Construction businesses at risk due to suppliers

Firms urged to map supply chains to protect themselves following new global Achilles research

  • 39% of construction businesses across the globe do not or do not intend to have a plan in place to find out who is in their supply chain
  • 25% of construction businesses across the globe are awarding contracts or tenders to main suppliers without first having an anti-bribery and corruption policy
  • Construction businesses at risk of non-compliance with ethics laws such as Modern Slavery Act due to lack of supply chain visibility

New research from supplier risk management company Achilles has revealed that construction businesses across the globe are at risk of non-compliance with the Modern Slavery Act, after admitting failing to put in place safeguards to protect workers in all tiers of their supply chains.

Over a quarter (28%) of construction firms admitted they do not have a plan in place to find out who is in their supply chain – a first step for ensuring ethics among contractors through all the tiers. A further 11% did not plan to implement one.

Results were revealed in a survey of 117 construction companies across the UK, USA, Spain, Brazil, Australia, South Africa, the Nordics and the Middle East. The study was carried out by independent research agency IFF and commissioned by Achilles, which runs four construction communities across the world where leading firms work collaboratively to manage the risks associated with all their suppliers. This includes BuildingConfidence in the UK, used by 17 buyers to manage risks associated with 2,000 suppliers.

Lee Brunsden, BuildingConfidence community manager at Achilles said:

“With mounting legislation such as the Modern Slavery Act, construction companies are under pressure to establish chains of custody for core materials such as timber, from sapling to sale.  Yet this research shows many firms are leaving themselves open to reputational damage because they cannot establish who is in their supply chain.”

The Modern Slavery Act, introduced in 2015, requires any organisation operating a business or part of a business in the UK, with a turnover of £36+ million, must produce a slavery and human trafficking report each financial year. The statement must confirm the steps taken to guarantee that no slavery or human trafficking offences are happening in the supply chain or declare that no steps to confirm the existence of slavery or trafficking have been taken.  With penalties resulting in a public shaming for businesses who fail to comply or being taken to the High Court, construction businesses will not want to risk unwanted reputational damage.

Lee added

“Only through auditing the supply chain thoroughly and rigorously checking supplier details through every tier will construction companies be truly confident of ethically sourced materials or not falling foul of legislation. When it comes to ethically sourced timber, each log is coded so buyers know they have sourced their materials from a legal and well managed forest. Not using ethically sourced materials results in forests being destroyed. It also results in communities losing their natural resources, such as food or fuel, and aren’t being compensated in return for the loss.”