On 30 September 2022, almost seven years after the introduction of the Modern Slavery Act 2015, standard 25700:2022¹ of the British Standards Institution (BSI) came into effect. This offers guidance and recommendations on organisational responses to modern slavery.

The standard, which applies to all organisations regardless of type, size and activity, recognises that drivers for tackling modern slavery can include an organisation’s values, legal and regulatory factors, investment, customer pressure, stakeholder expectations and the opportunity to build a positive business reputation.

In response, it provides a practical roadmap for businesses seeking to navigate the complex modern slavery landscape through a strategic approach to operational exposure by understanding modern slavery risks and managing and reducing them in their operations, supply chains and wider operating environments.

Although the standard is not legally binding and following it will not give a business immunity from existing legal obligations, as explained below, it is likely that the courts will have regard to it in relevant cases.

As such, senior managers and legal and compliance teams would do well to familiarise themselves with the standard to help them manage risk relating to modern slavery.

In this four-part series, we explore the key takeaways from the new standard.

This first part deals with contextual risk management. Part 2 will set out key expectations in the standard for senior managers and legal and compliance teams. The third part will offer further detail on some key measures, systems and controls set out in the standard. Finally, the last part will consider the standard’s approach to responding to incidents of potential modern slavery.

Key factors to be considered

The standard focusses on what it refers to as ‘contextual risk management’, encouraging a proportionate approach to organisational responses to modern slavery which is intimately informed and guided by the specific setting in which a business sits. For example, it encourages businesses to consider key factors that can increase the risk of modern slavery, including:

– Geography.
– Labour market structure.
– Work migration.
– Discrimination.
– Long/opaque value chains (as with anti-bribery compliance (ABC), more complex business models can restrict governance and oversight and make it more difficult to use positive influence/leverage to address potential issues).
– Corrupt business practices.
– Involvement of vulnerable workers/groups.
– Supply chain volatility (as with ABC, short-term, frequently changing relationships can affect transparency and affect the business’ ability to ensure responsible supply chain behaviour, as well as encouraging an emphasis on responsiveness and supply chain continuity over due diligence, scrutiny/monitoring and compliance).

The standard suggests that businesses should reflect on their external and internal contexts as part of this process. External context, for example, includes: the location of operations; social, cultural, political, legal, regulatory and economic factors whether international, national, or local; external stakeholders and their expectations; applicable market conditions; and the laws of countries in which products/services are manufactured, distributed, supplied and consumed, whereas internal context includes factors that are substantially in the control of or subject to the authority of the organisation through its governing and management systems.

In addition, the standard frames identifying all stakeholders of relevance to their modern slavery strategy and approach as part of a business’s duty of care.

The standard also expects businesses to identify their human rights and modern slavery compliance obligations and have policies and procedures in place to fulfil them. For example, this includes maintaining a central risk register, monitoring new compliance and modern slavery risks, and incorporating them into the risk register and contractual agreements – as well as keeping in mind obligations and social licenses to operate in settings where law and enforcement might not effectively protect minimum human rights standards.

An ongoing process

Organisational context is also presented as critical in modern slavery risk management, which should be an integral part of a business’ management and decision-making. Identifying risks should be an ongoing process applied to normal activities, day-to-day fluctuations, planned changes and matters across the upstream and downstream supply chain. Risk management should be supported by communication, consultation and engagement with stakeholders. Businesses are instructed to periodically risk-assess activities, products, services and relevant operational aspects (including outsourced third-party and wider value chain processes) as well as whenever material changes in circumstance or organisational context take place.

According to the standard, supply chain mapping should be used to identify at-risk areas and assist with understanding and overseeing all tiers of the supply chain, together with risk analysis. The results can then be compared against the business’ risk criteria so that risks can be prioritised, to allow the business to consider where action is required (risk evaluation).

The outcome of risk evaluation is to then be recorded, communicated and validated at appropriate organisational levels. In line with the wider approach of the UN Guiding Principles (UNGPs) for business and human rights, the saliency of a risk should it occur should also be taken into account when prioritising modern slavery risks by considering the scale, scope and remediability of an event should it take place (with a view to the risk to people rather than business).

As modern slavery can be linked with bribery, the standard also encourages businesses to ensure that third parties they control implement either the business’ anti-bribery management systems, or their own anti-bribery controls (to a reasonable and proportionate extent).

More detailed instructions set out steps to take in connection with suppliers and contractors depending on the assessed risk of bribery. For example, where the risk is moderate or high, businesses should ensure that their associates commit to preventing bribery in connection with relevant projects, transactions, activities or relationships, and are able to terminate the relationship should such bribery occur.

Legal status

Modern slavery generally refers to a set of specific legal situations of exploitation that a person cannot refuse or leave due to threats, violence, coercion, deception and/or abuse of power.

This area may engage applicable criminal offences and human or labour rights violations, and is also dealt with in core international frameworks such as the UNGPs on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the sustainable development goals.

Following the standard will not provide a business with immunity from existing legal obligations. Rather, the standard aims to complement existing frameworks by providing guidance to businesses seeking to reduce legal and non-legal risk.

That said, the English courts could well take account of the standard should a relevant case be brought (and noting the emerging body of case law involving communities impacted by alleged abuses in the global supply chains of Western-headquartered businesses, often with support from third-sector organisations, this is within the realm of possibility).

In fact, other standards have already been considered in this way by the courts.

Applying the case law

In Governors of Hospital for Sick Children v McLaughlin & Harvey Plc 10 ConLR 25, it was noted that “British Standards Codes of Practice are not legal documents binding upon engineers or upon anyone else, but they reflect the knowledge and expertise of the profession at the date when they were issued. They are guides to the engineer and in my view they also provide strong evidence as to the standard of the competent engineer at the date when they were issued” (also referred to in Richard Clapham, Gemma Clapham v Malcolm Peacock t/a Allflames [2018] EWHC 518 (TCC)).

The judge in Ward v Ritz Hotel (London) Ltd [1992] Lexis Citation 3704 (which also quoted the above), further held that although the British standards were not legally binding, they were a guide which provided strong evidence as to the consensus of professional opinion and practical experience as to sensible safety precautions at their date of issue².

This approach was referenced favourably in 2 Entertain Video Ltd v Sony DADC Europe Ltd [2021] 1 All ER 527, and Japp v Virgin Holidays Ltd [2013] EWCA Civ 1371.

Further, in Green v Building Scene Limited and Another [1994] PIQR P259, which involved an individual who was injured when falling down a stairway, Staughton LJ noted: “Looking at a photograph of the stairs, I would myself form the view that they are reasonably safe […] But it is a fact that the stairs did not comply with the Building Regulations, or the relevant British Standard. That is evidence which we must certainly take into account. It represents the current professional opinion as to what is desirable in order that accidents should be avoided”, (although he then noted): “But it is one thing to lay down regulations and standards, with that objective, and another to define what is reasonably safe in all the circumstances of a particular case.”

In Wray (A Minor) v Derry City and Strabane DC [2020] NIQB 39, the court also had regard to the fact that a fence (involved in injury to a trespasser who had scaled it) was “perfectly legal and conformed with British Standards”.

Balancing risks

In light of these cases, although the standard will not be legally binding, it is clear that the courts are likely to either have regard to it, or at the very least consider taking it into account, in a relevant case.

On this basis, it would be wise for senior management, legal counsel and compliance teams to be aware of the points set out in the standard to assist in considering how to balance risk relating to modern slavery in supply chains.

We hope that this series of articles will assist businesses seeking to stay up to date and get to grips with these challenging issues.

For further insight or support in this area, please reach out to Michael O’Kane, Maria Cronin, Andrew Wallis and Julia Steinhardt.

Footnotes

¹ The standard was published by BSI Standards Limited, under license from the BSI. The BSI is the national body responsible for preparing British standards by bringing together business and industry, government, consumers and others to build standards-based solutions.

² Per McCowan LJ: “Mr McDonnell submits that the judge gave too little weight to the British Standard, and I agree with him. As he says, they represent the consensus of professional opinion and practical experience as to the sensible safety precautions. How much weight they attach to them is shown by the words which I have quoted used in the laying down of the Standard.”

Also in this series

– Part 2: British standard on modern slavery: key expectations for legal, compliance and senior management

– Part 3: British standard on modern slavery: key systems and controls

– Part 4: British standard on modern slavery: incidents and remediation