Wiki Rate Project – UK Modern Slavery Act Company Reports
Name: Huda Wajih
Company inputted: Dell
Company input you peer-reviewed: Elliott Group Limited (referred in the document as ‘Elliott’)
Part 1: Reflections on the company reports.
Homepage/Sign: Dell seemed to have met the requirements of the law, such as publishing of the statement on the home page and signing of the statement by the directors. In contrast to that, while Elliott did have its statement accessible on its home page, its report was not signed. Therefore, it seems that Elliott did not meet all the requirements set in the act.
Section 54(5): Along with looking at the requirements, it was also interesting to observe and compare the two companies on section 54(5) of the act, which provided suggestions on the information that the organizations could share in their statements. One positive thing I noticed about Dell was that it did not give a lot of background about their organization’s structure (5a) and focused more on their policies to identify end modern slavery in their organization (5b). In contrast to that, Elliott spent almost half its report on their organization’s structure, their business and their supply chain. While providing the background has its advantages, their statement was already a short one and the inclusion of the structure and business they conducted seemed to be an easy way to fill the page, rather, than providing more substantive information. Dell also seemed to provide more specifics on content suggested in c-f of section 54(f). For example, the act suggests to provide information on steps the companies have taken to assess and manage risk of modern slavery in their supply chains. Elliot gives a generic statement and mentions that it has ‘systems to identify and assess potential risk areas in our supply chains’ whereas Dell provides more information on these systems and explains its internal assessment, audits and supplier certification procedures.
To provide with more information, both organizations included links to their other documents, such as supplier guidelines and reports. Here too Elliott’s supplier guidelines seemed to merely state their commitment again, while Dell provided a link to its yearly Supply Chain Social and Environmental Responsibility report, which provided concrete information on other efforts taken on their part. For example, they mentioned in the report that they have an executive review board that reviews allegations related to child or forced labor. Along with that, they also provided some more specifics of their risk assessment tools, discussed survey results of their company employee’s understanding of their environmental and social responsibility processes and showed audit assessment results of various human rights issues such as non-discrimination, working hours and prevention from de-grading treatment. While these assessment and surveys are not limited to the issue of human trafficking, they are still a mechanism that provides more information on standards used by Dell to measure these issues, which is more than what Elliott provided.
Year of statement: I also noticed was that the statement for Dell was for this year but Elliot’s latest statement is for 2016. This made me think about the deadline for submitting statements. The law states that a statement for each financial year must be prepared but I was not sure while reading the law if there was a specific deadline before which they had to be made public. In Elliott’s case, it is possible that the deadline for 2017 hadn’t approached and Dell was proactive in sending their statements, or the deadline passed and Elliott did not submit theirs or that they did but it is not available on wikirate yet.
Grievance mechanism/Training: Lastly, I noticed some positives for both companies, which is that they both have a grievance mechanism in place to facilitate whistle-blowing and both are training their staff on detecting signs of slavery and human trafficking. While neither company gave details on what the grievance mechanism was or training mechanism was, they at least had those mechanisms in place, which is a good first step.
Part 2: Evaluation of the metrics.
I found it interesting how the metrics on Wikirate started from being more generic (and the ones mandated by law) and then moved on to being specific. The initial ones included questions on whether or not the statement was signed and/or was present on homepage. These metrics have clear advantages. For example, even if it is a formality, the company’s board of directors or CEO would probably not want to sign off on a weak statement and it is likely that they would read the statement before they signed off on it. This would mean that even if they haven’t done anything to combat slavery in their organization, this issue would come to their notice, which is a good initial step. Secondly, by asking that the company put their statement on their homepage, the act ensures that it is easily accessible to the public. This can help in encouraging better practices as companies would not want to damage their reputation by publicizing a weak statement or violating their own policy.
Another good quality about these two metrics is that they are comparable across companies and I could compare Dell to Elliott on these metrics. For example, Dell had two hand signatures of board directors while Elliott only had name written of the Chief Executive Officer, without any hand signature. This could suggest that Dell’s board had a more personal involvement in the approval process than Elliott’s. The other metric is comparable as well and they both had their statements on the homepage. Had one of the companies not put their statement on their homepage, it could have suggested that that company was relatively less transparent about its practices to its customers.
The metrics that were presented towards the end were more substantive, but they were voluntary under the law and were mere suggestions, due to which these companies did not report on some of them such as company’s KPIs or corrective steps taken in response to modern slavery incidents. Another issue for these metrics could be the comparability across companies. For example, when looking at the responses of companies on the question of the filing approach for grievances, I noticed that some had figures in thousands while some only had double-digits. This made me wonder how they reported on the metric and how actually grievance is defined within the organization. This lack of standardization can make comparisons across companies hard or sometimes, even meaningless.
However, despite some shortcomings, Wikirate and these metrics provide companies with an incentive to improve their practices. It can also instill competition between companies as they would want to get a better score than their competitors. This can prove to be beneficial in improving companies’ responses to the very prevalent and important issue of modern slavery.
Part 3: Reflections on the effectiveness of mandatory disclosure laws. Having examined two company reports using Wikirate, what are your thoughts on the effectiveness of the UK Modern Slavery Act, and mandatory reporting more generally? Explain.
Mandatory Reporting: In general, mandatory reporting can be more effective than voluntary as it provides with specific standards that all companies must disclose, rather than companies picking and choosing the ones that are easiest to report on. It can also provide with standards that are comparable, such as whether or not a company has a link to the statement on their home page. However, since it is not voluntary, it can be a nuisance for the company and also for the state as due to a high volume of reports, analyzing all mandatory reports can become a challenge.
UK Modern Slavery Act: The law requires a commercial organization to make a statement and publish it on its website, or provide a copy of it to anyone who makes a written request for one. This can encourage companies to improve their processes and conduct due diligence in their supply chain as they would know that the public is knowledgeable about their actions and they would want to portray a positive image to their customers.
However, while it is a mandatory law as and all commercial organizations (that fit the criteria) must formulate and publish an anti-slavery statement, it has certain elements of voluntary reporting as well because the content of the statement is left on the companies to decide [Article 54(5)] and the organizations can use any metrics to report their progress. In fact, even if the company doesn’t have any steps to identify modern slavery in the organization and they submit a statement stating as such, they are still in compliance with the law.
While I understand the difficulties in establishing standardized metrics to measure human rights violations, the modern slavery act could have been an opportunity to at least identify some metrics that were mandatory to include in the report. For example, rather than stating that the companies may mention their risk assessment metrics, or disclose their performance metrics or KPIs, the law could have directed that they must. A comprehensive guidance to companies on what and how to disclose their practices could have given companies a clearer direction on what areas to focus on and could have also provided citizens with a standard on which they could compare the effectiveness of various companies’ policies. This could also have been done in a way that was not too stringent. For example, while the law could mandate reporting on risk assessment, the metrics could be formed by the company. Similarly, it could be mandatory for the companies to disclose their KPIs, while it could be left at the company’s discretion to formulate those metrics.
Another thing I noticed about this act was that some of the suggestions in Article 54(5) were too broad and were not directly related to the issue at hand. For example, Article 54(5a) suggests that the company can provide information about their organizational structure and their business. This is what Elliott did and rather than providing concrete information on issues that are substantively focused on slavery and human trafficking, little under half their report included their organizational structure, information about their business and supply chain. While this information, especially about the supply chain- can be a good way to provide a background about the organization, these are usually the information readily available on the front of their homepage. It seems that the act’s ‘suggestions’ have provided companies with the opportunity to pick and choose the ones they find easy to disclose and not fully comment on the ones that might portray them in a negative light.