Government Publishes Guidance on Modern Slavery and Human Trafficking Statements

The Modern Slavery Act 2015 introduces the need for some businesses to produce a statement which sets out the action they have taken to combat the risk of slavery and human trafficking in their business or across their supply chains. This requirement came into force on 29 October 2015.

Who is affected?

All commercial organisations which supply goods or services with a business in the UK and which have a turnover of at least £36 million per financial year must produce a slavery and human trafficking statement for each financial year. When considering the turnover threshold, the turnover of any subsidiary companies must also be factored in, even if those subsidiaries operate wholly outside the UK.

When must your organisation produce its statement?

Businesses are encouraged to prepare the statement within six months of the financial year end in order to ensure that the statement is current and relevant. Those businesses whose financial year ends prior to 31 March 2016 will not be affected until the end of their next financial year. Those who are already part way through a financial year which ends after 31 March 2016 should start to think now about what to include in their statement. However, in the first year their statement need only cover the period since 29 October 2015.

The Guidance

The Act gives little concrete guidance on what must appear in the statement, beyond requiring businesses to detail “the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains, and in any part of its own business”. However, the Government’s recent publication, “Transparency in Supply Chains etc. A practical guide” gives further guidance on what the statement could include, such as information about:

• The organisational structure and group relationships;
• The countries where goods or services are sourced from, including identifying any countries the organisation deals with which carry a high risk of slavery;
• The make-up and complexity of its supply chains;
• Details of relationships with suppliers and others, including trade unions or other bodies representing the workforce;
• Policies on procurement and recruitment;
• Staff training to increase awareness of modern slavery; and
• Due diligence processes, risk assessments and performance indicators that could expose the business to the risk of modern slavery.

Where must you publish the statement?

Once produced, the statement must be signed by a senior person within the business and placed on the company’s website. There must be a link to the statement from a prominent place on the website home page. The Government suggests giving the statement a name/link such as “Modern Slavery Act Transparency Statement”.

Enforcement

If no steps have been taken by an organisation, the statement must confirm that fact, although this will not be enough to avoid enforcement action under the legislation. For those who fail to publish a statement or who publish a statement which states no steps have been taken, the Secretary of State may obtain an injunction forcing that business to comply with its obligations under the Act.

Contact us now for advice on whether your business is caught.