The Modern Slavery Act – Is your organisation affected?
Operations recently conducted by the National Crime Agency have revealed that modern slavery and human trafficking is far more prevalent than was previously thought. As a result, the importance of the Modern Slavery Act (the “MSA”), which came into force on 26 March 2015, has been thrown back into the spotlight by the media. As a consequence, we touch on why the MSA is very relevant to the corporate sector.
What does the legislation say?
The MSA consolidated and simplified existing slavery and human trafficking offences into a single Act, providing the tools to fight modern slavery, ensuring perpetrators can receive suitably severe punishments and enhancing support and protection for victims. Although most of the provisions do not apply directly to bodies corporate, businesses over a certain size are required to disclose each year what action they have taken to ensure there is no slavery in their business or supply chains.
Is your organisation affected?
Your organisation – regardless of its nature – will be caught by the legislation if:
- it has a global turnover (calculated based on the commonly used definition from the Companies Act for businesses to determine their size) above £36 million; and
- it carries on a business, or part of a business, in any part of the United Kingdom.
Does your organisation need to take any action?
If your organisation is caught by the legislation, for each financial year that ends on or after 31 March 2016, it must have published on its website an annual slavery and human trafficking statement as soon as reasonably possible (and within six months is recommended) after the end of each financial year for which it is producing the statement.
The statement must:
- disclose what steps your organisation has taken to ensure that human trafficking is not taking place in any of its supply chains or its business; or
- state that your organisation has taken no such steps (which, for obvious reasons, including possible irreparable damage to your organisation’s reputation, would not be recommended).
The MSA describes six areas which your organisation should consider including in its statement:
- its structure, operations and supply chains;
- any policies in place relating to slavery and human trafficking;
- any due diligence processes in operation relating to slavery and human trafficking;
- any high-risk areas for its business and steps taken to assess and manage the risk;
- the effectiveness of any steps taken to prevent slavery and human trafficking; and
- details of any training provided by the business.
The statement should be approved by your organisation, which entails approval:
- by the board of directors for bodies corporate other than limited liability partnerships;
- by the members for limited liability partnerships;
- by a general partner for limited partnerships; or
- by a partner for any other partnerships.
In addition, your organisation should consider whether to include wording in its commercial agreements that have a connection with a supply chain, which prohibit the use of forced or trafficked labour. This wording could take the form of a specific clause dealing with anti-slavery and human trafficking or a more general clause dealing with compliance with laws and regulations.