MODERN SLAVERY ACT: ARE YOU READY TO REPORT?

MODERN SLAVERY ACT:  ARE YOU READY TO REPORT?

Suzanne Rab

Did you know that 35.8 million people are victims of modern slavery worldwide?  Modern slavery generates $150 billion profits each year and most of the exploitation occurs in the manufacturing, construction and agriculture sectors.

Does your organisation have a year end on or after 31 March 2016?  If so, you will want to read on to find out how to meet your obligations under the Modern Slavery Act 2015 (“MSA”).

The MSA applies to all organisations with a turnover, or group turnover - that is, the total turnover of a company and its subsidiaries - of £36 million or more which are either incorporated in the UK or carry on a business in the UK.  It requires those organisations to prepare and publish a statement setting out the steps that they have taken during that financial year to ensure that slavery and human trafficking are not taking place anywhere in their supply chains; in any part of their own business. 

Organisations that have a turnover below £36 million may still be required to assist other companies preparing their statements where they are part of the wider supply chain.

The first companies that will have to publish an annual statement are those with a financial year end falling on or after 31 March 2016.  

The Government has published guidance on the new reporting obligation which states that organisations should publish their statement as soon as reasonably practicable after the year end, and ideally within six months of it.

The statement must be approved by the board of directors, signed by a director and must be displayed in a prominent place on the organisation’s website.

The MSA does not specify what should be included in a statement.  The following ‘may’ be included:

• information about the organisation’s structure, its business and supply chains;
• its policies relating to modern slavery;
• its due diligence processes in relation to slavery and trafficking in its business and supply chain;
• the parts of the organisation where there is a risk of modern slavery and the steps it has taken to assess and manage that risk;
• its effectiveness in ensuring that modern slavery is not taking place, measured against appropriate performance indicators;
• training available. 

If an organisation fails to publish a statement, action can be taken against it in the courts and unlimited fines may be imposed. 

I am assisting organisations to comply with their obligation to publish a statement.  Many are also embracing the opportunity to conduct due diligence on the risks of slavery and human trafficking presented by their supply chain and to reinforce their compliance efforts.

Suzanne Rab is a barrister specialising in regulation and competition law at Serle Court Chambers and has wide experience in representing companies on human rights and compliance matters.