The UK Government has now published its plans for when radical new transparency in supply chain reporting comes into effect, brought in by the Modern Slavery Act. As from October 2015, assuming timings are kept in the Parliamentary process, all businesses operating in the UK and which have a turnover of £36 million or more will be required to make an annual slavery and human trafficking statement. There is no minimum “footprint” in the UK, rather it is judged by that turnover threshold. These reports will require director sign off.

Surprisingly, the Government only plans to issue non-prescriptive guidance at the same time as the legislation takes effect. What they have indicated so far is that any statement will need to take account of the following:

  • A brief statement of an organisation’s business model and supply chain relationships
  • A business’s policies relating to modern slavery, including due diligence and auditing processes implemented
  • Training provided to those in supply chain management and the rest of the organisation
  • The principal risks related to slavery and human trafficking including how the organisation evaluates an manages those risks in their organisation and their supply chain
  • Relevant key performance indicators as measures to assess the effectiveness of what is described in the statement, with a view to showing progress year on year

This is ground breaking legislation, and, while there may be some transitional relief, businesses need to prepare urgently to ensure compliance, dealing not just with Tier 1 suppliers but throughout their supply chain. This means appropriate mapping of salient risks, looking again at policies and procedures, training, integration with existing risk management systems, managing supplier contacts and their terms, issues of verification and preparing for the statement. Each business will, as the Government says, need to tailor their response to this legislation to their particular needs and those of their sector.