The Modern Slavery Act 2015 (Act) is expected to come into full operation in October 2015, and large enterprises are given an extra duty under the Act to ensure no slavery or human trafficking happens in its course of business. The enactment of the Act shows the government’s determination to combat against such problems, and all companies should be aware of it regardless of their size.

What constitutes slavery and human trafficking?

In a nutshell, slavery means having the ownership of the person and compulsory labour means forcing one to work involuntarily with the threat of any penalty. As for human trafficking, it means arranging or facilitating the travel of the person with a view to exploit him/her. Exploitation here can be one of the followings: making the victim subject to slavery, servitude, compulsory labour, or sexual exploitation; removing the victim’s organ(s); secure service from the victim by force/threat/deception.

New Business Obligation under the Act

Under Part 6 of the Act, any companies supplying goods or services with a total turnover of no less than £36 million has to prepare a Slavery and Human Trafficking Statement (Statement) at the end of each financial year. The statement should be published on the website of the company, which is clearly visible and accessible to the general public. If the company has no website, the statement must be available upon request.

What to include in the Statement?

The statement should either show the steps taken by the company to ensure no slavery or human trafficking be involved in supply chains or any part of the businesses, or state that the company has never taken any such steps. If steps are taken, it is advised in the Act to include the followings:

  • Overview of the company’s structure, business and its supply chains.
  • Company’s policies in relation to slavery or human trafficking.
  • Due diligence process in relation to slavery or human trafficking.
  • Any part of the business or its supply chains that would involve the risk of slavery or human trafficking, and steps taken to assess and manage the risk.
  • Effectiveness in ensuring that slavery and human trafficking are not taking place.
  • Training about slavery and human trafficking that is available to staff.

Why is this important?

The Act can be seen as the government’s strong will to eradicate slavery and human trafficking within the UK. With the maximum penalty of the offences punishable in the Act has been substantially increased from 14 years to life imprisonment on indictment, it is therefore important for any entities, including businesses, to ensure slavery and human trafficking do not take place. This applies to all companies, regardless of the amount of their annual turnover.

For businesses with supply chains spreading all over the world, in particular developing countries with poorer labour protection and education, it is advised that a full survey should be conducted in order to eradicate the risk of being prosecuted under the Act. It is also a good means to establish a positive and socially responsible image of the company.