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Half of qualifying organisations fail to meet Modern Slavery Act deadline

Presenting their findings at Westminster this week, along with progress updates from other organisations, the world’s only Open Data anti-slavery register highlighted ‘the Good, the Bad and the Ugly’ of compliance with the Modern Slavery Act section 54.

The TISCreport team were able to provide an in-depth snapshot of the progress in this first year of operation, using their dynamic data-system to generate a full breakdown of compliance by sector, in addition derive a list of known overdue organisations, which has been made available to UK Government Departments.

Overall compliance with the legislation to date
In terms of compliance with the Act the overall finding is that half (50.6%) of the 2867 organisations who are now due to have published have not done so, in spite of having had over 12 months to prepare. Only 15% (2867) of those who meet the MSA requirement criteria are actually due to have published their statements by this point since the legislation requires this to be done within 12 months from their individual year-end date*. Of those due a total of 1418 are in compliance and covered by published statements whilst 1449 are overdue. Conversely some 3860 qualifying organisations who were not yet due under the legislation have published ahead of time bringing the total number in compliance to 5278.

In the UK a total of 18,945 organisations have been identified by the TISC team as subject to the provisions of the MSA legislation, namely with over £36M turnover of which 27% are in compliance a figure boosted considerably by the extra 3860 organisations who have filed in advance of their required deadline. The numbers both in and out of compliance are increasing rapidly at this stage with the remaining 13,667 required to have published in the next six months, by April 2018.

“The overall number of overdue non-compliers is a little disappointing after all the hard work done by so many to communicate the MSA requirements and aims. It shows we all have more work to do in helping organisations to understand their obligations, especially those sectors who are not confident in complying” says Jaya Chakrabarti CEO of TISCreport. She adds “On our website have created a simple-to-use statement builder tool with prompts to help those who are not quite sure what to do so they can create statements with confidence. In addition CIPS also have a terrific selection of advice and guidance free on their website”.

Jaya continues “On the other hand, many companies who were not affected by the Act as they do not meet the turnover criteria, such as Bristol Energy, have gone ahead anyway filing statements even though they don’t have to simply because they are committed to ethical practices. It is really heartening to see these ‘good actors’ coming out in the data and shows that people really want to help eliminate slavery and take action when they have a method to do so”

Further effects of MCA outside the requirement for compliance
The register is the largest repository of MSA compliance status information and contains live data covering over 80K organisations with statements globally. Of these 26,446 are UK registered, many of which are not required to comply under the legislation criteria.

All 80k organisations are covered by statements via 4915 individual separate statement documents since ‘groups’ often simply file one document to cover all their subsidiaries. This means that many organisations who are not required to comply because they fall below the Acts specified turnover threshold are nevertheless covered by statements. In this way the Modern Slavery act has already had a far-reaching global impact with four times as many organisations as are required to in law taking steps to examine all their supply chains in order to produce statements.

Compliance data analysis by sector (for qualifying organisations)
In a drill-down comparison of the compliance by sector, considerable differences were revealed with the top performing sector achieving more than three times the compliance of the lowest performer over the same time period. This difference perhaps reflects each sector’s awareness and understanding of their responsibilities under Modern Slavery Act legislation, and certainly indicates where awareness campaigns would productively be targeted.

The Good
The best complying sectors were, perhaps surprisingly, the Accommodation and Food Service sector and the Agriculture, Forestry and Fishing sector where 70% and 66% of organisations meeting their required deadline for publication.

The Bad
The Education sector was significantly the worst with less than a quarter (23%) in compliance and the vast majority failing to publish by their deadline. This back-runner was followed by the relatively small Public Admin/Defence/Compulsory Social Security sector and Real Estate sector running at only 30 and 29% respectively.

and the ugly… …
The evaluation has, also revealed that there is a small but significantly wealthy end of the company spectrum who don’t have websites or phone numbers publicly available and you can only really contact their auditors (who are listed in Companies House). The auditors we’ve talked to have assured us that whilst they don’t do anything directly on actual MSA compliance, it is on their checklist to go through with their clients. If that’s the case then we have uncovered a group of companies who have made conscious decisions to deliberately not comply because they do not perceive consequences great enough to compel them to do so.

Various reasons for non-compliance given to TISCreport researchers by qualifying companies and range from genuine lack of awareness to alarming lack of concern;
One stated – “Problem is I can’t function my business, if I get rid of everything made by slave labour.” One company CEO apologised for being three months late having been on holiday (apparently no one else in his 36M+ turnover company could attend to it in his absence). Other organisations did not realise they had a supply chain “We don’t have a supply chain” (they did).

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