Modern Slavery in the Travel Industry

Mention the Modern Slavery Act 2015 to most companies and the immediate reaction is that this is nothing to do with them.

Modern Slavery in the Travel Industry

Mention the Modern Slavery Act 2015 to most companies and the immediate reaction is that this is nothing to do with them.  The title of the Act does not help.  There remains a lack of appreciation that "modern slavery" is less about the sale and purchase of human beings and more about the criminal coercion of vulnerable individuals.  Human trafficking and forced and child labour are more recognisably modern issues.  These are included within the definition of modern slavery alongside slavery and servitude in the traditional sense. 

The second reason for doubting the relevance of the legislation is a lack of appreciation of its global reach.  The Act requires large companies to report on steps taken to ensure that slavery is not occurring within their business and within their supply chains.  This is specifically designed to include supply chains which begin across the World.  Most companies are confident that there is no modern slavery in their business but far less confident that there is no modern slavery in their suppliers' businesses or their suppliers' suppliers' businesses.  With 35 million people estimated to be in modern slavery globally, there are good reasons for that lack of confidence – those individuals must be working in someone's supply chain.

The Act applies to all sectors including the travel sector.  Indeed the travel sector needs to be particularly concerned because (a) many travel companies have supply chains in regions of the World where slavery is likely to be more prevalent than in the UK (b) the travel industry has low skilled roles (cleaners, kitchen and maintenance staff) which are susceptible to "cheap labour" (b) travel companies sell to the public, have a high profile, and are therefore more vulnerable to a campaign that exposes slavery in the supply chain causing reputational damage. 

Slavery is, by its nature, hidden and difficult to identify.  Particular areas of risk according to the Global Slavery Index published by the Walk Free Foundation are India, China, Russia, Pakistan and Uzbekistan in terms of total numbers affected.   In terms of percentage of population, the highest risk countries are Mauritania, Uzbekistan, Haiti, Qatar, India, Pakistan, DRC, Sudan, Syria, CAR, Rep of the Congo and UAE.  However, the index ranks 167 countries and although numbers are much lower in Western Europe, modern slavery is still a problem.

The question for senior leaders in travel companies is how confident are you that there is no modern slavery in the hotels, airlines and local tour operators providing the services that you are packaging for your customers?  Who is working in the kitchens, or cleaning the rooms or guarding the security?  What steps have you taken to ensure that none of those individuals are victims of forced or compulsory labour?

For businesses, the most important provision in the Act is contained in section 54 which came into force on 29 October 2015.  You may see or hear this referred to as the TISC (transparency in supply chains) provision. The TISC provision requires large businesses to state publicly each year the steps (or the lack of steps, if nothing has been done) taken to ensure that slavery and human trafficking is not taking place in any of the organisation's supply chains, and in any part of its own business.  The requirement to produce a statement applies to financial years ending on or after 31 March 2016.  A company must publish an annual statement if it falls within the definition of 'commercial organisation' which is:

• a body corporate – wherever incorporated;
• carrying on business or a part of its business in the UK;
• which supplies goods or services; and
• has a minimum total turnover of £36 million per year.

There are no prescribed time limits by which a commercial organisation must publish its statement. However, the Home Office guidance states that a company should publish its statement as soon as reasonably practicable after the end its financial year; may decide to publish the statement alongside its annual or non-financial reports; and is encouraged to report within six months of the financial year end to which the statement relates (i.e. a 31 March year end would mean that the first statement would be due by 30 September 2016).  The statement must be approved by the company's board of directors and signed by a director.  It must then be published on its website, including a link to the statement in a prominent place on the homepage.

A statement must list the steps the company has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains and in any part of its own business (or state that no such steps have been taken). The statement does not have to be in a specific form or length.  It may, (but does not need to) include information about:

• the company's structure, business and its supply chains;
• its policies in relation to slavery and human trafficking;
• any due diligence processes in relation to slavery and human trafficking in its business and supply chains;
• the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
• its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate; and
• training about slavery and human trafficking available to the company's staff.

The UK's Secretary of State may enforce the duty to prepare a statement in civil proceedings by an injunction (which if not complied with, in turn, is punishable by an unlimited fine). Aside from statutory sanctions, the main consequence may be damage to a company's global reputation and brand.  Those businesses with turnover of less than £36 million can still be affected by negative publicity.  However, the bigger travel companies that are caught by the TISC provision have a particular responsibility at least in the eyes of the UK Government.  Those that ignore or take a minimalist approach to the legislation run the risk of fostering modern slavery and being called to account by journalists and NGOs.  On a more positive note, the legislation provides an opportunity for ethical companies to help reverse the tide on human exploitation and can make a virtue of their efforts when promoting their brands.