October 16, 2015

Large organisations required to make public statements under the Modern Slavery Act 2015

Modern Slavery Act 2015

While some companies voluntarily report on human rights and slavery issues as part of their corporate responsibility obligations, from October 2015 the Modern Slavery Act requires companies with a turnover of £36 million or more to prepare a slavery and human trafficking report each financial year.

The £36 million turnover threshold includes turnover of both parent and any subsidiary companies after the deduction of trade discounts, VAT and other taxes.

What is slavery and human trafficking?

Modern slavery has various manifestations, including slavery, servitude, forced and compulsory labour and human trafficking, all of which have in common the deprivation of a person's liberty to exploit them for personal or commercial gain, including securing services by force, threat or deception and securing services from children or vulnerable persons.

How companies should approach this

Companies should be aware that slavery occurs in the UK, so all companies could consider a corporate approach which demonstrates a zero-tolerance approach to modern slavery, showing commitment to acting ethically and with integrity in all business dealings, and to implementing and enforcing effective systems and controls to ensure modern slavery is not taking place anywhere in their supply chains.

Slavery and Human Trafficking report

While there is no prescribed format, a slavery and human trafficking report may include information about:

  • the organisation's structure, business and its supply chains
  • its policies in relation to slavery and human trafficking
  • its due diligence processes in relation to slavery and human trafficking in its business and supply chains
  • the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk
  • its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate
  • the training about slavery and human trafficking available to its staff.

It must also be signed off by a director and published on the Company’s website homepage.

Further guidance prepared by the Home Office will be published later this month (October 2015).

A business can comply with the requirements by simply stating that they have taken no steps during the financial year to ensure that their business and supply chains are modern slavery free. However, many businesses will take the view that having a policy and providing a statement showing steps they have taken may make good business, reputational and ethical sense.

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