The coming into force of the Modern Slavery Act has ensured that large swathes of the commercial world will be enlisted in the fight against slavery and trafficking as any company with a global turnover above £36 million will be required to produce a slavery and human trafficking statement for each financial year ending on or after 31 March 2016.
The purpose of the statement is to help prevent modern slavery in organisations and their supply chains. It is thought that by increasing transparency and ensuring the public, consumers, employers and investors know what steps an organisation is taking to tackle modern slavery there will be a reputational incentive on companies to provide such statements. Additionally, it is hoped that organisations will build on those statements year-by-year and develop their practices.
The Act will apply to a body corporate or partnership (wherever incorporated) that carries on a business or part of a business in the UK supplying goods or services which has an annual turnover of £36 million or more. Turnover is calculated by reference to the turnover of that organisation and the turnover of any of its subsidiary undertakings (including those operating wholly outside the UK). Indirectly, the act will also apply to many smaller companies that are a part of a supply chain who, although not directly subject to its provisions, will need to report their own actions relating to tackling modern slavery to the end client.
There is no stringent structure or content requirements for the annual statement aside from the fact that it must contain the steps taken to prevent modern slavery in its supply chains and own business or as the case may be that it has taken no steps. However it has been suggested that a statement includes information about:
- 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; and
- The training and capacity building about slavery and human trafficking available to its staff.
In addition, it should also be noted that the statement must be approved by the board of directors, signed by a director and published clearly on the company’s website with a link on the homepage.
Compliance itself is fairly simple as, as noted above, an organisation could simply publish a statement that it has taken no steps. In fact, it has been suggested that there is little legal risk in publishing a false statement, although that is hardly to be recommended. In any event, there is a real risk of reputational damage where there is a perception that a company has not taken sufficient steps or tried to mislead the public.
The next steps for any organisation caught by the requirements of this new requirement should be to decide the type of statement they wish to produce and to consider what action should be taken to produce such a statement.