Given the challenges being faced by the food and drink sector, the risk to retailers, manufacturers and others of being exposed to modern slavery in their supply chain is particularly high.
Major food and drink businesses are now acting to address the increased risks. For example, earlier this month, a group of leading UK supermarkets formed a task force to fund audits of recruitment companies licensed to hire agricultural workers, in order to "help mitigate risks of worker exploitation” and “to improve worker welfare”.
What is modern slavery?
Modern slavery is a serious crime in which victims are exploited for someone else’s gain.
Modern slavery can take many forms including trafficking of people, forced labour and servitude. On average, more than 10,000 potential victims of modern slavery are identified in the UK each year.
Modern slavery risk affects almost all businesses, although certain sectors, including food and drink, are at a higher risk than others, due to the nature of their operations, suppliers and/or workforce.
What are current modern slavery risks for food and drink businesses?
Businesses across the UK are experiencing labour shortages. 13.3% of businesses surveyed by the ONS in November 2022 said they were experiencing a shortage of workers, with accommodation and food service businesses reporting the highest percentage of shortages (35.5%) out of all industries surveyed. With increasing labour shortages comes increased modern slavery risk.
Risk levels are also enhanced by the increasing cost of a variety of staples and foodstuffs, and the associated pressure placed on cost-margins. That is particularly so given the significant reliance within the food and drink sector on international supply chains (including in sourcing of ingredients).
What can food and drink businesses do to mitigate the risk?
There are key steps that all food and drink businesses can prioritise to protect against the risk of modern slavery in their supply chains:
- Ensure a zero-tolerance culture – make a top-level commitment to prevent modern slavery in supply chains and ensure a "zero-tolerance" approach is communicated to employees, partners and suppliers.
- Policies and procedures – maintain an adequate compliance framework setting out how the business manages modern slavery risk.
- Modern slavery statement – businesses with a turnover of £36 million or more need to publish an annual modern slavery statement setting out the steps taken by them in relation to modern slavery risk. Businesses with a turnover of less than £36 million are increasingly choosing to publish modern slavery statements to demonstrate to the market, and to their customers, a responsible approach to modern slavery risk.
- Training – ensure that employees, particularly those involved in dealings with suppliers or partners, have sufficient training to identify indicators of modern slavery, and that they have mechanisms for concerns to be reported and investigated.
- Due diligence – keep suppliers under review and seek to understand: (i) the sources of labour supply and (ii) the steps taken by suppliers to protect against modern slavery risk. Suppliers who may represent a particular modern slavery risk – for example because they rely on employment agencies or gangmasters for supply of labour – should be subject to enhanced scrutiny.
- Contractual protections – make provision in contracts with suppliers and partners in relation to the maintenance of adequate protections against modern slavery.
If you have any questions about how to manage modern slavery risk or the steps to be taken if concerns around modern slavery arise, please do not hesitate to contact the Corporate Crime and Investigations Team at Brodies.