Modern Slavery Act 2015: preparing a slavery and human-trafficking statement

Earlier this year, we reported[1] on how the Modern Slavery Act 2015 had introduced an obligation on organisations to produce an annual statement of the measures they had taken to ensure there was no modern slavery (including human trafficking) in their own businesses or supply chains. A Practical Guide on how to ensure compliance with Section 54 has now been published by the Home Office.

Does our organisation fall within the legislation?

Any “commercial organisation” in any sector carrying on a business in the UK with a total annual turnover of £36 million or more is required to produce a slavery and human trafficking statement for each financial year. It is irrelevant if the organisation pursues charitable aims or purely public functions.  So Registered Providers could be covered.

For those who are part of a group structure, there are a couple of relevant points to note: the turnover of the parent will include the turnover of its subsidiaries, and a subsidiary could be required to publish a statement in its own right if it meets the £36m threshold on its own turnover but it can choose to rely upon its parent’s statement (provided it covers the steps taken by the subsidiary as well as by the parent).

What are the timescales?

Whilst the requirement to publish a statement came into force on 29 October 2015, transitional provisions mean that businesses operating with a year-end of 31 March 2016 will be the first who are required to publish a statement.  The Government guidance suggests publication should be within 6 months of financial year end.

What does the statement need to include?

The purpose of the statement is to set out the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any part of its own business and in any part of its supply chains. If a company has not taken any steps to ensure there is no modern slavery in their own business and/or supply chains, the statement should say so.

The statement should be easy to understand and there are no prescribed content requirements beyond the fact that it must set out all the steps that have been taken (or that none have been taken).  However the Act does include a non-exhaustive list of things that the statement may include information about:

  • the organisation’s structure, businesses and supply chains,
  • its relevant policies (e.g. a slavery and human trafficking policy (though it is not mandatory to have such), its recruitment and/or procurement policies, and contractor/supplier codes of conduct),
  • any due diligence processes in relation to slavery and human trafficking,

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  • the parts of its business and supply chains where there is a risk of modern slavery taking place and how those risks have been assessed and are being managed
  • its effectiveness in ensuring modern slavery is not taking place
  • any internal staff training which has been undertaken on the issue.

The Guidance provides more detail about the sorts of things that a statement might include.

The statement must be approved by the board of directors, be signed by a director and published (or at least for there to be a link to it) on a prominent place on the company website homepage.

It is anticipated that statements will develop and evolve each year as further steps are taken, following investigations and enquiries which may have started in the first year.

What are the consequences for failure to comply?

If a business fails to produce the statement, the Secretary of State may seek an injunction through the High Court requiring compliance. Failure to publish a statement thereafter may result in the company being found to be in contempt of court, which may result in an unlimited fine.

The minimum standard to ensure compliance is a short basic statement. An organisation will be complying with the law even if the statement says that no steps have been taken or investigations have just begun. The Government’s intention is that transparency will drive improvements through accountability to stakeholders.

Conclusion

The obligation (for those it applies to) is to produce a statement of the steps taken to ensure there is no modern slavery taking place, not to guarantee that it isn’t happening.

Registered Providers may consider that the nature of their work (compared to, for example, clothing retailers, international hotel chains and supermarkets) is such that modern slavery will not be a material issue.  Whilst it is legal to publish a statement saying that no steps have been taken, we anticipate that most in the sector will be willing to at least assess the risks in their supply chains and put steps into their tendering/contracting procedures to require their partners (at least in areas where the highest risk is assessed) to take their own measures to work towards eradicating modern slavery further down the supply chain.

For advice on compliance with the Modern Slavery Act 2015 and any other anti-slavery or human-trafficking regulation, please contact a member of the Employment Team.

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