Bulletins | September 25, 2015

Modern Slavery Act 2015 – transparency in supply chains

The Modern Slavery Act 2015 (“the Act”) consolidates and updates protections against human trafficking and slavery. Although wide ranging, the most eye catching part of the Act for businesses will be section 54, which sets out requirements for transparency in supply chains and imposes annual reporting requirements.

The Modern Slavery Act 2015 (“the Act”) consolidates and updates protections against human trafficking and slavery. Although wide ranging, the most eye catching part of the Act for businesses will be section 54, which sets out requirements for transparency in supply chains and imposes annual reporting requirements.

What obligations does section 54 impose?

Any business with a turnover of at least £36 million per year which supplies goods and services in the UK will be obliged to create and publish an annual slavery and human trafficking statement (“the Statement”). The qualifying test is wide and can take into account revenue generated by group companies in the UK and overseas. The Statement needs to set out the steps that an organisation has taken to ensure that slavery and/or human trafficking has not taken place both within its own organisation and within its own supply chain.

Although the legal duty to prepare the Statement will fall on larger organisations, smaller businesses within the supply chain should also be aware of the Act as they may well be asked by their clients to demonstrate how they are complying with the Act.

How will the Statement look?

There is no prescribed form although official guidance may be provided soon. For now, the Act provides a number of examples of what may be included in the statement;

  • the organisation’s structure, its 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;
  • the training about slavery and human trafficking available to its staff.

The Statement can simply state that the organisation has taken no steps to prevent breaches of the Act but from a public relations perspective, this is extremely unattractive.

Publishing the Statement

Once completed, the statement will need high level approval within the organisation. Additionally, the Statement must be published online with a link to the Statement in a prominent place on the website of the organisation. If the organisation does not have a website, a copy of the Statement must be given to anyone who requests one within 30 days of any such request.

What are the sanctions for non-compliance?

Whilst it is not a criminal offence, and there is no financial penalty for failure to publish the Statement, the Secretary of State has the power to seek an injunction requiring the organisation to comply.

When will the new requirements come into force?

Section 54 is due to come into force in October 2015. However, there are transitional provisions which may give organisations extra time to prepare the Statement.

What do you need to do?

  • Are you caught? – check the threshold test to see if you meet the qualifying criteria.
  • Existing policies – review existing corporate responsibility policies and consider whether they already address the issues required to be covered off in the Statement. If not, consider what additional policies you may need.
  • Pay and immigration – ensure that all workers are in receipt of the minimum wage and that you have robust immigration checks in place.
  • Supply chain – review your supply chain and consider seeking assurances that they are committed to compliance with the Act.