The UK Modern Slavery Act 2015Article
When one thinks about slavery, usually we think about a practice taking place over the last two centuries. Yet, slavery still occurs in our modern world, both in developed and developing countries. In order to combat this modern form of slavery, the United Kingdom (UK) has pulled together and improved several different laws regarding human trafficking and slavery into what is known as the ‘Modern Slavery Act 2015’ (the Modern Slavery Act).
What is the Modern Slavery Act?
The Modern Slavery Act came into force on 29 October 2015. Although the Modern Slavery Act does not affect all companies directly, it can apply to entire supply chains and may therefore affect your company indirectly.
Under the Modern Slavery Act, businesses will be required to:
i. Pro-actively identify, prevent, and mitigate modern slavery in their operations and supply chains; and
ii. Publish an annual statement detailing the business’s approach to (i).
On 15 June 2021, the Modern Slavery (Amendment) Bill (the ‘Amendment Bill’) was introduced. It proposed various amendments, of which the most significant are:
i. it will be a criminal offence to publish a false modern slavery and human trafficking statement;
ii. it will be a criminal offence for companies to continue to use supply changes where the standards of transparency are not met; and
iii. increased standards of transparency in supply chains.
Fines of up to 4% of global turnover or £20 million, whichever is lower may be imposed. Moreover, individuals who are subject to a criminal charge may receive imprisonment of up to two years.
Who does the Modern Slavery Act apply to?
Any business that meets the following criteria is subject to the Modern Slavery Act:
i. It is an incorporated business or partnership; and
ii. It carries on a business, or part of that business, in the UK; and
iii. Its turnover (including any subsidiaries) equals or exceeds £36 per year; and
iv. The business supplies goods or services.
Companies subject to the Modern Slavery Act need to publish their Modern Slavery statements by 30 September of each year on the UK Government’s registry.
Each separate entity in a corporate group has to prepare a statement if they separately meet the above criteria. However, statements prepared by the parent may be used by the subsidiaries as well, provided that each subsidiary is covered in detail. Parent company statements should also cover their subsidiaries’ activities, even when the subsidiaries are not located in the UK. This is highly recommended, especially if the subsidiary is active in a high-risk industry or location.
What do you need to include in a Modern Slavery Statement?
Recommended areas to detail in your Modern Slavery Statement include the following:
1. A review of your supply chain.
Reviewing your operations and supply chain to identify (potential) modern slavery is the first and most vital step. Risk assessments should be conducted to identify areas of risk within the supply chain in terms of location, industry, and materials.
2. Organisation and supply chain structure
Internal procedures regarding procurement should be strengthened. Implement a supplier code of conduct and set out policies and procedures regarding procurement and sourcing for your own staff. You should also consider how you will make sure your staff, contractors, and suppliers are complying with your standards. How is their performance measured?
3. Policies on modern slavery and human trafficking
Internal policies, procedures, and standards will help you to maintain accountability within the business. They will also offer clear guidance to employees and contractors on how to proceed in certain situations. Conduct a thorough review of employment contracts, and implement policies in relation to ethical standards, corporate values, whistleblowing, disciplinary/grievance, and equal opportunities. Furthermore, with regard to recruitment, you should have robust pre-employment checks in place, whereby passports are verified, proof of address is established, and immigration checks are done. These policies should be implemented across your supply chain.
4. Due diligence processes
For your operations and procurement going forward, due diligence procedures need to be set up to ensure that your new partners and suppliers will meet your standards. Your due diligence processes should at least include human rights and labour conditions.
5. Staff training on modern slavery and human trafficking
Train your staff and raise awareness with regard to issues of modern slavery and human trafficking. Also, ensure that they are aware of whistleblowing policies to further enhance transparency and accountability.
How can we help?
LoudLaw can help you to combat modern slavery in your supply chain, run an accountable business, and set up transparent procedures through the following:
- Risk assessment/due diligence processes: we will be able to help you assess where risks are in your current supply chain based on locations, sectors, and other factors that carry potential for modern slavery and human trafficking. Based on the risk assessment, we can set up a due diligence process to continuously audit your existing supply chain, and to vet new suppliers.
- Review of contracts: We can review your existing employment agreements and agreements with suppliers and/or service providers. Accordingly, we can implement improvements where needed to ensure that your contracts are legally sound, compliant, and human rights friendly.
- Policies and procedures: A variety of policies and procedures will need to be implemented in order to embed your anti-human trafficking and modern slavery practices. Creating a transparent and accountable business is not a matter of writing down what you would like to see happen; it requires you to change the company culture.