Aug 7, 2015

The Modern Slavery Act 2015 and Business Supply Chains

The Modern Slavery Act 2015 ("The Act") was passed in March 2015, with the objective to tackle modern slavery by consolidating numerous offences relating to human trafficking and slavery.

The Act defines slavery offences as holding another person in slavery or servitude, requiring another person to perform forced or compulsory labour, or arranging or facilitating the travel of another for the purposes of exploitation.

The Home Secretary, Theresa May, commenting on its enactment stated that "all sectors of society must play their part."

This is recognised in The Act by the introduction of a section 54 provision for transparency in supply chains. The provision requires that businesses with a turnover of £36 million or more are to publish an annual slavery and human trafficking statement disclosing efforts taken during that financial year to eliminate slavery and human trafficking within their business and supply chains. This requirement is expected to come into force in October 2015.

Which businesses are required to make a statement?

The section 54 provision applies to commercial organisations that supply goods or services, wherever they are incorporated or formed which carry on business or part of a business in the UK and will therefore include foreign businesses. The UK government consulted on the appropriate level threshold from February to May 2015 and in July, Prime Minister David Cameron announced that the turnover threshold will be fixed at £36 million.

It is expected that those businesses covered by the duty carry out due diligence on smaller businesses within their supply chains. In practice this ensures that all businesses consider the risk of slavery and human trafficking as the smaller businesses will have to conform to the duties of their larger business partners.

Content of the Statement

The UK government are yet to provide guidance on the details for businesses to include in the statement, however The Act lists the following suggestions:

Information about an organisation's structure, business and supply chains
Information about an organisation's polices on modern slavery
Information about an organisation's due diligence processes in relation to modern slavery in its business and supply chains
Information about the parts of an organisation's business and its supply chains where there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk
Information about an organisation's effectiveness in ensuring that modern slavery is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate
Information about the training on modern slavery available to its staff

Non-compliance

The Home Secretary can enforce the duty to prepare the statement by way of an injunction in the High Court, requiring the organisation to comply. The risk for businesses may be reputational rather than legal, as enforcement action taken will likely be against high profile organisations attracting greater publicity further this will be regarded as helpful in securing wider compliance with The Act.

Posted by: in: EU/International, News

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