The Modern Slavery Act 2015 (MSA) has helped to put modern slavery and human rights issues higher up the corporate agenda. Section 54 requires commercial organisations with an annual turnover of £36 million or more to publish a modern slavery statement each financial year. A positive statement should detail the steps taken by the organisation to ensure that slavery and human trafficking is not taking place in any part of its business or supply chains.

We set out here a couple of recent developments for businesses to think about when drafting their statement and implementing their compliance regime.

Possible amendments to section 54

The first is the introduction of a Private Member’s Bill in the House of Lords on 23 May. The Modern Slavery (Transparency in Supply Chains) Bill would amend the MSA to include the following new requirements:

  1. Commercial organisations with a turnover of £36 million or more would be required to publish their slavery and human trafficking statement in their annual report and accounts, rather than just in a prominent place on their website.
  2. The requirement to publish a statement would apply to public bodies (e.g., central and local government and contracting authorities) for the first time – be careful though, because public bodies undertaking activities of a commercial organisation can in certain circumstances be caught under the current law.
  3. The Bill goes beyond the current requirement for mandatory exclusion from a tender process for an offence under the MSA by creating a further requirement for mandatory exclusion where the economic operator has not made a slavery and human trafficking statement where it is required to do so.

The Bill is due for its second reading on 8 July, by which time it should hopefully become clearer whether it is likely to gain the support of the government and be passed into law. It is worth noting that the Bill as currently drafted would only extend to England and Wales and so the position in Scotland would not change.

Company liability to compensate

The second development concerns details of a civil case in the High Court brought by six Lithuanian men against DJ Houghton Catching Services Limited and that company’s director and secretary. The workers claimed the company had trafficked them to Kent to work as chicken catchers. The case followed a police raid in 2012 in which several suspected victims of human trafficking were freed. This led the Gangmaster Licensing Authority to revoke the company’s gangmaster licence.

The court held in favour of the Lithuanian men on 10 June and found the UK-based gangmaster firm liable to compensate them for (among other things):

  • unlawfully withholding wages and failure to pay the agricultural minimum wage – the court also found that the workers had to travel for up to 7 hours and that, rather than being paid for time spent working and travelling, they were paid for the number of chickens caught
  • charging prohibited work-finding fees
  • failure to ensure the workers had adequate facilities to wash, rest, eat and drink – the men claimed they had to work without proper clothing or equipment in filthy conditions and were threatened and abused by supervisors with dogs

The level of compensation will be determined at a future hearing.

It has been reported that the men were working to supply eggs which are sold in supermarkets across Britain. The case therefore provides a very practical example of the risks of slavery and human trafficking in supply chains. From a reputational perspective, it is more important than ever that commercial organisations caught by section 54 go beyond trotting out a template slavery and human trafficking statement and really engage with the process of identifying and taking action to tackle slavery and human trafficking in their supply chains.

Ethics and compliance

We have previously written about the requirements of section 54 and some of the steps to take to ensure compliance. For those who have not yet begun the process of writing their slavery and human trafficking statement, the best starting points are the UK government’s guidance on section 54 and the UN Guiding Principles on Business and Human Rights, which helps to clarify companies’ human rights responsibilities.

The next stage will be to conduct a risk assessment of both the business and its supply chains. This should take a proportionate approach, focussing on the areas where the impact on workers is most likely to arise. Thereafter, businesses should consider identifying a responsible person, making a positive statement, producing a policy, implementing training, establishing a programme of due diligence, including anti-slavery provisions in contracts, conducting an audit regime and taking appropriate corrective action where issues arise.