The UK’s Modern Slavery Act 2015 (MSA) will introduce a new requirement for global commercial organisations to publish a slavery and human trafficking statement about steps taken during each financial year to ensure slavery and human trafficking has not taken place in any part of the business or any supply chain. We expect the MSA to come into force during October 2015 and the UK government has indicated that it will prepare transitional provisions and guidance to allow businesses sufficient time to prepare their statements.
Who will it affect?
The new duty will apply to commercial organisations supplying goods or services with a minimum global turnover of £36million per year to state the steps they have taken to ensure that their supply chains are slavery free, or that they have taken no such steps. It will apply wherever in the world businesses, including partnerships, are incorporated if they are carrying on any part of their business in the UK. Examples of affected businesses include those which rely on individuals to provide goods and services but who are not employed directly such as manufacturers of consumer goods, service industries whose supply chain includes outsourced providers (e.g. catering, cleaning) and those organisations that do not already have robust supplier selection policies covering slavery and human trafficking.
What is slavery and human trafficking?
This is conduct that constitutes various offences such as slavery, servitude and forced or compulsory labour and human trafficking. It includes conduct that, even if not an offence extraterritorially, would constitute an offence in the UK if the conduct took place in the UK.
Contents of the statement
The statement, approved by board members (or LLP members) must be either about the steps the organisation has taken during the financial year to ensure slavery and human trafficking is not taking place in any of its supply chains or any part of its own business; or that it has taken no such steps (although the latter statement may have adverse PR consequences). Although there is no prescribed form, the statement may include information about:
- the organisation’s structure, business and supply chains
- any relevant policies relating to modern slavery and human trafficking and its due diligence processes in its business and supply chains
- staff training
- evaluating the parts of its business and supply chains which carry a risk of slavery and human trafficking, and steps taken by the business to assess and manage that risk
- an organisation’s effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against performance indicators.
If the organisation has a website, it must publish the statement on that website and include a link to the statement in prominent place on the homepage. In the absence of a website, a business must provide a copy of the statement to anyone making a written request within 30 days of receipt of the request.
There are currently no criminal or financial penalties of non-compliance but the UK government may enforce the duty to prepare a slavery and human trafficking statement and require organisations to prepare a statement, but reputational considerations and public scrutiny may also drive compliance and ensure statements are made.
As the reporting obligation is expected to commence in October 2015, we are expecting both the transitional provisions and further guidance to be published soon. In the meantime organisations should be considering both their existing processes and policies and those of their suppliers, and consider any additional measures, in order to ensure compliance.