The Modern Slavery Act recognises that business can have a role to play in combating crimes of slavery and human trafficking. Section 54 requires organisations with a global turnover of over £36 million to publish an annual slavery and human trafficking statement for each financial year on or after the 31st March 2016. That statement has to set out the steps that the organisation is taking to ensure human trafficking is not taking place in any of its supply chain or within its business in an aim to promote transparency.
Interestingly there is no penalty as in a fine for failure to prepare a statement but the Secretary of State has the power to bring an injunction requiring an organisation to comply with the disclosure requirement a subsequent failure then to comply would risk being in contempt of Court which would be punishable by an unlimited fine.
In addition an organisation that fails to comply or even reports that it’s not taking any steps to ensure slavery is taking place may suffer damage to their reputation and brand. There is now a independent Anti-Slavery Commission in the UK who may well highlight those organisations who do not comply.
Now you may be reading feeling a sense of relief that your organisation falls well below the £36 million global turnover threshold. However if you are part of the supply chain to an organisation that is likely to have to make a statement you may find yourself under scrutiny as part of the due diligence process that such large organisation is likely to implement into its business and supply chains. You may therefore find yourself being asked questions and asked to report on the steps that you are taking to ensure that you are able to provide assurance to the large organisations that you work with that there is no problem as regards your business. Thus although lots of organisations will fall below the threshold set within legislation, they will find themselves affected by a cascading effect from the legislation.
So what do we need to do? The first thing to do would be to conduct a risk assessment mapping your supply chain to identify potential touch points for modern slavery. Where within your supply chain will you need to audit? What do your procurement policies say on such matters? Do you need to include something in them or in the contract you use with your suppliers? You may want to adopt a code of conduct or a policy to address how you’ll minimise the risk of slavery and human trafficking occurring within your supply chains. You may also want to review your whistle-blowing policies to ensure they accommodate reporting of such issues as well as providing training to those who work within procurement or the supply chain and that they are aware of this legislation and how it may impact on their daily work.
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