This is an update to a previous briefing on the requirements of the Modern Slavery Act which can be found here.
The Modern Slavery Act 2015 ("MSA") came into force in October 2015 and the obligations to publish a Transparency in Supply Chain Statement ("TISC Statement") took effect as of 31 March 2016.
Any company that carries on business in the UK and has an annual turnover of £36m or more will have to produce a supply chain transparency statement for the first financial year that ends on or after 31 March 2016. This must then be published in a prominent place on the company's website.
On 29 October 2015 the Government issued a 46 page guidance paper to accompany the Act.
Below we have answered some FAQs to help you determine who must comply and how best to do so.
1. Does my company need to comply?
Any company, wherever incorporated, that has a turnover of greater than £36m and that provides goods or services in the UK must produce a statement. For more detail on which members of an international group of companies must comply, please see our full briefing.
2. When do we need to comply?
The Government guidance states that a TISC Statement should be published "as soon as reasonably possible" after the end of the financial year. The MSA does not specify a deadline for publishing, but the Government has indicated that it expects a TISC Statement to be published within six months of the end of the financial year to which it relates.
3. What form must the TISC Statement take?
There is no prescribed form for the TISC Statement, so it is up to the company to decide how they present the information. Remember that this is a public-facing document and so should be drafted in simple language rather than containing lots of industry or legal jargon. To keep it succinct, links can be inserted to relevant policies or other information already available on the company's website, rather than wording being repeated in full.
4. What information needs to go in the TISC Statement?
Again, the MSA does not dictate what a TISC Statement needs to contain but it does point to elements that an affected company may wish to take into account. Our recommendation is that a TISC Statement should detail the steps taken by the company to monitor and eliminate slavery and human trafficking in its supply chain. As we detail in the full briefing, this can include anything from an analysis of the risk factors affecting the business, to details of relevant policies currently in place, staff training and any supply chain due diligence undertaken. It is important to note that this is an annual requirement and so the information should refer specifically to the financial year in question.
5. We are a group of companies with several websites: which website should the statement be published on?
The Government has clarified that the TISC Statement should be published on the homepage of the website that is most relevant to the organisation's UK business, for instance the landing page for UK customers. If more than one website fulfills this criterion, then each should carry the TISC Statement.
6. What counts as a "prominent place"?
Government guidance states that the link to the TISC Statement should be directly visible on the homepage, or accessible from a drop-down menu on the homepage. They recommend a link such as "Modern Slavery Act Transparency Statement":
Click here to view image.
7. What happens if I don’t comply?
If a company that is obliged by the MSA to publish a TISC Statement fails to do so the Secretary of State is empowered to force that company to do so. It is questionable how many such enforcement actions the Secretary of State will undertake. However, it is likely that compliance with the MSA is of media interest and companies in the ambit of the MSA should consider the potential for reputational damage if they fail to publish a TISC Statement when required to do so or publish a half-hearted TISC Statement that falls below the Government recommendations.