The first annual slavery and trafficking statements under the Modern Slavery Act (‘Act’) are due for qualifying institutions with financial year-ends on or after 31 March 2016. Institutions that ignore the Act risk being named and shamed by the new Anti-Slavery Commissioner and pressure groups. What’s more, those dragging their feet risk losing work if they are unable to certify their anti-slavery efforts in response to the growth of slavery and trafficking procurement terms. Below, we consider how institutions can prepare to report and review those statements already published.

The duty to report in overview

The Modern Slavery Act requires certain institutions to disclose what activities they are undertaking to eliminate slavery and trafficking from their institutions and supply chains, or state that they have taken no such steps.

The new reporting duty applies to institutions supplying goods or services with global turnovers of £36 million and above, providing they carry on business in the UK. The annual slavery and trafficking statement must be signed by a member of the governing body and approved by the board and made accessible on its homepage. The Government expects that publication will take place within six months of the financial year-end.

While penalties for a failure to report under the Act are limited, pressure groups and others are likely to monitor and test compliance. In response to the Act, qualifying organisations are already requiring supply chain contractors and suppliers to confirm their anti-slavery practices, causing a ripple effect onto smaller organisations not caught by the Act’s reporting duty.

Preparing to report under the Act

What should the slavery and trafficking statement contain?

While the Act requires the publication of an annual statement, it does not prescribe the content and states that the following ‘may’ be included:

  • information about the institution’s structure, its business and supply chains;
  • the institution’s policies relating to modern slavery;
  • its due diligence processes in relation to slavery and trafficking in its business and supply chain;
  • the parts of the institution where there is a risk of modern slavery and the steps it has taken to assess and manage that risk;
  • its effectiveness in ensuring that modern slavery is not taking place, measured against appropriate performance indicators;
  • training available.

Responding in practice

In our recent webinar (view the “Preparing to report” webinar here) we described the typical steps organisations should consider. In summary, these are:

  • securing support from senior management; identifying a cross functional project team and allocating them responsibilities; and identifying stakeholders inside and outside the business, including those in supply chains, to assist;
  • deciding whether to deal with the Act's reporting requirements in isolation or to integrate them with wider human rights reporting;
  • identifying what constitutes your "supply chain" and conducting risk assessments on how the institution may be involved in slavery and trafficking in its operations and supply chain;
  • testing the risk assessment results with stakeholders, prioritising severe risks and taking steps to stop, prevent or mitigate harm;
  • embedding due diligence measures to prevent slavery and trafficking, for example, amending (or introducing new): policies, procurement and recruitment procedures, contract terms, codes of conduct, supplier pre-screening, supplier auditing or collaboration, whistleblowing mechanisms etc;
  • devising training, KPIs and monitoring processes; to raise awareness amongst staff and prioritised suppliers, to monitor compliance, to enable concerns to be raised and to measure progress.

For those institutions with long or higher risk supply chains, the above steps can sometimes feel overwhelming. The Government has couched its expectations in terms of proportionality and that institutions are not expected to guarantee slavery-free supply chains. As such, institutions need to consider what is reasonable and proportionate when preparing to report under the Act; reflecting the severity and likelihood of slavery and trafficking risks; the size of the institution and its resources; the nature and context of its operations (e.g. whether it is in higher risk countries); and its capacity (or leverage) to stop harm. Institutions should also familiarise themselves with the Government’s Guidance.

How are other organisations reporting?

A number of organisations have already published slavery and trafficking statements – early and on a voluntary basis. As such, some do not fully comply with the Act, however, they may be a useful reference for other companies and can be viewed here.

Some pointers from these statements which may also apply to your institution:

  • Confirming which companies, in a group structure, are covered by the statement;
  • Setting out the twelve month period covered by the statement;
  • Referring to membership of a relevant sector or cross industry initiative such as Stronger Together, the UN Global Compact and the Ethical Trading Initiative;
  • Identifying which departments have responsibilities for aspects of anti-slavery activities;
  • Identifying relevant policies with links to policies or a summary of their content;
  • Describing the use of third party questionnaires, on-site audits, external social auditors or external audit standards and steps taken to verify workers’ conditions, such as anonymised interviews;
  • Confirming that suppliers are required to hold their suppliers and sub-contractors to slavery and trafficking standards;
  • Reporting steps taken with higher risk labour practices, e.g. ensuring that UK labour providers have a GLA licence as appropriate and banning the payment of job finding fees by applicants;
  • Outlining any training undertaken including who is trained and the training content;
  • Describing how contractors and suppliers falling under the Act should provide their slavery and trafficking statements for review;
  • Outlining how non-compliant suppliers are managed;
  • Setting up and monitoring new KPIs such as numbers trained, issues raised through grievances/whistleblowing, numbers of suppliers contacted and responded, positive/negative suppliers audits or responses, roll out of new anti-slavery contractual terms etc.