“Great indeed are our opportunities, great also is our responsibility”*.
On the 26th of July 1833 William Wilberforce, the voice of the abolition movement in Parliament, was advised that the Abolition of Slavery Bill had passed its third reading in the House of Commons, spelling the end of slavery in the British Empire. Three days later, on the 29th of July, he died, having achieved his object of eliminating the slave trade in British territories, thanks to his tireless efforts throughout his adult life and those of many dedicated others.
Depressingly however, slavery is not something we can consign to the history books: while it is difficult to be accurate given the hidden nature of modern slavery, figures released by the Home Office in November 2014 indicate that there are between 10,000 and 13,000 victims of slavery in the UK, with world-wide figures estimated at 29.8 million. There are many forms of slavery and trafficking including sexual exploitation, domestic servitude, forced labour and criminal exploitation. High risk sectors include construction, hospitality, agriculture and food preparation as well as processing and packaging (click here for a recent example). Many of the victims are children. It is a sobering thought that nearly 200 years after Wilberforce saw his life’s purpose fulfilled, such is the scale of the problem of modern slavery and human trafficking, Parliament has been left with little option but to pass a new anti-slavery act – The Modern Slavery Act.
The Modern Slavery Act came into force in October 2015 to combat modern slavery and human trafficking in the UK. It is a world-leading piece of legislation setting out a range of measures on how modern slavery and human trafficking is dealt with in the UK. Whilst not all of the Act is directly relevant for businesses, section 54 requires that larger businesses strive for transparency in their supply chains.
At the moment only organisations (including public and private companies, partnerships and charities, wherever they are incorporated and whatever the sectors within which they operate) with a turnover of over £36 million and which carry on a business or part of a business in the UK must comply with section 54 of the Act by publishing (in a prominent place on their websites) a slavery and human trafficking statement for each financial year. The statement must disclose the steps the business has taken during the financial year to ensure that slavery and human trafficking is not taking place in its operations and/or supply chain or that the business has taken no such steps. Given the reputational damage which is likely to be caused by a statement which says that no steps have been taken to ensure slavery is not taking place, it is not expected that any businesses will choose the second option.
In terms of the time line, any businesses with a financial year which ended on or after 31 March 2016 has to publish a “slavery and human trafficking statement” as soon as reasonably practicable after the end of the financial year (with the generally accepted window being the 6 month period from the financial year end).
While the vast majority of businesses in the UK will not have to comply with the statement requirement (because their turnover is less than £36 million), the requirement is nonetheless likely to have an impact on smaller businesses which supply goods or services to businesses which do have to comply. Business which do have to comply are obliged to publish a statement which covers the following main areas:
- the business’ structure, summary of operations and its supply chains;
- any policies relevant to slavery and human trafficking;
- any due diligence processes implemented in relation to slavery and trafficking in the business and its supply chains;
- identifying any part of the business where there is a risk of slavery and trafficking and the steps taken to assess and manage that risk;
- the effectiveness of the business’ steps in ensuring that slavery and trafficking is not taking place in its supply chains measured against appropriate KPIs; and
- the training of staff and the staff of suppliers in relation to slavery and trafficking.
Therefore, whilst smaller businesses do not have to comply with section 54, they are likely to be approached by clients to whom the Act is applicable and asked to give certain anti-slavery undertakings. And this is becoming more and more relevant as more or more large businesses reach their financial year ends and start putting together their statements for publishing. Indeed, several of MBM’s (small business) clients in the last few weeks have been asked by their larger clients to confirm that they understand the principles of The Modern Slavery Act and that they are taking steps to ensure slavery does not exist in their own supply chains, in order that the clients can satisfy themselves that they are complying with section 54. Whilst smaller businesses won’t be acting unlawfully by not responding to such requests or by paying lip-service to them, this is unlikely to go down well with large business clients, which creates a commercial risk, and ignores the indication from the Home Office that, in time, the turnover threshold will be reduced meaning that the Act will be applicable to more and more businesses as time goes on.
So, if you’re a supplier to a business which has to comply with The Modern Slavery Act, what should you do? Unfortunately, whilst there is guidance for larger businesses who have to comply with the Act (click here for Home Office Guidance), there is much less for suppliers of those businesses. However, the Chartered Institute of Purchasing and Supply has released some guidance for suppliers as follows:
- Ensure all UK workers receive minimum wage and robust immigration checks;
• Map supply chains to identify where there is highest risk and exposure to modern slavery;
• Undertake site inspections;
• Provide training to employees and local suppliers on modern slavery risks and compliance;
• Review supplier contracts to include obligations to comply with the Modern Slavery Act 2015;
• Publish a statement outlining the steps you are taking to tackle modern slavery.
Whilst such steps seem onerous for small businesses, especially when the regulatory environment already feels bureaucratic, most businesses will be able to implement a couple of simple measures to begin to combat the risk of slavery in their supply chains, which will, in turn, make it easier for your bigger business clients to comply with the Act. In addition, you’ll be contributing to eventual elimination of modern slavery and human trafficking world-wide.
If you have been asked by larger clients to give undertakings in relation to the Act or have any questions about The Modern Slavery Act or any other aspect of HR, please do get in touch with me by clicking the link below.
*Quote attributable to William Wilberforce