A Modern Slavery Act for the UK: the uncertainty for business continues

On March 26, 2015 the Modern Slavery Bill received Royal Assent. A consultation was held and in November 2014 the draft Bill was amended to include a transparency in supply chains (TISC) clause.  This has now been enacted.

What will this mean for business? The truth is that this is not exactly clear yet.

The gist of the TISC clause is the introduction of a requirement that certain commercial organisations produce a “slavery and human trafficking statement”. The statement requires sign off from those responsible for the organisation and should outline the steps taken by the business to ensure that no slavery or trafficking is occurring in its supply chain and within its operations.

If no such steps have been taken, a statement to that effect will suffice for the purposes of complying with the law. As it stands, there is also a lack of any real consequence for breaching the TISC clause requirements.

There has been significant criticism and discontent on the shape and form of the obligation which currently leaves all “suppliers of goods and services” in limbo. Although the law has been passed with the TISC clause there remain a few points to resolve. Namely, the turnover threshold – what size companies will be caught? This question is currently the subject of an open consultation which closes on Election Day, May 7, 2015, and the response will pave the way for further regulation and Government guidance on the subject.

In the meantime, what information should in house lawyers pull together should their company fall subject to the legislation?

The Act does not prescribe what is to be included in the slavery and human trafficking statement. In addition to generating further uncertainty this reinforces the lack of any real benchmark being introduced.

However, it does provide some pointers on what might be covered. For example, the statement might include the following information on the organisation:

• its structure, its 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 how 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, including appropriate KPIs, and
• its staff training on slavery and human trafficking

A forward looking business, particularly one that is subject to human rights disclosure requirements under the Companies Act 2006, might also want to think about taking an integrated approach and address its stance on slavery and modern trafficking at strategic level.

Whether one’s organisation is ultimately caught by the Modern Day Slavery Act, the exercise of gathering the relevant information, drafting the statement, and, more importantly, developing an understanding of the current company position with regards to slavery and human trafficking is in itself valuable. In part, this is because there is growing recognition of the potential risk of human rights impacts on business operations. Moreover, in an increasingly globalised world with ubiquitous media presence, there is also rising pressure for companies to obtain a “social license” to operate, and not just a legal one.

Join our free webinar: 

Tackling Trafficking: how to combat modern day slavery - May 7th 2015, 3:30pm

Despite the supposed abolition of slavery, human trafficking and modern day slavery continues to be a problem in the UK and worldwide. But what difference can we make as an individual, a law firm, or a business?

This webinar will explain the nature and scale of the issue today, and bring you up to speed with the legal framework and how it can be used to tackle these issues. Our experts will also provide you with the practical tools you need to combat modern day slavery, in relation to (a) identifying victims of trafficking and (b) supply chain issues.

Click here to register