The latest human trafficking regulation comes from the U.K. and is effective as of October 29, 2015. The U.K.’s Modern Slavery Act of 2015 now requires commercial organizations doing business in the U.K. to disclose measures taken to ensure that slavery and human trafficking do not occur in their supply chains. Recently issued regulations and guidance provide insight on how companies should comply.
The U.K.’s new law is just the latest in a series of regulations affecting businesses in the area of human trafficking. Companies must take immediate steps to ensure compliance with the latest federal, state and international human trafficking mandates.
Who Must Comply With the U.K. Law?
The U.K. regulation applies broadly to any commercial organization that supplies goods and services and carries on business in the U.K. with annual revenue of 36 million pounds ($56 million). Notably, there is no footprint threshold or minimum percentage of business that a company must conduct in the U.K. before it is required to comply. It is sufficient that any part of a company’s business takes place in any part of the U.K.
How Do Companies Comply With the U.K. Law?
An affected company must prepare a statement describing the efforts it has taken during the fiscal year to ensure that human trafficking is not taking place in its business or supply chain, or stating that the company has made no such efforts. It must be signed by the appropriate senior leader, and a link to the statement must appear on the company’s homepage.
The law does not mandate what information should be included in the company’s statement. However, it suggests the disclosure may include information about the following:
- The organization’s structure, business and supply chains
- Policies on slavery and human trafficking
- Due diligence processes for detecting and eradicating slavery and human trafficking in its business and supply chains
- Parts of the business that are at high risk for slavery and human trafficking and the steps taken to manage that risk
- The organization’s effectiveness in ensuring slavery and human trafficking do not occur in its business and supply chains
- Training available to staff related to slavery and human trafficking
Companies whose current financial year ends on or after March 31, 2016, will be required to publish a statement for the 2015-2016 financial year. Companies whose financial year ends before March 31, 2016, are allowed a transitional year for compliance, giving them an opportunity to implement policies and practices to combat human trafficking in their supply chains.
What This Means to You
This new U.K. law adds to the growing list of responsibilities that governments are imposing on companies in an effort to eradicate human trafficking and slavery from corporate supply chains. Companies must conduct audits and develop human trafficking compliance policies now to get into compliance with these new regulations.
In March 2015, the U.S. government released new Federal Acquisition Regulation provisions on human trafficking that apply to any company with a federal contract obtaining services or products overseas. Additionally, government contractors or subcontractors with an international component of more than $500,000 (excluding contracts for commercially available off-the-shelf items) are required to have a tailored human trafficking compliance plan that includes a process for employees to report violations and procedures for preventing agents and subcontractors from engaging in human trafficking.
In 2012, California’s Transparency in Supply Chains Act took effect, requiring retailers and manufacturers doing business in California, with annual worldwide gross receipts of more than $100 million, to disclose what efforts, if any, they make to eradicate slavery and human trafficking in their direct supply chain.
Some companies will view the new requirements as a welcome opportunity to highlight what they are already doing to combat the $44 billion illegal human trafficking industry. For others, human trafficking is a foreign issue (or one that has been ignored). New laws and regulations continue to unfold as governments take step to hold corporations responsible.