Barely a month goes by without the issue of modern slavery gracing the news. In August we saw widespread reports of modern slavery and trafficking taking place “in every UK town and city”. Even more recently John Lewis was reported to have ceased its use of a granite supplier in India on discovering concerns about their use of labour.
Against that backdrop, the end of this month will mark the start of ‘year two’ of Modern Slavery Act (MSA) reporting.
As we have previously reported, the MSA requires a commercial organisation which does business in the UK and has an annual global revenue of over £36 million to produce a statement each year of its efforts to combat slavery and human trafficking within its business and supply chain.
Organisations that need to publish a statement are expected to do so within six months of the end of their financial year. The first organisations to be caught were those with a year-end of 31 March 2016. By the end of September 2017, all companies required to comply ought to have published their first statement.
Although definitive statistics remain hard to come by, the Modern Slavery Registry suggests that fewer than 3,000 statements have been published. Against an estimated 17,000 organisations required to comply, the evidence suggests significant default. It remains to be seen what action (if any) is taken against organisations found to be in breach.
Of interest is how organisations will approach their ‘year two’ statements. Many have committed to laudable and ambitious objectives in their first statement. The second statement is an opportunity to report back on progress towards those objectives, as well as identifying other areas for development.
For those approaching their second year of reporting, here are answers to some FAQs:
1. When does your organisation need to publish your second statement?
The obligation to produce a second statement remains six months from the end of the relevant financial year. Organisations are not bound to publish the statement within 12 months of publishing their first statement.
2. What if the organisation’s revenue has fallen below £36m in this new financial year?
The Home Office guidance “strongly recommends” that businesses that produce a statement in one financial year should continue to produce a statement in future years even if their turnover falls below the £36million threshold.
3. If nothing has changed, can you keep the same statement published last year?
No. The MSA requires that a statement is produced for each financial year, and that each statement is properly approved and signed. Statements must contain details of the steps taken during that financial year to combat modern slavery and human trafficking (or a statement that it has taken no steps) so it is highly unlikely that simply repeating a previous year’s statement will be appropriate.