ankles tied with rope

Written by Melanie Darlington, Senior HR Consultant

From October 2015, the Modern Slavery Act 2015 (section 54) requires some commercial organisations to publish an annual anti-slavery and human trafficking statement, which means they will need to conduct an audit of their global supply chains to fulfil this obligation.

The Act stems from a report published by the Centre for Social Justice in 2013 highlighting the existence of modern slavery in the UK, calling for businesses to “make public the efforts they are making to develop more transparent supply chains, and to recognise their responsibility in stamping out this crime.”

Those affected are commercial organisations (it does not affect public authorities) with a turnover above £36 million that are carrying out business, or part of a business, in the UK. Both UK and non-UK incorporated commercial organisations will be included. However, whilst the direct impact is currently on the significantly larger organisations because it relates to ‘their supply chains’, it will impact on many of our clients who are SMEs and who work for, or with, larger organisations.

These organisations will need to publish a statement of the steps they have taken to ensure slavery and human trafficking is not taking place in their supply chain or any part of the business, or a statement that they have taken no such steps. A positive statement is likely to require significant auditing of an organisation’s global supply chain; a negative one is likely to carry the risk of reputational damage.

The organisation must publish the statement on its website (if it has one) and include a clear link to it from the homepage. Organisations without websites must provide a copy of the statement within 30 days of receiving a request to see it. If an organisation fails to publish the annual statement, it may be compelled to do so by the Secretary of State, and Directors risk imprisonment.

The content of these statements is non prescriptive but possible core elements may include:

  • an outline of the organisation’s business model, structure and supply chains
  • the organisation’s policies relating to modern slavery, including who is responsible for the policy, what will happen if a supplier is found to be involved in modern slavery and what checks are conducted when choosing suppliers
  • details of relevant training available and provided to members of the organisation
  • the principal risks related to slavery and human trafficking, including how the organisation evaluates and manages those risks in its business and supply chain
  • relevant performance indicators to gauge the organisation’s progress on the above from year to year

Currently it is predicted that only 12,000 companies will be required to submit a report, and whilst there are no financial penalties in failing to provide the report, it is likely that the requirements will be adhered to, for fear of reputational damage as noted above.

Here at Alcumus we have seen a large increase in advice requests in this area, as tender documents which affect organisations with considerably less turnover than that noted above are starting to include requests for how each business intends to deal with modern slavery.

If your business is in a supply chain then it is likely you will be affected in some way, and there is a prediction that the high turnover organisations might refuse to do business with or use the services of companies who do not provide guidance on how they aim to eradicate slavery from their supply chain.

For more information of what needs to be included in a relevant policy, please seek guidance from your HR Consultant.