Modern slavery and supply chains – is your business legally compliant?
In a bid to combat slavery and human trafficking, the Modern Slavery Act (“MSA”) introduced in March 2015, requires large organisations to publish an annual slavery and human trafficking statement. Known as section 54 of the MSA, this is a declaration that a business is taking steps to ensure that modern slavery and human trafficking is not occurring in its core business or supply chains. These statements are given by a senior individual and must be displayed in a prominent position on a commercial organisation’s website.
Over two-years since the MSA’s introduction the Home Office has now published supplementary guidance, which can be found here.
The section 54 statement encourages commercial organisations to be transparent in what steps they are taking to tackle modern slavery and human trafficking, or where the case may be, they are not. Home Office guidance states that a section 54 statement should aim to include information about the commercial organisation’s corporate structure together with full detail of any supply chains, all policies in respect of anti-slavery and human trafficking, and full detail and regularity of such employee training.
Interestingly, direct application of the legislation affects only companies or partnerships that operate within the UK (either as a whole or in part) with a global annual turnover of more than £36m derived from the supply of goods or services.
Notwithstanding this, small-to-medium enterprises (“SMEs”) are now under increasing pressure to publish their own statements in order to assuage larger commercial organisations covered by the regime. This can often be the case where an SME forms a part of a larger commercial organisation’s supply chain and in the absence of a section 54 statement (or a similar statement) by the SME, the larger commercial organisation may refuse to contract with an SME. The updated Home Office guidance has suggested that smaller organisations may benefit from voluntarily producing a statement for this very reason.
It is also becoming more common for larger organisations to include provisions dealing with the MSA in relevant commercial agreements. This could be by mandating compliance with applicable law (including the MSA) as a performance obligation or by contractually requiring a SME to comply with the larger organisation’s anti-slavery and human trafficking policy. SMEs taking proactive steps to publish a voluntary MSA statement are better placed to deal with these contractual issues. A voluntary MSA statement can also help differentiate a SME from other providers and may be taken into account in supplier ranking and formal tendering exercises.
For assistance with your company’s section 54 statement, or a review of your commercial contract please feel free to contact Teri Hunter on t: 01628 470 004 or e: firstname.lastname@example.org.