The UK Modern Slavery Act 2015 received Royal Assent in the UK on 26 March 2015. Its main purpose is to consolidate criminal offences relating to slavery, including human trafficking, forced labour and other forms of exploitation. However, it also contains new obligations on businesses which could have a wide reaching effect.
What does the Act mean for businesses?
For the first time ever, a commercial organisation over a certain size will be required to publish a slavery and trafficking statement each year on its website, setting out the steps that it has taken to ensure that there is no slavery or trafficking in its business or supply chains.
Any business which (i) is a company or a partnership with a turnover of Stg£36m or more, (ii) supplies goods or services, and (iii) carries on a business in the UK, must publish such a statement. How total turnover is to be calculated is to be determined by separate Regulations, but it is expected to include the turnover of subsidiaries and that it will apply to global and not just UK turnover. Businesses need not be incorporated in the UK to fall under the obligation.
What the statement is to contain is not set out, however there are a number of areas that should be considered:
- The organisation’s structure, its business and its supply chains;
- The organisation’s policies in relation to slavery and human trafficking;
- The organisation’s due diligence processes in relation to slavery and trafficking in its business and supply chains;
- The parts of the business and supply chains where there is a risk of slavery or human trafficking taking place, and the steps the organisation has taken to prevent this;
- Its effectiveness in ensuring that slavery is not taking place;
- The training about slavery and human trafficking that is available to staff members.
The statement requires board approval and a director’s signature.
Why should businesses comply?
There will be no financial or criminal penalties for failing to comply with the disclosure obligation. The UK Home Secretary will have the ability to bring proceedings in the High Court for an injunction requiring an organisation to comply. However, in practice the negative publicity that failing to comply is likely to attract should be incentive enough for businesses to publish the required statement. In addition, such statements may well become a pre- requisite for tenders for work from Government and other bodies.