UK companies operating at home and overseas will soon be preparing reports showing how they prevent forced labour in their supply chains, in order to comply with the new Modern Slavery Act

“It is simply not acceptable for any organisation to say, in the 21st century, that they did not know [about slavery in the supply chain],” wrote Theresa May, the UK’s Home Secretary, in a government guide to fulfilling the transparency requirement of the law. “By increasing supply chain accountability, more workers will be protected and consumers will have greater confidence in the goods and services they buy.”

The transparency in supply chains provision in the law, which came into effect on 29 October, requires businesses with an annual turnover of £36m or more to prepare an annual statement outlining the steps they have taken to ensure there is no slavery or forced labour in their own businesses and their supply chains. That does not mean they have to guarantee there is no forced labour in their supply chains; they have to explain what actions they have taken to keep the supply chains free of forced labour. Companies that have taken no action still must produce a statement reflecting that.

Businesses with a financial year-end of 31 March 2016 will be the first ones required to publish a statement under the transparency provision. A parliamentary bill having been introduced in June 2014, the Modern Slavery Act was approved on 26 March 2015.

Each parent and subsidiary organisation, whether or not it is based in the UK, which meets the requirements must produce a statement. Any relevant material used in other reports, such as the CSR report, can be included in the slavery and human trafficking statement, according to the guide.

Reporting criteria

While not required, suggestions from the government for the statement’s content include “the organisation’s structure, its business and its supply chains; its policies in relation to slavery and human trafficking; its 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 or supply chains, measured against performance indicators it considers appropriate; and what, if any, training and capacity building about slavery and human trafficking is available to the staff”.

Due diligence processes can root out slavery

Companies are encouraged to list all the steps they have taken to detect and prevent slavery. The information presented in each statement will be determined by the organisation’s sector, the complexity of its structure and supply chains, or the particular sectors and nations in which its suppliers are working, according to the guide.

A senior company official is required to sign and approve the statement. The statement must appear on a company’s website, if it has one.

If a business does not produce a slavery and human trafficking statement, the Secretary of State can seek an injunction through the High Court, requiring the organisation to comply, according to the guidelines. If the organisation fails to comply with the injunction, it will be in contempt of a court order, and subject to an unlimited fine.

The law puts pressure on companies operating in parts of the world where conditions for workers have already been under scrutiny, such as the Middle East and Africa, and may require more corporate involvement in overseas operations. The problem for many companies overseas is that they often hire recruiters to find employees, who in turn hire middlemen to find workers, adding links to the supply chain of which company officials may not even be aware.  

modern slavery  slavery  anti-slavery  transparency  regulations 

comments powered by Disqus