20 Oct Where does your Business stand on Slavery?

For many slavery may seem like an antiquated concept.  One from many years ago, one that is banished and no longer of relevance.  The truth of the matter however is that perhaps it still exists but in different forms of the traditional word ‘slavery’.  Indeed, taking this further into modern day application as of October 2015, new obligations have been introduced under section 54 of the Modern Slavery Act and apply to certain commercial organisations.

Would it surprise you to know that it’s estimated that the total number of UK active organisations falling within the scope of this new legislation may be as high as 12,250?!

These businesses will be required to publish an annual anti-slavery and human trafficking statement, which may require significant auditing of their global supply chains and business.

Is my business caught?

That depends on your turnover threshold and where you carry on business, whether you carrying on business solely or partly in the UK.  You need not be a UK business as both UK and non-UK incorporated commercial organisations may be caught by section 54.

Further it will depend on which sections of the Act are involved and where you are based within the UK – part 2 of this blog will cover legislation specific to Scottish businesses.

So what is the threshold?

Well, the Government has confirmed its intention to set it at companies turning over £36 million and above.  Turnover will be determined on a global scale, and not just your revenue generated within the UK.

What do I need to do to comply?

If the Act applies to your organization then you will need to publish one of the following statements:

  • Either a statement of the steps taken during the financial year to ensure that slavery and human trafficking is not taking place. This is to include any part of the business or your supply chain; or
  • A statement that it has taken no such steps.

Let’s face it between the two options; the latter is probably more appealing.  Well, it does come with a lot less work! However you should remember that although the first statement is likely to require significant auditing of an organisation’s global supply chain and business the latter is likely to carry the risk of reputational damage.  Do you really want that risk?  Probably not.

What do I do with the statement once I have produced it?

You will need to publish it on the organisation’s website a link to the statement must be displaying on the homepage in a prominent place.  Although this may sound strange especially in todays era but… where the organisation does not have a website (yes you read right – where the business does not have one) it must provide a copy of the statement within 30 days of receiving a request.

What do I put in my statement?

This is slightly harder to answer as the Government has said that it will not be prescriptive regarding content relating to steps taken and are expecting the contents to vary from business to business.  However, this said, core elements may include the following:

  • an outline of the business model, structure and supply chain relationships;
  • any policies relating to modern slavery, including the due diligence and auditing processes implemented;
  • details of the training available and provided to the organisation’s members;
  • the principal risks including how the organization evaluates and manages those risks in their organisation and supply chain; and
  • any relevant performance indicators to gauge progress on the above annually.

What happens if I do not publish a statement?

The simple and straight forward answer is: the Secretary of State may compel you to do so.

So, what next?

Don’t immediately go into a panic, okay so I know you won’t but it sounded good!

In October, the Government will publish guidance for commercial organisations on how to comply with their obligations under section 54.  The document will include: the kind of information that may be included in the statement along with when and where the statement should be published.

I would suggest that all business that are likely to fall foul of the new section 54 duty start to consider how they are going to handle and respond to this requirement.  This is equally applicable to organisations whose financial year end falls close to the section 54 duty coming into force even though there will be transitional provisions applicable.

With much of our business it is about getting proactive and ensuring you have considered the risk and put in the controls required. As we say #GetProactive #GetCompliant.  Therefore, consideration should be given to putting in place appropriate practices, policies and training relating to slavery and human trafficking.  Get in touch if we can help!

Until next time, #BeSafe #GetControl and #GetLawSavvy.