The aim of the Modern Slavery Act 2015 (Act) is to combat the crimes of slavery and human trafficking and UK businesses have a key part to play in this.
Section 54 of the Act requires an organisation meeting all the following criteria to prepare a slavery and human trafficking statement for each financial year in order to demonstrate it is tackling the issue head on:
- It is a ‘body corporate’ or a partnership, wherever incorporated or formed.
- It carries on a business, or part of a business, in the UK.
- It supplies goods or services.
- It has an annual turnover of £36 million or more.
Annual slavery and human trafficking statement
The statement should include information about what steps a commercial organisation has taken during the financial year to ensure slavery and human trafficking is not taking place in its business and/or its supply chains. If no such steps have been taken this must be made clear.
The statement must be approved by the board, signed by a director and published on the company website. Any entity without a website must ensure that the statement is provided to anyone who makes a written request to see it within thirty days of the request.
The Home Office expects businesses to make their statement as soon as reasonably practicable after the end of the financial year and, in any event, within six months of such date.
March 2019 - Home Office guidance
Recent government guidance on how to publish an annual modern slavery statement (issued on 12 March 2019) helps organisations decide if section 54 applies to them and how they and their supply chain can demonstrate compliance.
The guidance emphasises that statements should cover six key areas: organisation, structure and supply chains; policies in relation to slavery and human trafficking; due diligence processes; risk assessment and management; key performance indicators to measure effectiveness of steps being taken; and training on modern slavery and trafficking.
The aim of the statement is to show that an organisation is:
- Acting transparently and disclosing information about any modern slavery risks identified and what actions have been taken in response to them;
- Prioritising risks and targeting actions to have the most impact; and
- Making year-on-year progress to address those risks and improve outcomes for workers in the business and supply chain.
Modern slavery and human trafficking audit
In October/November 2018 the Home Office wrote to the chief executives of circa seventeen thousand companies that it believed are required to publish an annual slavery and human trafficking statement to remind them of the relevant obligations under the Act.
It is worth bearing in mind that while there is currently no criminal enforcement for a failure to comply with the Act, the duty to prepare a slavery and human trafficking statement may be enforced in civil proceedings by way of an injunction (section 54(11)).
There is also political momentum around the issue. In July 2018 the Home Secretary commissioned an independent review of the Act with the aim of considering the operation and effectiveness of and potential improvements to the Act. The final review report was released earlier this year making a number of recommendations to enhance the effectiveness of the Act and the UK government has since published its response that it accepts the majority of the recommendations.
Final thoughts
Modern slavery has very serious consequences for the lives of its victims and businesses have a key part to play in the quest to eradicate it within the UK. The publication of the statement is a vehicle through which a commercial organisation is to demonstrate its contribution.
There is also a commercial imperative for entities to be pro-active in addressing the issue. While sanctions for non-compliance may currently not offer a substantial deterrent there is government focus on this area and perhaps before long businesses may find that a failure to comply with the Act could elicit commercial consequences.
