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Modern slavery and transparency in business supply chains
01 September 2015

The Modern Slavery Act 2015 (the Act) is intended to tackle modern slavery by consolidating various offences relating to human trafficking and slavery in the UK.

The Act has raised the bar for UK companies in terms of the transparency they must demonstrate in their efforts to combat 21st century slavery. Certain businesses will soon be required to issue a public statement about what they are doing to tackle this challenging issue within their own operations and over their supply chains.

What is modern slavery?

The Act doesn’t define what is meant by “slavery” but refers to the offences of slavery, servitude and forced or compulsory labour. “Human trafficking” concerns the arranging or facilitating the travel of another person with a view to exploiting them.

Who will need to comply?

Any business supplying goods or services with a minimum turnover of 36 million pounds will be required to publish on their website an annual ‘slavery and human trafficking statement’. A link to the slavery and human trafficking statement must be included in a prominent place on the business website homepage.

When will the reporting requirement start?

Although the Act was passed into law on 26 March 2015 the reporting requirement will not begin until October 2015. The government has indicated that there will be transitional provisions to allow businesses sufficient time to prepare their statements where the financial year end of a business is within close proximity to the date that the duty comes into force. 

What should the statement include?

The statement must confirm the steps the organisation has taken during that year (if any) to ensure that slavery and human trafficking are not taking place in any of its supply chains or in any part of its own business.

Additionally the Act lists six areas that the statement may include information about:

  • The organisation’s structure, business and its supply chains;
  • Its policies in relation to slavery and human trafficking;
  • Its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
  • The parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
  • Its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate; and
  • The training about slavery and human trafficking available to its staff.

In theory a business could publish a statement that it has taken no steps to deal with slavery or human trafficking and it would still adhere to the Act’s reporting obligation. However this approach would of course run the risk of damaging the business’s public image and brand reputation.

What if a business fails to publish a statement?

Should a business fail to comply with the Act’s reporting obligation then the Secretary of State can enforce the duty to prepare a slavery and human trafficking statement by way of injunction. However, public scrutiny should provide the primary incentive for a business to comply with its reporting requirements, as a failure to do so could result in negative stakeholder and media attention.

What should businesses do next?

Large businesses and those with complicated supply chains should start thinking about compliance now and how they will integrate their reporting obligation into any existing risk management systems. Businesses will need to engage with interested stakeholders both prior to and following the publication of their statement.

Steps to consider include:

  • Ensuring slavery and human trafficking are covered in a business’s Corporate Social Responsibility  policy;
  • Expanding any relevant template agreements or internal policies to cover any concerns about slavery or human trafficking;
  • Investigating a business’s supply chains (its contractors, sub-contractors etc) and identify members of those supply chains who can confirm the measures suppliers take to ensure slavery and human trafficking is not taking place;
  • Conducting a risk assessment to identify and prioritise any potential higher risk areas in the supply chain; and
  • Appointing an individual or small group to oversee the investigation and the production of the statement.

The government is currently developing guidance on this new duty and the kind of information that may be included in the statement. The guidance shall be clear and, where possible, tailored for the differing needs of business sectors. It is the government’s intention to publish this guidance in October 2015.

We will provide more information when the guidance is published.

For more information on anything in this article or to find out more about what the Employment Team can offer please contact the employment group on 0118 952 7284 or email [email protected] .

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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