businesses, small and large
  • The anti-slavery charity Unseen records labour exploitation in industries as diverse as construction, hospitality, beauty, agriculture and logistics
  • Guaranteeing ethical supply isn’t exclusive to large businesses; SMEs should also know who they’re working with and learn which questions to ask
  • Large businesses with a turnover of £36m have a requirement within the Modern Slavery Act 2015 to publish a modern slavery statement
  • Corporates are looking for assurance from SMEs in their supply chain that they know and understand the risks of modern slavery
  • Taking appropriate steps to reduce the risk of exploitation for your workers could build your brand’s reputation and even win you business

What is modern slavery?

Modern slavery – the illegal exploitation of people for personal or commercial gain – is a serious crime and an abuse of human rights. It is defined in the UK’s Modern Slavery Act 2015 as comprising the offences of slavery, servitude, forced or compulsory labour, and human trafficking. It can exist in any supply chain, any industry and any workplace, and it’s happening in the UK. 

All businesses are vulnerable to modern slavery occurring within their operations. At NatWest Mentor, we describe it as a well-hidden crime. And, without appropriate precautions, modern slavery can occur without the business owner knowing.

The Modern Slavery Act sets out a range of measures on how modern slavery and human trafficking should be dealt with in the UK. Section 54 requires businesses with a turnover of £36m or more to publish an annual statement setting out the steps they have taken to prevent modern slavery in their business and supply chains. Where no steps have been taken, a statement must also disclose this point.

Legislation is predicted to tighten further in the future. According to professional services firm PwC, the Home Office is considering a range of options to boost compliance and strengthen reporting, including more punitive sanctions for corporate compliance failings.

As part of their due diligence, large companies are scrutinising how SMEs in their supply chain, or those bidding for contracts, are demonstrating that they are managing risks effectively. If you apply for a government contract, you will also have to prove how you are protecting workers. 

“We’re not just talking about modern slavery or labour exploitation happening in unscrupulous businesses; it’s happening in legitimate businesses as unscrupulous people infiltrate supply chains” Justine Currell, CEO, Unseen

Consumers, investors, and non-governmental organisations are increasingly likely to apply pressure where they believe a business has not taken sufficient steps to reduce the risk of exploitation for their workers. 

Modern slavery can affect any business

Over 50% of calls to the helpline of anti-slavery charity Unseen are related to labour exploitation. “We’re not just talking about modern slavery or labour exploitation happening in unscrupulous businesses,” says CEO Justine Currell. “It’s happening in legitimate businesses as unscrupulous people infiltrate supply chains.

“One consequence of the pandemic has been an increase in buying goods and services online, leading to real growth in the logistics sector, for example. More people are contacting Unseen to say they feel exploited and abused in that sector. It’s something we really need to think about not only from a business perspective, but from an individual perspective as well.”

Simple recruitment steps to protect your business from modern slavery

  • Make sure your frontline staff and those responsible for recruitment know and understand the legal requirements around appropriate right-to-work checks.
  • If you use temporary labour, speak to the recruitment agency and make sure they’re undertaking appropriate due diligence.
  • Embark on training: awareness raising is key to getting people to understand that this is an issue that happens everywhere. 
  • Ask yourself: Does the person you’re employing have their own bank account? 
  • Have they got their own mobile phone number?
  • Do they live at an address where you know they are happy to be living? 

How to identify exploitation in your supply chain

“First and foremost, know who you’re working with, both up and down the supply chain, because the easiest way for your business to be inadvertently and indirectly affected is by somebody else not taking the appropriate steps,” says Justine. 

When you’re working with others, ask questions. And don’t just ask them once, make sure you engage and interact, so you know if something changes further down your supply chain and if it has become an increased risk. 

The business benefits of tackling modern slavery

Although SMEs are not under any legal obligation to publish a modern slavery statement, businesses are expected to act now. Those that are proactive can benefit by:

  • protecting and enhancing their reputation and brand
  • protecting and growing their customer base as more consumers seek out businesses with higher ethical standards
  • boosting investor confidence 
  • seeing greater staff retention and loyalty based on values and respect
  • developing more responsive, stable, and innovative supply chains

“I think people assume that by taking further action, you’re going to reduce your profits – but that’s not the case,” says Justine. “It’s brand building; but it can also be damaging to your reputation if you don’t take action.”

For more information about modern slavery, visit the Unseen website or GOV.UK.

Modern slavery

is a difficult and complex issue. NatWest Mentor is keen to support and educate SMEs to help them reduce risk and understand where they can go for further information and support. To find out more about our services, visit

natwestmentor.co.uk
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Workforce support. NatWest Mentor, Leadership and Management