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Farming & Rural Business Community

Modern Slavery in the Farming Sector – do accountants have a role to play?

Author: Dr Jane Berney BFP FCA, Manager, Business Law, ICAEW

Published: 25 Mar 2021

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It is an uncomfortable truth but cases of modern slavery and human trafficking in the farming sector are common. According to Farmers Weekly some 13,000 workers are exploited annually in the UK. It is so widespread that the Red Tractor scheme has said it intends to make farmers prove they are in compliance with the Modern Slavery Act 2015 (MSA) as a condition of membership.

What is the Modern Slavery Act?

The MSA did not create a new offence of ‘modern slavery’ as slavery was and still is a crime but it did introduce a new requirement for some commercial organisations to prepare and publish an annual Section 54 ‘Transparency in Supply Chains’ Statement. This is intended to set out the risk of modern slavery occurring in an organisation’s business and supply chains and the action taken to combat this. The idea is that if you know where slavery might be then you can take action to stop it.

Most UK supermarket chains are caught by the MSA and so should be asking all their suppliers whether there is any risk of slavery in their operations and how they are or are intending to mitigate it. These suppliers should also be holding their suppliers, such as farms, to account in a similar way. Unfortunately, many of those caught by the act pay lip service to the reporting requirements, so much so that the government has promised to strengthen the MSA in due course. It is therefore prudent for the food and farming sector to act now and not stand idly by. 

What can the food and farming sector do?

On farms and food production sites the greatest risk is that workers are in fact slaves and so the starting point is to understand what slavery is. Put simply, it is coercing another person to undertake compulsory labour. Coercion is not just physical force or the restriction of movement but includes the retention of identity documents, payments made to the employer for food etc., retention of wages and threats to the victim’s family. All of these make it very difficult for the victim to leave the employment. 

If you suspect modern slavery report it to the authorities. Do not confront the victims themselves as this may put them and you in danger. ICAEW’s Modern Slavery Hub has more advice on spotting and reporting victims.

Remember, under the MSA, a crime is committed if a person knows or ought to know that another is being held in slavery or forced to perform compulsory labour. In other words, you cannot turn a blind eye.

What can accountants and business advisors do?

It’s not just about reporting victims. Just as important is stopping the criminal gangs behind the victims and, in this respect, accountants and business advisors are in a much stronger position then they may realise. This is because the ‘red flags’ for modern slavery are very similar to those for money laundering and other economic crimes, such as benefit and tax fraud. The accounting records and business practices of an organisation often contain vital clues. Examples include a turnover level that seems unlikely given the number of staff on the payroll, an owner’s extravagant lifestyle inconsistent with the profits, reliance on cash and strange payment practices. For more examples see ICAEW’s Modern Slavery Hub.

How can ICAEW help?

To help members, whether in business or practice, to comply with the MSA the Business and Management Faculty has developed a Modern Slavery Hub. It includes guides and webinars on the legal requirements in the UK and elsewhere, how to spot modern slavery and what to do if you do. More is planned but if you can suggest other ways we can help or can offer some tips based on your own experience or that of your clients please contact us at bam@icaew.com.

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