Never has Coronation Street been more topical.  The Underworld factory is at risk of financial ruin.  The owners of their main client, the O’Driscoll’s have been arrested for imprisoning a young Polish girl, Marta, and using her as unpaid housekeeper/servant.

But behind the fictional storyline lies a serious issue which will affect many businesses.  Large commercial organisations are required to publicly state each year the action they have taken to ensure their business and supply chains are slavery free, or that they have taken no such steps [1]. It is effective for financial years ending on or after 31 March 2016.

Publishing the statement

A commercial organisation must publish a statement if it is:

  • A body corporate or partnership (wherever incorporated or formed) that carries on a business or part of a business in the UK; and
  • Supplying goods or services and has a minimum total turnover of £36 million per year (including any subsidiary undertakings’ turnover).

The statement may include information about the organisation’s structure, business and supply chains, policies on slavery and human trafficking, due diligence processes on slavery and human trafficking in its business and supply chains, 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), effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains as measured against appropriate performance indicators, and staff training on slavery and human trafficking.

In the case of a company, the statement must be approved by the board and signed by a director.  If it has a website, the organisation must publish the statement on the website and include a link to the statement in a prominent place on the homepage. If it does not have a website, it must provide a copy of the statement to anyone who makes a written request for one within 30 days of receiving the request.

In addition to potential reputational damage for failure to comply, the Secretary of State may enforce the duty by injunction.

Key implications

As the slavery and human trafficking statement is a new requirement, key areas to consider include:

  • The statement is additional to the existing requirement for quoted companies’ strategic reports to disclose information about social, community and human rights issues.
  • The organisation will need to develop risk assessment and due diligence processes for preparing the statement and integrate those processes into existing risk management systems.
  • The organisation may already have relevant staff and supplier policies and contractual processes that will need to be developed to address slavery and human trafficking for the purposes of the statement.

Key action points for commercial organisations

The slavery and human trafficking statement requirements may require significant development of the organisation’s risk management processes. Organisations will need to consider the following:

  • Who should prepare a statement? Identify the organisations in the group structure that satisfy the turnover threshold and must prepare a statement.
  • Manage the process. Decide on the co-ordination of teams to be involved in gathering the information for the statement, the wording of the statement and the approval and publication procedures. Appoint a co-ordinator responsible for compliance.
  • Risk assessment. Carry out a risk assessment (using appropriate metrics) and report on those of those parts of its business and supply chain where there is a risk of slavery and human trafficking. If risk is identified, assess the level of risk and take steps to prevent, monitor and mitigate the risk.
  • Policies and contractual provisions. Develop, disseminate and monitor policies and contractual provisions on slavery and human trafficking for staff and suppliers. Check whether suppliers are contractually obliged to audit their own supply chains and report on the findings. Develop adequate systems to ensure compliance with policies and contractual procedures, investigation of potential breaches and the further steps to be taken.
  • Training. Provide appropriate training to staff and suppliers on how to identify slavery and human trafficking and the procedures to follow if it is suspected.
  • Whistleblowing procedures. Ensure that the organisation has appropriate whistleblowing procedures for persons to raise slavery and human trafficking issues.
  • Retain documents. Retain documentary evidence to support conclusions in the slavery and human trafficking statement.

Timeline

Commercial organisations must publish a slavery and human trafficking statement for financial years ending on or after 31 March 2016. Commercial organisations with a financial year that ends before 31 March 2016 do not have to make a slavery and human trafficking statement in respect of that financial year.

Want to know more

If you would like more information in relation to your obligations under the Modern Slavery Act 2015, download our detailed guidance note here.

This post was edited by Elaine Huttley. For more information, email blogs@gateleyplc.com, or view our Modern Slavery Guidance Note.

[1] Section 54 of the Modern Slavery Act 2015 requires


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.