Transparency in Universities Supply Chains: BHRE Comparative Report

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By Patrycja Krupinska

The BHRE has produced its comparative report titled ‘UK Modern Slavery Act 2015 Transparency in Supply Chains: The Second Year of Reporting by Universities,’ as part of our Research Series Reports. The report presents our findings and qualitative analysis conducted on 98 modern slavery statements produced by universities in the second year of reporting for the financial year 2016-17.

The purpose behind our research was to draw a comparison between modern slavery statements produced by universities in the first year of reporting versus statements produced in the second year of reporting. To view our first report click here.

Reporting universities have mainly been directed by the Act and the government guide to produce their statements. A government guide titled ‘Transparency in Supply Chains etc. A practical guide’ was published with the intention of providing explanation how businesses should comply with the MSA as well as lay out expectations for modern slavery statements and guidance on what best practice looks like. 

Section 54 of the MSA 2015 requires commercial entities to report annually on their actions to identify, prevent and mitigate modern slavery in own supply chains. Commercial entities have been defined in the Act as suppliers of goods and services with a total annual turnover of £36 million or more. As most universities’ turnovers are in the hundreds of millions of pounds their reporting is significantly important. Only one university which has not met the threshold in the financial year 2016-17 has been identified however as many universities have not published their turnover numbers this figure could potentially be higher.

The deadline for universities reporting and our first set of data collection was the 31st January 2018. We found that up to this date only 63 universities have reported for the financial year 2016-17 which is a decrease in the number of reporting universities from last year. However, In May 2018, with the help of the Higher Education Procurement Association (HEPA) we analysed a further 34 statements, which had been published after the deadline. The increase of reporting was due, in part, to the featuring of our research in Research Professional (see Universities Failing to Disclose Slavery Risks, 19th February) and HEPA´s communications to universities regarding their modern slavery reporting obligations. 

From the data collected by the BHRE it is apparent that not many universities recognise the requirement to report annually. In the case of entities which have reported in the first year, this could be because no changes or minor changes were made, however, by not reporting each year an entity is not complying with the requirement of the Act. Our research so far has found that 115 universities have reported so far and 2 universities have either not published a statement or not made it accessible to the public.

Our comparative report findings have revealed mixed results over the six criteria that paragraph 5.2 of s.54 of the Act has suggested universities should report on. This criteria provides a non-exhaustive list which includes: organisational structure, its business and supply chains; its policies relating to slavery and human trafficking; its due diligence processes; the parts of its business and supply chains where there is a risk of slavery and human trafficking, and the steps it has taken to assess and manage that risk; its effectiveness in ensuring that slavery and human trafficking is not taking, measured against such performance indicators as it considers appropriate; the training and capacity building available to its staff.

When comparing statements by looking at the first criteria the general trend we have found is that although we have passed the second year of reporting there has not been any significant improvement in reporting on this criteria. Effective reporting can only be achieved if organisations have good knowledge and understanding of their own supply chain and how their organisations are structured.

The criteria of policy has certainty become one many universities have considered over the two years since the Act has come into place and where one does not already have a standalone policy in place or embedded modern slavery and human trafficking into existing policies there are certainty plans to do so in the coming years with some already taking preliminary work.

Due diligence is the most reported on criteria with only two universities, out of the 98 universities reporting the second year, not reporting on this. The general trend is that in the second year of reporting the greater majority of universities, both those reporting for the second and for the first time, have provided more detail on their due diligence processes and measures explaining how they conduct due diligence rather than simply saying that measures and processes are in place. However, our research also revealed that a significant number of institutions are still not aware of the impact that their purchasing decisions may be having beyond their own gates.

The first step in adopting effective due diligence processes should be to identify potential risks within the supply chain. There is increasing effort in universities conducting risk assessment however most still tend to prioritise implementing new due diligence processes before identifying risks. This isn’t good practice and only a small number of universities seem to have prioritised risk assessment over implementing new due diligence measures.

The government guidance encourages organisations to report on the effectiveness of their measures, including any key performance indicators related to anti-slavery actions. This criteria is the least reported on with over half of universities not reporting on it.  This is however most likely due to the fact that the MSA has only come into force two and a half years ago thus making it difficult for universities to report on the effectiveness of the measures taken so far. The upcoming reports, therefore, should see an increase in universities reporting on this criteria.

The government guidance states that organisations should think about where training should be targeted to have the most effect. Training can be expensive as well as time consuming and the majority of universities opted to target training mainly at those in the procurement teams and very few mention providing training to their suppliers. From our research we are able to conclude that in the second year of reporting more universities refer to training in their statements than in the first year of reporting.

Overall, we have seen increased effort from universities to report and work towards greater transparency in their supply chains as well as greater understanding of the importance to identify risks, monitor supply chains as well as put into place tailored due diligence processes. The road to transparency in supply chains, however, is without a doubt a long one.

We are greatful to HEPA for helping us identify the statements produced after the reporting deadline of 31st January 2018. Whilst upmost care has been put to find the statements we are aware that we might have missed some. We would appreciate if you contact us if your statement has been omitted (o.martin-ortega@gre.ac.uk).

The authors are grateful to Kim Everett and Emma Keenan for the comments they provided during the revision of this report.

Patrycja is Research intern at the BHRE and project manager on the joint LUPC-BHRE Modern Slavery Project. For her profile please follow this link.