What the Modern Slavery Act means for your business
The Modern Slavery Act (MSA) was introduced on 29 October 2015 and places an obligation on businesses to disclose the steps they take to eliminate slavery in their supply chains. According to the International Labour Organisation, 21 million people around the world are involved in a form of slavery and 25% of those are under 18. This is one of the reasons behind the introduction of the MSA and it is hoped that the level of transparency it requires will help to actively reduce the number of those affected by modern slavery.
What does this mean for your business? In short, the MSA requires any commercial organisation, which supplies goods or services and has an annual global turnover of £36million, to publish an annual slavery and human trafficking statement. This obligation extends to all organisations which conduct business (or part of the business) in the UK, irrespective of where the organisation is based or indeed the amount of work that is conducted in the UK.
The slavery and human trafficking statement must include either a statement outlining the steps the organisation has taken to ensure that slavery and human trafficking is not taking place in any of its supply chains (or in any part of its own business) or, if no steps have been taken, that fact.
Whilst there is no prescribed form, the slavery and human trafficking statement may include details of:
- the organisation’s structure and its supply chains;
- its policies in relation to slavery and human trafficking;
- any due diligence processes in relation to slavery and human trafficking in its business and supply chains;
- the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
- its effectiveness in ensuring that slavery and human trafficking is not taking place in its business supply chains, measured against such performance indicators as it considers appropriate; and
- any training and capacity building about slavery and human trafficking available to its staff.
The first statement should be produced as soon as possible after the end of the financial year which falls on or after 31 March 2016. Whilst there is no prescribed time limit in which to make the statement, the Home Office guidance encourages businesses to report within 6 months of the financial year to which the statement relates. It is important to note that the statement must be approved at a high level of the organisation and be published on the company website with a link to it appearing in a prominent place on the business homepage.
Failure to report could result in the Secretary of State seeking an injunction to force publication of the slavery and human trafficking statement, but more importantly it is considered that pressure groups may target businesses, particularly consumer brands, in vulnerable sectors and subject them to campaigns in order to force annual disclosure. If the reputational damage this could cause to businesses isn’t incentive enough to comply with the disclosure requirements of the MSA, the Government may also decide to name and shame key businesses who fail to produce the statement. In the circumstances we would encourage affected businesses to publish a statement, however brief, as soon as possible in order to comply with their obligations under the MSA.