Corporate report

UK Export Finance modern slavery statement 2020 to 2021

Published 25 November 2021

Ministerial Foreword

The dehumanising, insidious and extensive nature of modern slavery makes it an immense challenge to address, but an absolutely essential one. Almost 200 years after the Slavery Abolition Act was passed, treating people as commodities and exploiting them for criminal gain continues. Actions such as human trafficking, forced labour or exploitative labour and payment practices have devastating and enduring inter-generational impacts on individuals, families, communities and societies, both in the United Kingdom and abroad.

The United Kingdom is committed to working with international partners and businesses to tackle modern slavery in global supply chains. As the UK’s export credit agency, UK Export Finance (UKEF), is especially vigilant in its due diligence processes to ensure that the deals it supports include protections for the rights of workers.

I am pleased to support UKEF’s first Modern Slavery Statement which sets out the steps that UKEF, together with the Department for International Trade, has taken to identify, mitigate and prevent modern slavery in its own supply chain. There is more to be done and this statement demonstrates UKEF’s commitment to further enhance its approach to tackling modern slavery across its business over the next 12 months.

Eradicating these appalling practices requires us all to be knowledgeable and diligent, and to take appropriate action when we suspect something is wrong. I am confident that this statement is a constructive and important step forward in UKEF’s contribution to eradicating modern slavery in its supply chains and beyond.

Mike Freer MP

Minister for Exports

Introduction

UK Export Finance (UKEF) is the UK’s export credit agency and a government department, strategically and operationally aligned with the Department for International Trade (DIT). UKEF is the operating name of the Export Credits Guarantee Department, and our mission is to ensure that no viable UK export fails for lack of finance or insurance from the private sector, while operating at no net cost to the taxpayer.

DIT provide a fully managed commercial service to UKEF for procurements of a value above a threshold of £10,000.00 covering: procurement of goods and services; providing commercial advice relating to the procurement; providing commercial advice and access to training related to Contract Management; procurement and contract governance; procurement and contract policies and processes; commercial confirmation of purchase orders and support in relation to any UKEF commercial audits. UKEF is however responsible for its contract management of procured contracts.

UKEF recognises that the risk of modern slavery occurs in the supply chains for goods and services across the world, but that by its very nature it is hard to detect. As a ministerial department UKEF is committed to furthering HM Government’s objective to eradicate modern slavery across supply chains.

UKEF also recognises that it can be indirectly exposed to the risk of modern slavery occurring in the supply chains of the businesses that it supports. UKEF may reasonably be expected to take appropriate and proportionate action in this regard.

This is UKEF’s first Modern Slavery Statement. It outlines the work DIT, as our commercial services provider, has carried out on procurement activity on our behalf across 2020/21, and key goals we have set ourselves to drive forward our work, that can be found at the end of this statement.

As DIT provides procurement services to UKEF via Memorandum of Understanding, DIT have provided UKEF with relevant information and data for our statement.

UKEF will publish a modern slavery statement annually, reporting on progress and setting out where improvement can be made year on year.

Section 1: Organisational structure and supply chains

Reporting period

This statement covers the reporting period from 1 April 2020 – 31 March 2021. Facts, figures and activity detailed are taken from this period.

Departmental function

UKEF as the UK’s export credit agency helps UK companies:

• win export contracts by providing attractive financing terms to their buyers
• fulfil export contracts by supporting working capital loans and contract bonds
• get paid for export contracts by providing insurance against buyer default.

We provide insurance, guarantees and loans where the private sector will not, backed by the strength of the government’s balance sheet. We also help companies find support from the private sector. We help to make exports happen which otherwise might not, supporting UK exporters and their supply chains in growing their businesses overseas.

We do not currently have any Arm’s-Length Bodies (ALBs) attached to the department.

Organisation facts and figures

Number of employees

A total of 403 (397.1 FTE) colleagues are employed across the department. All staff are UK based. As DIT provide a fully managed commercial service to UKEF above the threshold of £10,000.00 UKEF does not directly employ any staff undertaking procurement activities.

Nature of the labour force

The Chief Executive is responsible for all our activities as the department’s Accounting Officer, and is supported by the Executive Committee, the UK Export Finance Board and the Export Guarantees Advisory Council.

During the 2020-21 reporting year UKEF was organised as follows:

• Chief Executive’s Group
• Chief Finance and Operating Officer’s Group
• Legal and Compliance Group
• Origination, Client Coverage, Marketing and Communications Group
• Business Group
• Resources Group
• Risk Management Group

At the end of 2020, UKEF made some changes to its operating structure and created the Strategy, Policy and Climate Change Directorate. Further details on UKEF’s structure and strategic objectives can be found in UKEF’s Annual Report and Accounts 2020 to 2021.

All UKEF staff are employed in professional services and administrative support type roles. The workforce is relatively diverse with 31% identifying as coming from ethnic minority groups, and 39% are female. UKEF’s workforce is highly engaged having achieved our highest ever score in the annual Civil Service People Survey.

Countries and regions of departmental operation

All UKEF staff are UK based.

Supply chain facts and figures

Annual spend

A proportion of UKEF’s departmental spend is for procurement undertaken on the Department’s behalf by 3rd parties within HM Government, and therefore is governed by the modern slavery policies and processes implemented within those organisations. These MOUs are standard practice between government departments and are subject to regular review. The areas of spend include but are not limited to: commercial services via MOU with the Department for International Trade (DIT) and facilities management via MOU with HM Treasury (HMT).

UKEF’s annual spend is £20.3m (excluding staff costs).

Number of suppliers/contracts

We have worked closely with DIT to provide relevant information and data for our statement to enable UKEF to assign the contract tiering. UKEF contracts are categorised based on the Cabinet Office contract tiering tool^{[footnote 1]}; gold tier contracts represent our most complex and/ or high value contracts, through a descending scale to silver and bronze tier contracts. The table below shows a breakdown of UKEF contracts for 2020/2021^{[footnote 2]}.

Contract tier	Number of contracts
Gold	1
Silver	7
Bronze	23
Un-tiered	4
Total	35

Of the 35 contracts that we have, all suppliers are registered in the UK except for one in the US and one in the Netherlands.

Key ‘unknown’ supply chain data and plans to develop understanding

UKEF recognises that gaps remain in our knowledge of the lower tiers of our supply chain. In the year ahead we will work with DIT to include terms in our standard contracts that will oblige tier one suppliers to provide supply chain maps for all contracts identified as high risk. This will be supported by new processes that will regularly gather this data from suppliers enabling us to have greater sight of, and insight into, our global supply chains.

Internal governance of anti-slavery work

UKEF has appointed an Anti-Slavery Advocate for the purposes of cross departmental engagement, and attendance at the Modern Slavery Procurement & Implementation Group^{[footnote 3]}.

Section 2: Policies in relation to modern slavery

The UK government has established policies which aim to ensure social responsibility in all procurements of goods and services drawing from supply chains across the world. These policies include, but are not confined to, taking steps to prevent modern slavery and other forms of exploitation such as child labour from being present in UK government supply chains.

Promotion, implementation and enforcement of PPN 05/19

DIT follows and adheres to cross government policies, as listed in the HM Government modern slavery statement (pages 7-9), and this applies to UKEF procurement undertaken by DIT. All HM Government departments have been directed to carry out actions in accordance with the Modern Slavery Public Procurement Notice (PPN 05/19) and associated public procurement guidance. DIT have taken steps to implement the policy and put in place the processes and the training to support this.

Promotion, implementation and enforcement of any departmental specific policies relevant to modern slavery

DIT Commercial’s internal Modern Slavery policy applies to UKEF procurement activity undertaken by DIT. DIT Commercial staff must undertake an internal modern slavery risk assessment for all UKEF procurements over £10,000 in value, to determine the level of modern slavery risk that each contract is exposed to, and to identify where further action may be necessary. Future actions in 2021/22 will include mandated supplier completion of the HM Government approved Modern Slavery Assessment Tool (MSAT) and the inclusion of contractual measures and targeted Key Performance Indicators (KPIs), where appropriate.

Section 3: Risk assessment and due diligence

Approach to prioritising anti-slavery activity

DIT has taken a systematic and proportionate approach to determining modern slavery risk across UKEF contracts. Internal risk assessments based on PPN (Procurement Policy Notice) 05/19 have been carried out across existing and new contracts. Existing contracts that were due to expire in the short term were not included in this activity, as UKEF would have little opportunity to influence contracts in the contract exit or contract transition period. This work has enabled UKEF to gain a robust understanding of the risk across our contracts, which will be a key enabler in the next phase of our work, focusing on those areas where we can have most impact to reduce modern slavery practices.

Tracking of risk assessment outcomes is mandatory in DIT’s procurement platform and reported to DIT’s senior governance forum for contract management. DIT included contracts procured through Crown Commercial Services (CCS) frameworks in this exercise, with outcomes detailed in the tables below. DIT Commercial have engaged with CCS to gain an understanding of their modern slavery governance and processes and UKEF’s responsibility as the end contractor of these services, and we will build this into our future activity.

Findings from internal risk assessment

Internal risk assessment by DIT of existing UKEF contracts identified two medium risk and 24 low risk contracts.

Crown Commercial Services (CCS) Frameworks
Call offs from high-risk frameworks	0
Call offs from medium risk frameworks	0
Call offs from low-risk frameworks	8

UKEF-procured contracts
	Existing contracts	New contracts
High risk	0	0
Medium risk	2	0
Low risk	24	0

Process for monitoring modern slavery risks

A mandatory reporting field for internal risk assessment outcomes is included in DIT’s e-sourcing tool. This allows for regular review, monitoring and reporting to UKEF on the modern slavery risks in our supply chain.

Implementation of social value in procurement policy

The UK Government has supported this agenda by introducing social value specific incentives for contractors to eradicate modern slavery activity from their supply chains. As of 1st January 2021 social value is now considered in all above threshold UKEF procurements by DIT, as mandated in PPN 06/20^{[footnote 4]}.

Implementation of responsible purchasing practices

UKEF recognises the relationship between responsible payment practices and the mitigation of modern slavery risks occurring across the supply chain. The Department is committed to the implementation of responsible purchasing practices across its commercial portfolio, and in embedding prompt payment practices across the procurement life cycle in line with PPN 07/20.

See UK Export Finance: prompt payment reports

Participation in peer-learning groups of other collaborative initiatives

UKEF works actively to engage across government modern slavery networks. We recognise that we are in the initial stages of our work in this area, and the importance of engaging with, and learning from, wider best practice to further the aim of eradicating modern slavery from our global supply chains.

Section 4: Training and awareness raising

This section describes the training DIT, as our commercial services provider, has delivered to commercial staff to build their capacity to identify and address modern slavery risks.

Training for staff

Focused training was delivered to the DIT Commercial team as part of the modern slavery policy launch, using the CIPS ethical procurement e-learning and test. This was a key element of DIT’s phase one activity, ensuring that all commercial and procurement staff understood the importance of the modern slavery agenda, how and where this can occur and their key responsibilities in minimising these risks. This is now a mandatory training module for all commercial and procurement staff at DIT. Currently, 95%^{[footnote 5]} of DIT Commercial staff have completed this module, with HM Government identifying this as a best practice training tool for government commercial staff on modern slavery.

DIT Commercial have revisited their modern slavery policy, ensuring that it is clear, easy to understand and available for all commercial staff. Central policy team leads are available and regularly engaging with commercial leads to provide support and guidance on all aspects of modern slavery and to help prepare the department for the implementation of the next phase of our work.

Reported improvements in understanding

In addition to the above approach to training, DIT have increased understanding of key elements of modern slavery activity, processes and outcomes within their central commercial support functions, namely commercial policy, and commercial capability. This growing expertise will support phase two of DIT’s activity, which will include increased focus on skills development for colleagues working on high and medium risk contracts, before broadening this across the wider portfolio.

DIT will further enhance this in 2021/22 to deliver additional training to the commercial team.

Section 5: Goals and Key Performance Indicators (KPIs)

KPIs Used to monitor effectiveness of DIT’s work to tackle modern slavery

KPIs FY 2020/21

DIT has taken a phased approach in their work to tackle modern slavery across our supply chains, with work throughout 2020/21 focused on raising awareness and building understanding of the risks of these practices occurring. Activity was focused around three main objectives, all of which were achieved:

• 95% completion of the HM Government approved training on modern slavery – Chartered Institute of Procurement and Supply (CIPS) ethical procurement by all existing DIT commercial staff.
• 95% completion of CIPS ethical procurement training within one month for all new starters in the commercial team.
• The completion of internal modern slavery risk assessments for 100% of all active in-scope contracts to enable appropriate further action to be taken.

Goals for departments

Our phase one activity indicated that the risk of modern slavery in much of our procurement activity and pipeline is low. We intend to build upon and learn from this in the next phase of our work.

UKEF will continue to work with DIT in relation to the KPIs that have been set by DIT in relation to commercial activity to ensure that they are being met as well as possible in relation to UKEF contracts.

UKEF examines the environmental, social and human rights risks (ESHR) and potential impacts of projects it is asked to support and monitors their ESHR performance in line with our published ESHR policy. From the date of this statement, UKEF is committed to develop its current practices and review and consider how it will continue to take account of modern slavery risks in relation to the businesses it supports in an appropriate and proportionate manner.

Approvals

This statement was approved by UKEF’s executive committee, on 15 September 2021, and by Minister Freer, on 23 September 2021.

Signed: 25 November 2021

Louis Taylor, Chief Executive, UK Export Finance

1. Cabinet Office Tiering Criteria refers to all contracts with a value over £100k. ↩

2. Figures are as per the data contained in the DIT Commercial eSourcing platform. ↩

3. This cross-government group meets regularly to consult on HM Government’s strategy and policies to address modern slavery risks in commercial spend and co-ordinate activity. ↩

4. Considered from the 1st Jan 2021. Above threshold as per PCR 2015. ↩

5. DIT commercial staff must complete within one month of joining the commercial team, this figure reflects the percentage of new starters who joined the team in March 2021. ↩