The Modern Slavery Act – what does your business need to know?

Dispute Resolution - 2 minutes read

There has been much press coverage of the 2015 Modern Slavery Act which came into force on 26 March 2015 but it would appear that many businesses still don’t understand what it means for them. In essence the Act requires businesses to be transparent about what they are doing to address slavery and human trafficking issues, both within their own organisations and amongst their suppliers.

If your business fulfils the following conditions you will be under an obligation to prepare an annual slavery and human trafficking statement:

1. You carry out business in the UK;

2. Your business supplies goods or services; and

3. You have an annual turnover exceeding £36m.

The statement must set out the steps you have taken during the year to ensure that your business and its supply chain are free from slavery and human trafficking and it should include the following:

1. Business model/supply chain description;

2. Slavery and trafficking policy and procedures;

3. Details of staff training;

4. Identification of high risk areas within the business and how the risk is managed; and

5. Summary of how well the business has performed in managing the issue.

As an alternative your business may produce a statement saying that it is not taking any steps to address slavery/trafficking issues, although from a PR point of view it is unlikely that many businesses will be adopting this approach.

The statement must be published on the business website with a prominent link on the homepage. If your business fails to comply it could be at risk of injunctive action forcing it to publish the necessary statement. Whilst we would not expect this to be commonplace there may also be adverse media coverage and damage to reputation especially amongst high-profile businesses.

With the first statements due to be published next year (the requirement applies for financial years ending on or after 31 March 2016) businesses should start reviewing internal policies and supply contracts now to ensure that they are ready to act.

British companies are to be forced to publish evidence on their websites that their operations are not reliant on international slavery, under legislation aimed at exposing details of supply chains to public scrutiny.

The government hopes the information will allow shoppers to make 'more informed decisions at the checkout”. Under the new rules, which come into force on Thursday, large UK-based firms will release information showing they are taking steps to ensure none of the businesses with which they trade use slave labour.