The Modern Slavery Act 2015 (the "Act") is the first piece of legislation which unified and simplified previous legislation and introduced a number of measures to combat slavery and human trafficking. These focused on the prosecution of traffickers and offer greater protection for victims.
Prior to the introduction of the Act, the legislation in place was unsatisfactory. Cases were not dealt with properly; victims were not supported; and more traffickers were getting away with their crimes.
In an attempt to address these issues, the Act gave law enforcement agencies the following new powers:
- It increased sentencing powers for slavery offences.
- It banned prosecuting victims of slavery for crimes they were forced to commit by their traffickers.
- It established the first Independent Anti-Slavery Commissioner.
- It placed a duty on large businesses to take an active role in eradicating slavery from global supply chains.
Why is the Act important for the construction industry?
The construction industry is one of the industries identified by statistics as most prone to forced labour through trafficking.
A key requirement of the Act, which is particularly relevant for the construction industry, is the requirement for larger companies (of an annual turnover of at least £36 million) to publish a modern slavery statement at the end of each financial year (the "Transparency Statement").
The Transparency Statement
The government's guidance states that the Transparency Statement should be published "as soon as possible" after the end of the financial year. The government has indicated that it expects the statement to be produced within six months of the end of the financial year to which it relates.
The Transparency Statement need not take any particular form, but it would be sensible to bear in mind that it will be a public facing document so clear and simple language would be advised; and the guidance states that the Transparency Statement should "be succinct but cover all the relevant points".
The Act does not state what information needs to go into the Transparency Statement, but it does suggest points that an affected company may wish to take into account.
It is recommended that the Transparency Statement details the steps taken by the company to monitor and eliminate slavery in its supply chain. This can include:
- an analysis of the risk factors affecting the business
- details of relevant policies currently in place
- staff training
- 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.
If the company has taken no steps to monitor and eliminate slavery, their Transparency Statement should say so.
Sanctions: there is no fine or sanction for failure to produce a Transparency Statement, although in theory an organisation could be issued with an injunction to compel it to publish one.
Reputational damage: the principles underpinning the Act are very topical and attract a large amount of public and media interest. We are currently seeing a number of large organisations putting the prevention of Modern Slavery as a central commitment of their corporate responsibility programmes. All companies should therefore consider the potential for reputational damage if they fail to publish a Transparency Statement or publish something which does not comply with the government's recommendations.
Evolution: the guidance indicates that there is an expectation on organisations to build on their statements year on year and for the Transparency Statements to evolve and improve over time. It will be for consumers, investors and Non-Governmental Organisations to engage and / or apply pressure where they believe a business has not taken sufficient steps to do this.
How can companies demonstrate the prevention of modern slavery?
- Consider specific training for employees who are at a risk of exposure to slavery and trafficking, such as buyers or those working in high-risk areas.
- Draft and regularly review a specific company policy regarding these issues and any related policies (e.g. bribery, corruption and human rights).
- Appoint a compliance officer who will be tasked with monitoring and enforcing the relevant policies.
- Introduce a set of performance indicators to measure the effect of any anti-slavery actions undertaken.
- Establish and regularly review clear supply chain due diligence and audit processes designed to identify and eliminate any slavery or trafficking.
- Engage more closely with suppliers on a practical level to resolve any issues around slavery and trafficking.
The benefits of producing a credible and accurate Transparency Statement are probably wide ranging and, if properly implemented, enshrine and promote the purposes of the Act in the construction industry.
Other benefits may include:
- protection of the organisation’s reputation and brand
- potential growth in the customer base due to higher ethical standards
- improved investor confidence
- greater staff retention and loyalty based on values and respect.
As supply chains become more global and there is an ever growing need for a more flexible workforce the prevention of modern slavery is certainly something to be championed. The publication of Transparency Statements and the adherence to the policies and aspirations within such statements will all help to improve our industry and help to protect those that work in it.
This article was written by Rayann Fearon.