Transparency in supply chains - extension: inclusion of Scottish public bodies - consultation

Extension of Transparency in Supply Chains (TISC): Inclusion of Scottish Public Bodies

1. Inclusion of Scottish public bodies in Transparency in Supply Chains (TISC) reporting

1.1 We are inviting responses to this consultation by 22 August 2022.

1.2 An 8 week consultation period has been set to allow responses to be analysed and provided to the Home Office ahead of the proposed publication of the UK Modern Slavery Bill in September 2022.

1.3 Please provide any responses on Citizen Space or send them to the Scottish Government's Human Trafficking team by emailing human.trafficking@gov.scot.

2. Introduction and Background

2.1 This consultation is seeking your views on proposals to extend the reporting requirements to Scottish public bodies for the publication of modern slavery statements as part of work to improve Transparency in Supply Chains. It also seeks your views on the mechanisms for this reporting and associated enforcement regimes.

3. Public Sector

3.1 Alongside commercial organisations, the public sector has a crucial role to play in addressing the risks of modern slavery in its supply chains, with £13.3bn of procurement spend annually across the Scottish public sector alone. Many public sector organisations have already started to identify and address the modern slavery risks within their supply chains and beyond, and the UK Government propose that public sector bodies be included in the formal requirement to publish a modern slavery statement. As per the requirements for commercial organisations, this would extend to public sector organisations with an annual budget – as opposed to turnover – of £36 million or more, unless they are already captured by the existing legislation.

3.2 This would include, for example, Central Government Departments, including the Scottish Government and devolved public bodies, local government bodies - including Local Authorities, NHS bodies and non-market and market public bodies (such as public corporations) - which meet the budget threshold.

4. UK proposals regarding Public Sector organisations

4.1 The below summarises some of the principal UK Government proposals upon which this consultation is seeking views, many of which stem from the 2018 review and will form part of the proposed UK Modern Slavery Bill announced on 10 May 2022. The UK previously consulted on these proposals in July-September 2019 and this consultation allows the Scottish Government to provide targeted questions to public sector bodies ahead of further policy development. Proposals include:

• Inclusion of public bodies in the reporting requirement for a modern slavery statement.
• The introduction of a single reporting deadline on which all organisations must publish their statement each year. This will improve the ease in which action across organisations can be compared, assisting in the monitoring of compliance and the provision of support to organisations.
• Mandating that the reporting of specific topics within the statement be compulsory to facilitate transparency.

5. Background

5.1 Section 54 of the Modern Slavery Act 2015 (Transparency in Supply Chains) stipulates that certain commercial and private sector organisations must publish an annual modern slavery statement.

5.2 This must be approved by the Board of Directors or equivalent, setting out the steps being taken to prevent modern slavery in their operations and supply chains.

5.3 Section 54 applies in Scotland and takes the form of a written statement which is published on the organisation's website or via the provision of written copies to anyone who lodges a request for access to the statement.

5.4 The criteria for this requirement include the business being UK-based and having an annual turnover of £36 million or more. Guidance for businesses in Scotland, regarding the risk of trafficking and exploitation in supply chains, was issued by the Scottish Government in 2018.

5.5 The Modern Slavery Act's transparency requirements and associated statutory guidance states that the following six areas may be covered as part of the statement:

1. The organisation's structure, its business and its supply chains;
2. Its policies in relation to slavery and human trafficking;
3. Its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
4. 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;
5. 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
6. The training and capacity building about slavery and human trafficking available to its staff.

5.6 At present, these are not compulsory reporting topics as part of the statement.

6. Independent review of the Modern Slavery Act

6.1 In July 2018, the Home Secretary commissioned the Independent Review of the Modern Slavery Act which, amongst other topics, reviewed the transparency provisions of the Act at section 54. This was undertaken by Frank Field MP, Maria Miller MP and Baroness Butler-Sloss.

6.2 The Review made a number of recommendations, including clarifying the scope of organisations required to report, increasing compliance, further embedding transparency requirements into business culture, improving reporting quality and, as outlined previously, extending the requirement to publish a modern slavery statement to public sector organisations.

7. Public Procurement

7.1 Given the substantial annual procurement spend across the Scottish public sector, procurement can play a crucial role in preventing slavery and human trafficking in the performance of public contracts and its supply chains. There are a range of measures in place to help tackle this issue through public procurement legislation and policy, as outlined in Scottish Procurement Policy Note 3/2020.

7.2 To help public bodies comply with procurement legislation and to optimise the economic, social and environmental outcomes of their procurement activity, national sustainable procurement tools have been developed. The tools and accompanying guidance take account of human trafficking considerations, including whether existing contractors have published a modern slavery statement.

7.3 The Procurement Reform (Scotland) Act 2014 places a requirement on contracting authorities which expect to have a procurement spend of £5 million or more in the next financial year to publish procurement strategies setting out how they intend to carry out their regulated procurements. These contracting authorities are also required to publish annual procurement reports after the end of each financial year, describing how their procurement activities have complied with their strategies.

7.4 This requirement aims to bring transparency and visibility to public procurement. Public bodies must address a series of minimum requirements, including a statement of their policy on the procurement of fairly and ethically traded goods and services.

7.5 Recognising the positive impact that public procurement can have has prompted the recommendation to extend the requirement to publish a modern slavery statement to public sector organisations. Some public bodies have been publishing modern slavery statements on a voluntary basis for a number of years, highlighting their approach and good practice in relation to human trafficking and exploitation.

7.6 Extending the requirement to publish a modern slavery statement to public sector organisations could be seen as an opportunity to improve the transparency and accountability already brought through procurement strategies and annual procurement reports.

8. Previous UK Consultations

8.1 The UK Government previously consulted on the Transparency in Supply Chains (July-September 2019) – this consultation included questions regarding the inclusion of public bodies. The response to this consultation was published in September 2020.

9. Handling your response

9.1 If you respond using the consultation hub, you will be directed to the About You page before submitting your response. Please indicate how you wish your response to be handled and, in particular, whether you are content for your response to published. If you ask for your response not to be published, we will regard it as confidential, and we will treat it accordingly.

9.2 All respondents should be aware that the Scottish Government is subject to the provisions of the Freedom of Information (Scotland) Act 2002 and would therefore have to consider any request made to it under the Act for information relating to responses made to this consultation exercise.

9.3 If you are unable to respond via Citizen Space, please complete and return the Respondent Information Form included in this document.

9.4 To find out how we handle your personal data, please see our privacy policy.

10. Responding to this Consultation

10.1 We are inviting responses to this consultation by 22 August 2022.

10.2 Please respond to this consultation using the Scottish Government's consultation hub, Citizen Space or to human.trafficking@gov.scot.

10.3 If you are unable to respond using our consultation hub, please complete the Respondent Information Form and send this to:

Human Trafficking
Scottish Government
GW, St Andrew's House
Regent Road
Edinburgh
EH1 3DG

10.4 The following questions are designed to find out your views on Transparency in Supply Chains and associated reporting requirements for Scottish public bodies and to offer you the opportunity to comment on the UK-wide proposals. These questions focus principally on the inclusion of Scottish public bodies in the requirement to provide a modern slavery statement and the associated reporting requirements and enforcement regimes.

11. Next steps

11.1 Where respondents have given permission for their response to be made public, and after we have checked that they contain no potentially defamatory material, responses will be made available to the public at Citizen Space. If you use the consultation hub to respond, you will receive a copy of your response via email.

11.2 These responses will then be provided to the Home Office to inform their wider consultation on Transparency in Supply Chains.

12. Comments and complaints

12.1 If you have any comments about how this consultation exercise has been conducted, please send them to the contact address above or at human.trafficking@gov.scot.

13. Scottish Government consultation process

13.1 Consultation is an essential part of the policymaking process. It gives us the opportunity to consider your opinion and expertise on a proposed area of work.

13.2 You can find all our consultations online on Citizen Space. Each consultation details the issues under consideration, as well as a way for you to give us your views, either online, by email or by post.

13.3 Responses will be analysed and used as part of the decision making process, along with a range of other available information and evidence. Depending on the nature of the consultation exercise the responses received may:

• indicate the need for policy development or review
• inform the development of a particular policy
• help decisions to be made between alternative policy proposals
• be used to finalise legislation before it is implemented

13.4 While details of particular circumstances described in a response to a consultation exercise may usefully inform the policy process, consultation exercises cannot address individual concerns and comments, which should be directed to the relevant public body.

Consultation Questions

Question 1:

Are you an organisation which currently voluntarily publishes a modern slavery statement?

Yes
No
Don't know

Question 2a:

Do you support the proposal for public bodies in Scotland with a budget of £36m or more to be included in the statutory reporting requirement for a modern slavery statement?

Yes
No

Question 2b:

If you have answered no to 2a, please provide further information.

Question 3a:

There is a proposal to introduce a single reporting deadline. Do you think this would be beneficial or detrimental?

Beneficial
Detrimental

Question 3b:

Please provide further information regarding your answer at 3a.

Question 4:

Please tell us what challenges you feel public sector organisations could face in producing a modern slavery statement?

Question 5a:

Current guidance suggests that statements cover the following 6 areas. Which of these do you think should become mandatory?

1. The organisation's structure, its business and its supply chains; YES / NO
2. Its policies in relation to slavery and human trafficking; YES / NO
3. Its due diligence processes in relation to slavery and human trafficking in its business and supply chains; YES / NO
4. 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; YES / NO
5. 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; YES / NO
6. The training and capacity building about slavery and human trafficking available to its staff; YES / NO

Question 5b:

Please provide further information regarding your answers at 5a.

Question 6a:

Do you think public sector organisations should be able to publish a group statement and respond collectively?

Question 6b:

Who do you think would be responsible for signing off a group statement? Please explain your answer.

If you are a public sector organisation please include any relevant examples of the group structure under which you might report and any information on who would be permitted to sign off such a statement.

Question 7:

Current guidance requires public sector modern slavery statements to be signed off by the accounting officer, chief executive or equivalent role, and approved by the senior management body.

What level of sign-off or clearance do you feel is appropriate for a modern slavery statement? Please explain your answer.

Question 8a:

Do you think that Scottish public sector organisations would face any challenges when publishing their modern slavery statement on the UK Government registry?

Yes
No

Question 8b:

If you have answered yes, please explain your answer.

Question 9:

What assistance do you feel would be appropriate to support public sector organisations in fulfilling the requirements of the modern slavery statement?

Question 10a:

One specific recommendation from the review was that the UK Government should strengthen its approach to organisations failing to comply with section 54 of the Act. The UK Government has subsequently announced that while the Home Office will maintain and monitor the government-run registry of modern slavery statements and use this to identify organisations who have not met the reporting requirements, a new single enforcement body will have powers to impose financial penalties against non-compliant organisations. This would involve a gradual and incremental approach to sanctions, from initial warning letters through to civil penalties. Such enforcement measures would commence no sooner than one year after any changes to the reporting requirements.

Do you think the application of civil penalties are an effective tool to increase compliance with the requirement to publish a modern slavery statement?

Yes
No
Unsure

Question 10b:

If you have answered no or unsure to 10a, what alternative mechanisms do you feel would be appropriate and effective?

Question 11:

Do you have any other comments on the proposals regarding Transparency in Supply Chains?

Question 12:

Are you content for your responses to be published?

Yes
No