What suppliers need to know about modern slavery policy in procurement

This article explains what you need to know about the government’s modern slavery policy if you’re a small or medium-sized enterprise (SME).

What is Modern Slavery?

Modern Slavery is often a hidden crime involving denying another person’s freedom. It includes:

• slavery
• forced and compulsory labour
• debt bondage
• human trafficking

The government introduced the Modern Slavery Act in 2015 to tackle these crimes.

What is Procurement Policy Note 009 and why was it introduced?

The UK government uses Procurement Policy Note (PPN) 009 to address modern slavery. PPN 009 makes sure public sector buyers (contracting authorities) identify and manage the risk of modern slavery occurring in their supply chains.

Modern slavery risk must be considered throughout the commercial lifecycle. Starting at the pre-market engagement (PME) stage to procurement and contract delivery.

Modern slavery risk assessment starts with market engagement

A public sector buyer’s (contracting authority’s) proposed approach to modern slavery should be tested with potential bidders during pre-market engagement. This is to make sure:

• it’s not burdensome or likely to deter SMEs and voluntary, community, and social Enterprises (VCSEs) from bidding
• the approach is relevant to the risk

You can find more information in Section 2 of PPN 009: Guidance on tackling modern slavery in government supply chains.

Pre-market engagement provides SMEs and VCSEs with an opportunity to:

• provide feedback on the modern slavery risk rating
• highlight any initiatives and measures they already have in place to tackle modern slavery risks in their organisation and supply chains

Modern slavery mandatory exclusion offences

Under the Procurement Act 2023, bidders who have committed modern slavery offences within the last 5 years face automatic removal (known as mandatory exclusion),  unless they can show remedial action (correcting the issues identified in the offence).

Evidence of modern slavery without a conviction may also result in removal (discretionary exclusion).

What modern slavery questions must bidders answer in a procurement specific questionnaire?

Bidders (potential suppliers) included in Section 54 of the Act have an annual turnover above £36 million, and carry out a business, or part of a business, in the UK.

They must write and prepare a slavery and human trafficking statement which must be reviewed, updated and published every year, within 6 months of each financial year end.

Modern slavery statements should be published in a prominent place on the bidder’s UK website.

A bidder’s statement must:

• clearly state that board approval has been given, include the date of approval and be signed by a Director (or equivalent) 
• detail the steps taken during the financial year to ensure that slavery and human trafficking is not taking place in supply chains and in any part of its own business
• set out where supply chains are located 
• describe the nature of risks in relation to those locations

Bidders must provide a link to the statement that appears in a prominent place on their organisation’s UK website homepage.

How are bidders evaluated for modern slavery risk at procurement award? 

Some contracts – like those for electronics – are at higher risk of modern slavery occurring within the supply chain. In these circumstances a buyer (contracting authority) may decide to include:

• policy outcomes from the Social Value Model  such as “Tackling Workforce Inequality” referenced in PPN 06/20, or “Fair Work” referenced in PPN 002 and the accompanying Model Award Criteria (MAC) “Identifying and managing the risks of modern slavery” under Mission 1) in their procurement and contract 
• a relevant Modern Slavery Award Question requiring bidders to show action to identify and manage the risks of modern slavery throughout the contract
• requirements to manage modern slavery risk in supply chains (where these issues are proportionate and relevant to the subject matter of the contract in their specification)

Read more on how we assess and award suppliers who bid for a place on our agreements.

Modern slavery compliance: 4 things small and medium enterprises need to know

It’s important bidders know that commercial teams must consider the impact of PPN 009 on SMEs and VCSEs. This means that when applying the PPN they must:

1. Ensure barriers to participating in new procurements are not created for SMEs, adhering to Section 12 (4) of the Procurement Act 2023.
2. Not place unnecessary burdens on SMEs and VCSEs when assessing risks in existing contracts, considering proposed terms and conditions, reporting and KPIs.
3. Ensure modern slavery risks are clear to potential bidders.
4. Avoid adopting a blanket approach to tackling all risks in the same way – the approach should be proportionate based on the risks identified.

Tips for small and medium enterprises on navigating the Government’s modern slavery policy process

1. Read the Home Office’s publish an annual modern slavery statement guide.
2. Read the Home Office’s updated Transparency in supply chains: a practical guide.

These will help you identify if your organisation needs to publish a modern slavery statement and what to include in it.

How is modern slavery managed within existing contracts?

• all suppliers in high or medium risk categories (such as construction or technology) may be invited to use the modern slavery assessment tool (MSAT) or an equivalent tool
• we carefully review MSAT assessment results and hold follow-up discussions with suppliers who have a high or medium risk score
• we work with suppliers to put effective risk mitigation plans in place

How is Crown Commercial Service helping to tackle modern slavery?

At Crown Commercial Service we use the best modern slavery assessment methods available to us – this means our customers can feel assured when buying through our agreements. 

Find out more about how we’re helping customers tackle the modern slavery risk in their supply chains. 

Read more supplier guidance

Looking for more helpful guidance to help you supply to the public sector? Read more in our supplier specifics series.

Feedback

We always welcome feedback, suggestions or queries. Please submit your feedback to smefeedback@crowncommercial.gov.uk