21 September 2015

The Modern Slavery Act 2015 - do you comply with upcoming legislation?

Sadly the business of slavery and human trafficking is not consigned to the history books, but is a growing problem affecting all parts of the world including the UK and Europe.

One of the last bills to receive Royal Assent under the coalition government was The Modern Slavery Act 2015. This legislation is aimed at recognising, preventing and criminalising forced labour and trafficking, and one of the measures introduced by the new Act is designed to get businesses to assist in eradicating slavery.

Part 6 of the Act, which is expected to come into force in October 2015, is designed to ensure that companies, and their directors are held accountable for conditions in their supply chains.

In order to achieve this aim, section 54 of the Act requires that large businesses, with a turnover of over £36million will have to publish an annual statement stating the steps that they have taken to ensure that slavery and human trafficking are not taking place in their business or their supply chains. If the business has a website, then the statement must be published on the website. A business could alternatively publish a statement saying that they have taken no such steps, however it is expected that this option will not be popular as it may damage the reputation of the business.

Section 54 is worded in such a way as to leave it open to businesses to determine how best to comply with its requirements, and does not specify the exact steps that a business must take to ensure transparency in its supply chain. However, such measures are likely to include detailed policies on slavery and forced labour and due diligence processes on suppliers.

This means that anti-slavery and trafficking obligations and related policies are likely to be incorporated into procurement agreements and suppliers will be required to include such provisions into any agreements with sub-contractors.

So, even if a business is itself not large enough to trigger the Section 54 obligation to publish annual statements, it will be affected if it forms any part of the supply chain into such a business as it may be required to implement anti- slavery and trafficking policies itself in order to be eligible to be selected as a supplier. 

To get ready for the implementation of the Modern Slavery Act businesses may wish to: 

• draft and implement a policy on forced labour and trafficking
• ensure that they select suppliers who can demonstrate compliance with the policy
• require suppliers to have similar obligations in any sub-contracting agreements
• train their staff on the policy and the importance of procedures designed to identify modern slavery and trafficking risks

The requirements of section 54 may be enforced by the Secretary of State seeking an injunction through civil proceedings in the High Court and there are no Criminal law sanctions or penalties. It is expected that these measures are something that businesses will want to do as part of the wider move towards Ethical Trading polices being demanded by investors and shareholders.