In October 2015, a new provision arising under section 54 of the Modern Slavery Act 2015 comes into effect and applies to commercial organisations that carry on business or part of their business in the UK with a turnover of £36 million or more. This Alert provides guidance for organisations to consider in regards to preparing an annual statement on steps they have taken (or not taken) to ensure against slavery and human trafficking.
It is important to note that turnover is determined on the basis of worldwide turnover and not UK turnover alone.
An organisation will need to publish either (i) a statement of what steps it has taken to ensure that slavery and human trafficking are not taking place in any of its supply chain or any part of its business or (ii) a statement that it has taken no such steps.
The onus on an organisation therefore appears high. To comply with the first requirement noted above, an organisation should consider conducting audits on all of its supply chains, along with all parts of its business, and if a statement is made that no such assessing steps have been taken, the question will likely be, why not? The potential ramifications are significant for an organisation that confirms it has not taken steps to ensure that slavery and human trafficking have been monitored.
The statement cannot be hidden and must be published on the organisation's website, including on its home page.
The key essentials to incorporate in the statement include the following:
- the organisation's current structure, business model and supply chain relationships;
- the organisation's policies relating to modern slavery;
- the audit undertaken to assess whether modern slavery has taken place;
- the training provided internally and, where applicable, externally to supply chain parties;
- the risks identified and arising from slavery and human trafficking;
- how the organisation manages the risk; and
- year-on-year progress reports detailing how the organisation assesses its annual progress on identifying, and minimising, risk.
Mandatory publishing of an annual statement will need to be documented with evidence of steps taken before any such statement can be made. Commercial organisations that do not comply with this requirement are subject to civil proceedings by the Secretary of State to compel them to comply.
What This Means for Employers
- Seek assistance in carrying out audits of your business and your supply chain relationships;
- Raise the issue with your board because prompt attention may assist in preparing a thorough and more accurate annual statement will be;
- List your business and supply chain relationships, which may be substantial;
- Seek training on how to fulfill compliance requirements; and
- Receive assistance with developing a tailored programme to ensure compliance.