Combatting modern slavery within supply chains may no longer simply be a moral and ethical imperative. On 26 March 2015 the Modern Slavery Act 2015 ("the Act") was passed into law. In an effort to involve businesses in the fight against human trafficking, forced labour and domestic servitude, s54 of the Act will oblige commercial organisations, over a certain size and supplying goods and services in the UK (whether or not they are domiciled here), to report annually on what they have - or haven’t - done to ensure their supply chain is free from modern slavery.
It’s not yet clear to whom the “Transparency In Supply Chain” provisions, which should take effect from October 2015 onwards, will apply. Size will be measured by a company’s global turnover, including that of any group companies. The government has still to set the turnover threshold for the purposes of s54 of the Act, but has considered ranges between £36m and £1bn per annum. This obviously suggests that only large organisations will be targeted. For quoted companies (who must report more widely on human rights) and those operating in jurisdictions which already have modern slavery reporting obligations (e.g. California), this may not be anything particularly new or burdensome. However, if you’re outside of the threshold, but part of a supply chain, then you should expect to see more and more explicit modern slavery contractual obligations flowing down from a principal contractor who might well be caught by s54 of the Act.
It’s important to note that this is a reporting obligation, not an obligation to guarantee that the supply chain is slavery-free per se. A business could technically report that it hasn’t taken any action to combat modern slavery. However, in an age where a positive public image and brand reputation are critical, all businesses operating in the UK should consider the implications of compliance with this new legislation.
If you would like to discuss this further or find out more about how the Commercial & Technology team can help your business please contact Bill Gornall-King on 0118 952 7247 or email [email protected].
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