Corporate report

Environment Agency modern slavery report 2021 to 2022

Published 13 September 2023

Foreword

The Environment Agency has prepared this report for the period ending 31 March 2022. Defra group have submitted a joint statement that contains submissions from all of Defra’s arm’s length bodies (including the Environment Agency) to the government. This review outlines Environment Agency activities undertaken to tackle modern slavery in 2021 to 2022.

Modern slavery remains a key issue globally, including in the UK. The Environment Agency recognises this and commits to identifying and addressing the risks within our business and supply chain. This report reflects the progress that the Environment Agency has made in helping to tackle this global problem. It also reflects where we will focus efforts for the year ahead.

The Environment Agency is a significant buyer of goods, services and works. We have an important role to play in addressing the risk of modern slavery within our supply chain. We have made good progress working with our construction suppliers (our highest spend area). We will use this learning to support work in other key spend categories. We have also made progress in making Environment Agency staff aware of how to spot the signs of modern slavery when performing their duties.

We have set ourselves clear goals to continue strengthening our approach and our ability to address the risks of modern slavery. We will address these risks across both our business and our supply chain. These goals are constantly under review to ensure that the Environment Agency has the most up to date information to combat modern slavery.

Section 1: Environment Agency structure, organisation and supply chains

Background

The Environment Agency is an executive non-departmental public body, sponsored by the Department for Environment, Food and Rural Affairs.

We work to create better places for people and wildlife and support sustainable development.

About the Environment Agency

Within England we’re responsible for:

• regulating major industry and waste
• treatment of contaminated land
• water quality and resources
• fisheries
• inland river, estuary and harbour navigations
• conservation and ecology

We are also responsible for managing the risk of flooding from main rivers, reservoirs, estuaries and the sea.

Working with Defra group

Defra group Commercial (DgC) manages commercial services for the Environment Agency and other arm’s length bodies. They provide commercial advice for wider parts of the Defra group, including the Environment Agency. However, they are not directly involved in the management of our commercial activity and supply chains.

We work closely with Defra to tackle modern slavery and we are part of Defra’s modern slavery working group.

Digital, Data and Technology Services (DDTS) provides IT and digital services across the Defra group, including to the Environment Agency.

Defra group Shared Services (DgSS) work on behalf of the Environment Agency to assure the services provided by Shared Services Connected Ltd (SSCL). SSCL provide human resource (HR) and finance transactional services for more than 20 government agencies, including the Environment Agency. SSCL follow processes that have been agreed with us and to ensure the required outcome is delivered to approved timescales. Along with monitoring SSCL’s performance, DgSS have a responsibility for ensuring that:

• the customer side of contractual commitments are met
• benefits are realised
• future service delivery is efficiently controlled

Environment Agency suppliers and supply chains

In financial year 2021 to 2022, Defra spent approximately £1.69 billion buying goods, services and works from suppliers. This spend excludes purchasing cards, expenses, grants and other inter-governmental spend. The Environment Agency accounted for 49% of the total spend. Defra departmental spend has remained consistent when compared to financial year 2020 to 2021, while the number of suppliers has increased by just over 7%.

Table 1: Breakdown of spend across Defra, excluding purchasing cards, expenses, grants and other inter-governmental spend

Key performance indictor (KPI)	2019 to 2020	2020 to 2021	2021 to 2022
Defra total supplier spend	£1.25 billion	£1.70 billion	£1.69 billion
% spend with top 10 suppliers	37%	38%	30%
Number of suppliers	13,177	10,603	11,410

Table 2: Contracts awarded by financial year across Defra

Financial year	Number of contracts
2019 to 2020	1,276
2020 to 2021	1,803
2021 to 2022	1,589

The Environment Agency buys a range of goods, services and works categorised into the following 5 key spend areas:

• environmental goods and services
• infrastructure and construction
• buildings
• technology
• corporate solutions

Section 2: modern slavery policies

Environment Agency policies

The Environment Agency’s sustainable business strategy, eMission2030, delivers aim 9 of the corporate action plan, EA2025. It includes commitments to protect people from modern slavery. The plan covers both our direct business activities and our supply chain.

The Environment Agency has committed resources within the corporate sustainability department in the form of a national social equity team. This is to drive forward robust modern slavery prevention measures and establish monitoring and assurance mechanisms. We have partnered with Slave Free Alliance to support our work.

The Environment Agency Whistleblowing Policy provides clear routes for personnel to raise concerns without fear of reprisal or unfair treatment. Staff can confidentially raise risks ‘to the health, safety and wellbeing of an individual or a group of people’.

Application of government procurement policies

The UK government has published the National Procurement Policy Statement, which sets out national priorities for social value delivery in procurement. This includes modern slavery and the actions contracting authorities should take.

All relevant policies, including Policy Procurement Note (PPN) 05/19 and PPN 06/20, are embedded within Defra group’s procurement processes and supporting documents. This builds upon our existing approach to the management of human rights risks. It also helps to inform how we identify and manage the risks of modern slavery risks within our supply chain.

To find out more about the cross-government policies that Defra group apply, read the UK Government Modern Slavery Statement.

Defra group Commercial’s procurement policy

DgC’s procurement policy sets out the framework and key principles which we follow in the Environment Agency. We are reviewing the policy and will identify opportunities to embed our sustainability principles, including in relation to modern slavery.

DgC’s strategy was presented to the Defra Board in 2021. Tackling modern slavery is included as a key priority area. This includes the following areas of focus:

• training commercial staff to identify threats associated with modern slavery in commercial activity
• where significant risk is identified, working with suppliers to mitigate the threat of modern slavery
• if modern slavery is identified, reporting and ensuring proportionate action is taken
• supporting production of Defra’s Tackling Modern Slavery Statement

Next steps

In 2023 to 2024, the Environment Agency is refreshing eMission2030 to include social equity (including modern slavery) among its key themes. The document will be publicly available in 2024 and will compliment Defra’s renewed sustainability strategy, which was published in 2023.

Section 3: risk assessment and due diligence

Risk assessment – process overview

Modern slavery falls within the Environment Agency’s wider management of sustainability risks, which is managed in line with our Sustainable Procurement approach. This approach includes identifying the relevant global sustainability risks and opportunities and setting out how these will be addressed throughout the commercial life cycle.

Our supply chains are global, providing direct and indirect support to the delivery of requirements. Due to the complexity of global supply chains, we do not yet have full transparency of our full supply chain. We’ve therefore taken a risk-based approach to achieving greater supply chain visibility of potential modern slavery, through focusing on our higher risk supply contracts.

In 2021 we reviewed our supply chain modern slavery risk and tiered all contracts using the government tiering tool. This tool assesses overall contract risk and value and categorises the contract as either gold, silver, or bronze. The gold tier is the highest risk and value. The gold and silver contracts represent about 90% of the total spend with suppliers and therefore was the focus of our analysis. The full breakdown of the contractual landscape is detailed in Table 3.

Note that Table 3 does not contain grants, collaborative agreements, partnership agreements or framework records. The value shown represents the total value of active contracts in the financial year 2021 to 2022, not the annual contracts value.

Table 3: Total value of active Defra group contracts by risk and value-based tier

Contract tier	Number of contracts	Total value of contracts let	Proportion of total by contract value (%)
Gold	58	£4,261 million	53%
Silver	1,218	£3,068 million	38%
Bronze	2,471	£749 million	9%
Total	3,747	£8,078 million	100%

The DgC Risk Management Tool (RMT) is a key part of our procurement strategies. The tool can identify and mitigate commercial and sustainability risks.

The sustainability section of the tool contains modern slavery and wider human rights considerations. This contains questions and guidance to support commercial and client staff in their understanding of the risks relevant to their commercial activity. An action plan to manage risks identified across the commercial life cycle is developed and used throughout the procurement process. When the contract is handed over to the contract manager, the risks and requirements that will require regular review are documented.

For contracts that are tiered as gold or silver, the RMT is used to assess modern slavery risks. With risks assessed as medium or high, further supplier led assessment is required to be undertaken using the Modern Slavery Assessment Tool (MSAT). To find out more about how the RMT determines when the MSAT is required, see Appendix A.

The RMT questions and guidance have been updated to further reflect the key risks and steps to be taken to manage them, including documenting the risk rating from the use of the MSAT. An external human rights specialist reviewed the changes and helped strengthen the improvements.

Next steps

The RMT will be reviewed during 2022 to 2023 to improve its usability. We will explore opportunities to combine the MSAT within our wider risk management tool.

We’ll review assurance process to ensure that we’ve identified modern slavery risks and put in place management actions for all contracts in high-risk spend categories.

Terms and conditions

We’ve developed and launched modern slavery clauses for use in our low value but high-risk contracts. We’ve also worked with the Cabinet Office as part of a cross-government working group to update the Sustainability Schedule. This includes standard modern slavery clauses to be applied for higher value contracts.

Case study: next generation supplier framework agreements

Six key Environment Agency framework agreements were reviewed as part of the framework management programme. The review focused on assurance of the modern slavery requirements within the framework agreement contract terms and the due diligence undertaken. The work procured through these framework agreements represents a significant proportion of Defra group committed spend.

The review involved reviewing suppliers’ governance, policies and procedures, risk assessments and due diligence.

Summary of key findings

Four of the frameworks have an enhanced provision within the requirements requiring modern slavery due diligence reporting, supply chain mapping and risk analysis. These requirements have enabled wider conversations with these suppliers to show compliance with the Modern Slavery Act and progress against their MSAT actions.

Where we identified weaknesses, we challenged those framework members to improve their approach to modern slavery through a regular review process.

The framework reviews have resulted in the supply chain undertaking further modern slavery checks and assurance. This has raised awareness of the importance of this area to customer organisations within the sector.

Through the review process, we challenged suppliers with minimum compliance to improve their approach to modern slavery. These actions have been agreed, captured and tracked through individual framework improvement plans.

The enhanced contract requirements enabled checks to be taken not only with tier 1, but also with tier 2 suppliers.

Risks relating to non-UK suppliers have been identified and we are working with our supply chain to understand the risks and the mitigating measures.

MSAT red, amber, green (RAG) status reporting has been adopted as a key performance indicator (KPI). This will be reported on and tracked within the framework performance dashboard.

The primary contractors have completed MSATs, and the remaining suppliers are being encouraged to complete theirs.

Next steps

On receipt of all supplier responses, we will convene a task and finish group with our suppliers. This group will review and address challenges collaboratively and share best practice with the infrastructure supply chain, as well as wider spend categories. Outputs may include best practice due diligence proformas and standards to reduce administrative burdens and improve supplier knowledge and understanding.

Supply chain due diligence

MSAT report ratings and results – progress against 2020 to 2021 baseline

We have compared MSAT reports covered in the 2021 statement with updated MSAT reports received for 2022.

Our data suggests that:

• suppliers have maintained their performance in monitoring and managing the risk of modern slavery
• where there have been changes, these have been positive improvements ranging from increased scores through to a reduced number of recommended improvement actions being listed

Where our suppliers have made improvements, these tend to relate to due diligence and KPIs. Suppliers are now asking more questions about their supply chain, ensuring there is better monitoring of these networks.

Analysis has also found a trend that certain improvement recommendations remained within suppliers updated MSATs. These recommendations and their associated MSAT report template numbers were:

1. “47. Your organisation should ensure its modern slavery policies and codes should include the provisions described in the guidance.”
2. “55. Your organisation should consider modern slavery during each stage of its procurement process. It is important to consider modern slavery issues at different stages of the procurement process to help reduce risks to your business.”
3. “62. Your organisation should consider carrying out the following due diligence measures to ensure workers in your organisation and supply chain are not trapped in debt bondage.”

This analysis will help inform our engagement with these suppliers over the next 12 months.

Several contracts that were included in the baseline for 2020 to 2021 have been, or are in the process of being, re-competed. Once awarded, the MSAT action plans of the successful suppliers will be reviewed and improvement areas monitored.

Participation in peer-learning groups and collaborative initiatives

We are engaged in a range of initiatives, including the following examples.

DgC attend the Home Office led Modern Slavery Process Implementation Group (MSPIG) and the Cabinet Office led Social Value Network meetings. All groups aim to influence, challenge, gain knowledge, learn from others and drive consistency of approach.

The Environment Agency’s Social Equity Specialist regularly attends meetings and training sessions on modern slavery topics. You can find examples of training undertaken in section 4.

Training event details are shared with other sustainability experts across the business.

Case study: collaborative working – National Enforcement Powers Guide

The Environment Agency contributed to the National Enforcement Powers Guide. This publication supports continued collaboration between law enforcement partners to ensure that victims of modern slavery receive the support they need and offenders are prosecuted.

The guide helps facilitate a faster tactical multi-agency response and to use the appropriate legislation to gain entry into commercial and residential premises. Premises are selected based on intelligence that has indicated that there could be a potential case of exploitation or modern slavery. The guide can also be used to support agencies to understand and develop key processes when finding victims and offenders of exploitation. It also applies to serious and organised crime.

The guide is for at all professionals in law enforcement and associated organisations who may encounter victims and perpetrators of exploitation and modern slavery. It is suggested that this guide should be used as a reference document for agencies to assist in planning and working with partner agencies. The guide considers who should be involved at the various stages of conducting activity, in order to respond to potential victims and offenders.

Responsible purchasing practices

Requirements that have been placed on suppliers include the following examples.

Suppliers must make sure that payment delays cannot be used to exploit people throughout the supply chain. The Environment Agency terms and condition bidder packs include prompt payment clauses.

Suppliers are required to be members of the Supply Chain Sustainability School (SCSS). This gives suppliers access to a range of sustainability resources and events that cover modern slavery.

Section 4: training and awareness raising

Organisational training

To date, the Environment Agency has prioritised modern slavery training for those in commercial and client roles who are involved in purchasing activities. We recognise the need to build capability across all our staff teams in the future.

We have also partnered with the SCSS. The SCSS was promoted to our staff and suppliers to increase modern slavery knowledge and compliance. The partnership provides our staff and suppliers with access to specific modern slavery training and to a suite of wider resources. The SCSS also enables partners to work with it and to collaborate together, to develop new resources to tackle modern slavery. In March 2022, Defra group became a partner of the SCSS, following the Environment Agency’s successful collaboration.

Commercial training – commercial staff and contract managers

Building the capability and confidence of commercial staff and contract managers to identify and address the risks of modern slavery is a core priority. These roles are instrumental in supporting our due diligence approach.

To support improvement to the baseline we established last year, we have run a series of awareness and knowledge raising events across 2021 to 2022. These included sessions on:

• modern slavery
• the MSAT process
• wider sessions on social value

These training sessions were recorded and shared with staff who were not able to attend the training or who wanted some refresher training. Staff working on high-risk procurements and contracts have received mentoring to build their capability. Further sessions are planned for the coming year, including a masterclass on modern slavery for contract managers in 2022 to 2023.

Commercial staff are also required to undertake the Home Office modern slavery e-learning or the Chartered Institute for Procurement and Supply (CIPS) ethics e-learning. The requirement to undertake this training has been communicated through newsletters, training and meetings with teams and individuals. The requirement is being built into our learning and development strategy, which is due to be launched shortly.

DgC have approximately 230 members of staff. A survey was sent to all staff to gauge the number of staff that have undertaken the Home Office or CIPS training. Survey results showed that 60% of staff who responded have undertaken modern slavery training. Those who responded and have not completed the training committed to completing it within the next few months. Overall, staff felt that their knowledge of modern slavery was good but could be improved.

The focus for 2022 to 2023 is to continue to build awareness and capability in commercial staff and contract managers. It is also to establish whether we are seeing an improvement in confidence of addressing risks in this area.

Case study: operational training of Environment Agency staff

The Environment Agency has developed an e-learning package to upskill staff on how to spot the signs of modern slavery. This builds on pilot modern slavery training that was undertaken by enforcement officers. The new package is aimed at staff involved in both enforcement and regulated industry roles.

The Environment Agency does not have a role to investigate modern slavery through enforcement and regulated industry work. However, we do have a likelihood of coming across it in settings such as waste and agricultural sites. The training gives staff the opportunity to collaborate with enforcement agencies and departments to gather intelligence to spot the signs of modern slavery at source.

The course includes topics such as relevance to the Environment Agency, the referrals process, definitions and staff wellbeing. The focus of the training is on enforcement and regulated industry staff but it is open to all staff.

Section 5: goals

Last year the Environment Agency and Defra published a joint modern slavery statement. As a result, this section covers joint Environment Agency and Defra group goals. Where goals apply solely to the Environment Agency this has been highlighted.

Progress on 2021 to 2022 goals

Goal 1

Goal: Share good practice regarding preventing and monitoring modern slavery with relevant arm’s length bodies and stakeholders as part of a continuous improvement programme.

Defra has shared experiences with the Cabinet Office Standard Contracts Working Group. They have done this to influence the next generation of standard contract templates across government relating to modern slavery.

Within the Environment Agency, presentations have been given to teams to share the experiences of commercial staff. The aim has been to:

• help others deal with issues they may be experiencing within their supply chain
• explain how to approach modern slavery as part of a competitive exercise
• support organisations with wider business risk mitigation

Goal 2

Goal: Ensure members of DgC complete mandatory training aligned to the management of modern slavery risk. Encourage those who are involved in commercial activity across the Environment Agency to undertake similar training.

Requirements to undertake the Home Office or CIPS modern slavery e-learning have been communicated regularly to commercial staff. However, due to the limited responses received from the internal survey, it’s been difficult to assess the number of staff that have fulfilled this commitment. A range of internal training events have also been run across the year on modern slavery to commercial staff and contract managers. This is to ensure gaps in learning can be addressed on an ongoing basis.

A focus for 2022 to 2023 (Goal 6) will be to capture and improve the uptake of modern slavery training by commercial staff. It will also be to demonstrate improvements in capability and confidence.

Goal 3

Goal: Contract managers will work with relevant suppliers to address the improvement areas highlighted in their MSAT questionnaires. Results will be shared with DgC leadership.

We have provided examples in this report to demonstrate that where relationships have been actively managed by contract managers this has led to improvements. These improvements include transparency and anti-modern slavery activity on the part of the Environment Agency supply chain.

Infrastructure is the highest spend area across the group and a sector where there is a high-risk of modern slavery. This risk may occur both on-site and in the wider supply chain through goods, services and works sourced. Contract management efforts have focused on an in-depth analysis of 6 key infrastructure frameworks to provide a baseline. The baseline relates to the management of modern slavery risks, due diligence undertaken and opportunities for the infrastructure community to address common challenges collaboratively.

Within other high-risk areas, we have found limited progress in relation to the MSAT action plans. A focus for 2022 to 2023 (Goal 5) relates to targeted contract management assurance.

Goal 4

Goal: Ongoing management of modern slavery through internal sustainability stakeholders.

There are a variety of internal forums across the group where modern slavery issues can be raised alongside wider sustainability requirements. This is an ongoing activity and the sharing of ideas is starting to show positive action in the fight against modern slavery.

Goals for 2022 to 2023

Reviewing and analysing performance, including our progress to date against our 2021 to 2022 goals, has helped identify areas where the Environment Agency can improve our approach.

To strengthen how the Environment Agency tackles modern slavery and how our commitments can be aligned, we will undertake the following actions.

Goal 1

Goal: Policy – Review corporate policies and plans to identify areas where our approach to modern slavery can be improved and implement a plan to address this.

This year we’ll begin a prioritised review of relevant Environment Agency corporate policies and sustainability plans. This will be to find areas where our approach to identifying and managing the risks of modern slavery can be strengthened. In addition, we will commission specialist modern slavery consultancy support to review internal practices and processes relating to modern slavery. We will produce a prioritised action plan for the Environment Agency to undertake independently and in collaboration with the Defra group.

Goal 2:

Goal: Risk management – Assess the risk of modern slavery arising from the Environment Agency’s business and commercial activities and develop a risk mitigation plan.

This year we will begin a risk assessment to map out the Environment Agency’s interfaces with areas of risk from modern slavery. This is building on the risk assessment for the supply chain and will relate to business operations and wider commercial activity. Following this, we will develop and implement a prioritised action plan to mitigate the risks.

In addition, we will undertake a due diligence review of non-Flood and Coastal Risk Management (FCRM) activities to:

• fully understand levels of risk across the business
• identify priority areas and actions to safeguard and enhance working conditions within our supply chain (products and services)

Goal 3:

Goal: Governance – Review the way in which accountability for modern slavery is built into our governance structures and reporting mechanisms.

This year we will review our governance structure with respect to modern slavery monitoring and reporting. Any changes will be embedded within existing Environment Agency governance.

Goal 4:

Goal: Commercial process and tools – Undertake a review of the process and tools used to support the identification and management of modern slavery risks.

A review of the process and tools available to support commercial activity in the identification and management of modern slavery risks will be undertaken. Where opportunities to strengthen our approach are identified, a prioritised action plan of improvements will be developed.

Goal 5:

Goal: Commercial Data and Assurance – Strengthen data collection and establish targeted contract management assurance.

We’ll look to capture data within our commercial systems to improve the visibility of our contracts requiring a heightened level of modern slavery risk mitigation. This will be done as part of the roll out of a new e-procurement system.

Goal 6

Goal: Learning and culture – Roll out and evaluate uptake of modern slavery training.

This year we’ll communicate the modern slavery training available to staff and will capture evidence the numbers of staff who have undertaken this training. We will develop a means of assessing the impact of training on staff confidence and capability in managing modern slavery risks.

Appendix A: determining whether the Modern Slavery Assessment Tool is required

The following explains how the risk management tool determines when the MSAT is required:

• using the UK Government Contract Tiering Tool, the opportunity will be graded as Gold, Silver or Bronze
• for Silver and Gold opportunities, the RMT will be used and then followed by the Modern Slavery Risk Assessment tool (MSRAT)
• for Bronze opportunities, the risk and issue log and sustainable procurement prioritisation tool (SPPT) will be used. If the outcome is high for the SPPT, then the use of the MSRAT this will required. For medium or low opportunities, there is no need to consider modern slavery action
• when using the MSRAT, for contracts graded as medium or high risk, a proportionate approach is suggested when considering whether to include modern slavery as part of the tender process
• where modern slavery will be included, the winning bidder will be invited to complete a MSAT questionnaire before award of contract

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