Using the Risk-Based Approach To Curb Modern Slavery in the Supply Chain: The Anglo American and Marks and Spencer Example

Abstract

Purpose – This paper critically examines the modern slavery statements of Anglo American Plc. and Marks and Spencer Group Plc., to determine the level of effectiveness of the risk assessment and risk mitigation measures of both companies, and to provide recommendations on how the risk assessment and risk mitigation measures of both companies could be strengthened.

Design/Methodology/Approach – The analysis took the form of a desk study, which analyzed various documents and reports such as the UK Modern Slavery Act 2015, the UK Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015, the UK Guidance issued under section 54(9) of the Modern Slavery Act 2015, the 2018 Global Slavery Index, funded by Forrest’s Walk Free Foundation, the Anglo American Plc. Modern Slavery Statement of 2017/18, the Marks and Spencer Modern Slavery Statement of 2017/18, the Financial Action Task Force Guidance on the Risk Based Approach to Combating Money Laundering and Terrorist Financing (High Level Principles and Procedures) 2007; the Financial Action Task Force International Standards On Combating Money Laundering and the Financing of Terrorism and Proliferation, (The FATF Recommendations) 2012; the Australia Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (as amended); the Financial Transactions and Reports Analysis Centre of Canada Guidance on the risk-based approach to combatting money laundering and terrorist financing 2017; and the Central Bank of Nigeria (Anti-Money Laundering and Combating the Financing of Terrorism in Banks and Other Financial Institutions in Nigeria) Regulations, 2013.

Findings – This paper determined that the standard due diligence measures and the enhanced due diligence measures of Anglo American Plc. are not effective enough to identify/assess the risk(s) of modern slavery in the supply chains reason being that Anglo American Plc. does not employ diverse methods/methodologies for her due diligence programme. This paper however determined that the standard due diligence measures and the enhanced due diligence measures of Marks and Spencer Group Plc. are effective enough to identify/assess the risk(s) of modern slavery in the supply chains since Marks and Spencer adopts diverse methods/methodologies for her due diligence programme.

This paper also determined that both Anglo American Plc. and Marks and Spencer Group Plc. adopt diverse methods for the monitoring of their corrective action plans which are designed to mitigate the modern slavery risk(s) associated with high-risk suppliers. For example, Anglo American Plc. monitors anti-modern slavery compliance with the use of both internal Anglo American teams and third-party auditors to ensure that the identified issues are adequately addressed.

In addition to discussing the different stages of the risk assessment/risk management process, this Article will examine the modern slavery statements of Anglo American Plc. and Marks and Spencer Group Plc. This Article will provide recommendations on how the risk assessment/risk mitigation measures of both companies could be strengthened. This is the only article to adopt this kind of approach. The analysis/recommendations in this Article will help UK Companies to design effective due diligence procedures for their supply chain.