The Modern Slavery Act came into force in 2015 to combat modern slavery in the UK. The Act created a number of new criminal offences relating to modern slavery and trafficking. It also introduced a legal requirement for organisations of a certain size to publish a slavery and human trafficking statement.
Which organisations need to publish a slavery and human trafficking statement?
A commercial organisation or business needs to publish a slavery and human trafficking statement if it meets all of the following requirements:
- It is a corporate body or partnership;
- It supplies goods or services;
- It operates in the UK (in whole or in part); and
- It has an annual turnover of £36 million or more (including the turnover of any subsidiaries, whether or not those subsidiaries are based in the UK).
Businesses which don’t meet the above thresholds can nevertheless voluntarily produce and publish a slavery and human trafficking statement. Procurement teams may expect suppliers to have a published policy on slavery and trafficking so voluntary compliance can have commercial advantages. Voluntarily publishing a statement (which explains the actions taken by the business to protect its supply chain) also demonstrates the business’s ethical values.
When does the statement need to be published?
The Act doesn’t specify. However, the Home Office advises that the statement should be published as soon as possible following the business’ financial year end and, at most, within six months of the financial year end.
Businesses may wish to publish the statement at the same time as their annual accounts.
What does the statement need to contain?
The statement must outline either:
(a) the steps the business has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of the business’ supply chains and in any part of the business; or
(b) that the business has taken no such steps to check or ensure that slavery and human trafficking is taking place.
The statement should be succinct and written in simple language so that it is accessible to everyone. The current guidance suggests that the statement may include information about:
- the structure of the organisation, business and its supply chains;
- the organisations’ policies in relation to slavery and human trafficking;
- the organisations’ due diligence processes in relation to slavery and human trafficking in its business and supply chains;
- identification of the parts of the business and supply chains where there is a risk of slavery and human trafficking taking place and the steps being taken to manage the risk;
- the organisations’ effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate; and
- the training about slavery and human trafficking available to the organisations’ employees.
Whilst currently it is not compulsory to include these points in the statement, guidance suggests that organisations should include them where possible. Future reform outlined below will likely make the above points mandatory in every statement that is published.
Publishing and registering the statement
The statement should be clearly linked in a prominent place on the business’ website if they have one. If the business does not have a website, a copy of the statement must be provided to anyone that makes a written request for one within 30 days of receipt of the request.
The Government encourages businesses to submit their statements to the modern slavery statement registry. Once submitted, each statement is published on the registry website. At the moment, this is optional.
Presently, the Secretary of State may enforce the duty to prepare a slavery and human trafficking statement by way of injunction in civil proceedings. This can ultimately lead to the business having to pay a fine (currently unlimited) if it fails to comply.
Failure to publish a statement can also lead to reputational damage for the business and may be detrimental to its tender submissions.
The Government proposes to introduce financial penalties for businesses which fail to comply with their obligation to publish a modern slavery and human trafficking statement. Proposed reforms also include creating a list of mandatory information which must be included in each statement. Publication of statements on the modern slavery statement registry may also become mandatory.
The changes are part of the Modern Slavery Bill which, at time of writing, is due to be discussed by parliament.
If you would like assistance on understanding your obligation to publish a modern slavery and human trafficking statement then please contact Ryan Mitchell.