Procurement Policy Note PPN 02/23 sets out conditions that public sector buyers must impose when running procurement activities and covers how to assess responses from bidding firms. While there are legal sanctions in place to deal with instances of modern slavery when they occur, the Government has the opportunity to use its extensive buying power to help mitigate the risks of it occurring in its supply chain by adopting new processes and procedures, in both procurement and supplier management.
PPN 02/23 sets out a new requirement for supply chain information to be provided at the selection stage for all procurements deemed ‘high risk’. There is also additional guidance on enhanced due diligence. When assessing modern slavery risks from suppliers, commercial teams must consider the impact of its implementation on SMEs and VCSEs (voluntary, community and social enterprises).
There are four areas of activity buyers must carry out when assessing firms:
- Identifying and managing risks in new procurement
- Assessing existing contracts
- Taking actions when victims of modern slavery are identified
Purchasers are to assess the risk of each contract according to six areas: industry type, nature of workforce, supplier location, context, commodity type and business model.
Mitigating modern slavery risks should be considered throughout the procurement process. Certain modern slavery offenses committed under the Modern Slavery Act 2015 are mandatory exclusion grounds. Where there is evidence of modern slavery but no conviction for offences, this may be a discretionary exclusion ground.
This applies for all Central Government Departments, Executive Agencies, Public Bodies and NHS bodies for all procurement activities after 1 April 2023. It includes new procurement as well as existing contracts. In the case of below threshold procurement, purchasers may ask suppliers to answer questions to assess their suitability, capability, legal status and financial standing.
In-scope organisations should note the table (Section 2, Table 1) used for assessing the risk of modern slavery which has been updated to include current global modern slavery risks in key sectors of concern.
Even if a supplier self-declares that there are no ground for their exclusion, procurers should conduct due diligence, including reviewing debarment lists.
Extensive supplier engagement is encouraged, including uses of a Modern Slavery Assessment Tool (MSAT) and a range of resources from the WalkFree Foundation, Ethical Trade Initiative (ETI), United Nations Guiding Principles and more.
The guidance discourages automatic disengagement and instead encourages working with the supplier to develop an action plan setting out worker remediation, a review of systems and grievance mechanisms.
The Government has published a procurement planning checklist
Acclaro supports the development of policies and processes tackling modern slavery
Whether you are private sector or public sector, our Responsible Business services can help you develop the systems and processes you need to support good governance. Contact us to find out how we can help your organisation with Modern Slavery and other supply chain risks.