The Modern Slavery Act brings reporting requirements to many wholesalers, larger retailers and food industry firms. Find out who is affected and how to comply.
THE introduction of the Modern Slavery Act this October means mandatory reporting requirements are now looming for many businesses. Those organisations whose turnover is large enough to be caught by the new law should consider how best to ensure compliance, including across their supply chains.
What is it all about?
The Act requires all commercial organisations with a worldwide turnover of at least £36 million to prepare an annual slavery and human trafficking statement. The business does not have to be UK registered and companies that have only small UK sales but whose worldwide turnover exceeds the threshold, must comply with the Act.
What is a “commercial organisation”?
The definition is extremely broad. It covers any corporate body, partnerships, limited liability partnerships and limited partnerships – whether formed in the UK or abroad – provided that it carries on a business, or part of a business, supplying goods or services in the UK.
What are the compliance requirements?
The basic requirement is for a statement to be published each financial year detailing what steps the organisation has taken to ensure that slavery and human trafficking has not taken place within the organisation or its supply chain. It is possible to do nothing and make a statement declaring that no steps have been taken, but for most businesses that is likely to be commercially unattractive as the statement must be published prominently on a firm’s own website.
What should the statement include?
The exact format and content of the statement is for each organisation to determine, but it is recommended that information on the following issues is included: The business and supply chain structure; policies on modern slavery including diligence and auditing processes to guard against slavery and human trafficking both in the business and any supply chains; steps taken to assess and mitigate risks; and training available to staff. The statement must be approved by the board of directors and signed by a member of senior management, such as a director or partner.
What happens if I do nothing?
The Government has the power to apply to the courts to force organisations to comply. Organisations should also be alert to the risk of reputational damage if they do not look like they are taking slavery seriously.
What should I do next?
If you are caught by the turnover requirement, you should start thinking about compliance now and map out your supply chains for audit. This will involve more than your immediate suppliers – those further down the supply chain will also need to be considered. If you have supply chains across the globe, such as those in food production and processing, you will need to identify and prioritise any medium and high risk areas in your supply chain and ensure that targeted reviews are conducted. Determine who in your organisation will have responsibility for the statement. Review your HR practices to ensure that all employees have the right to work and are paid the minimum wage. Develop policies on how your business deals with slavery and human trafficking within your own business and your supplier chains, and provide suitable training to staff, especially those involved in distributor and vendor negotiations. Finally, ensure that your commercial contracts impose reporting obligations on suppliers and their sub-contractors too and update these where necessary.
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