09 February 2016

Does your business supply goods and services? Does it have an annual turnover of £36m or more (including turnover of any subsidiaries whether operating in the UK or abroad)? If so, then you need to produce a ‘Slavery and Human Trafficking Statement’ for each financial year to comply with the Transparency in Supply Chains provisions of the Modern Slavery Act 2015.

Businesses that fall into this category with a financial year end of 31 March 2016 will be the first businesses required to publish such a statement.

Is your business ready for this new legal requirement?

The uncomfortable truth is that modern slavery is happening in the UK. Labour exploitation in the construction sector was identified by the National Crime Agency as one of the highest areas reported by victims in 2013 (in addition to block paving, agriculture and food sectors).

The Modern Slavery Act 2015 was introduced in March 2015 and covers slavery, servitude, forced or compulsory labour and human trafficking. Whilst we would all hope that the organisations we work for and with are not committing any of these abhorrent crimes, one of the aims of the legislation is to drive up standards and prevent modern slavery in organisations’ supply chains. Therefore, the ‘Slavery and Human Trafficking Statement’ requirement set out in section 54 of the Modern Slavery Act 2015, requires organisations to produce a statement setting out the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains and in any part of its own business.

If an organisation has taken no such steps they must still publish a statement stating this to be the case. The statement must be published on an organisation’s website and be accessible via a link from a ‘prominent place on that website’s homepage’. Let the naming and shaming begin…

The Government has been fairly open that the aim of this provision is to drive up standards and create a level playing field between those businesses (who meet the threshold criteria) which act responsibly and those that need to change their policies and practices. Failure to produce a statement can result in a court order compelling an organisation to produce a statement. Failure to do so resulting in an unlimited fine.

Whilst the legal obligation is fairly benign, the implications for an organisations’ reputation depending on what is said in such a statement could be immeasurable.

Fraser Hopkins, Partner, E: fho@bto.co.uk / T: 0141 225 4858