Modern Slavery Act: compliance for businesses operating in the UK

Written by Jake Plenderleith on Thursday February 2, 2017

Here in the UK, slavery is a risk that companies and organisations must take into consideration to avoid non-compliance with UK law. The UK’s Modern Slavery Act (2015), described as ‘global-leading legislation’ by PwC, directly confronts this emotive issue, and contains requirements for companies to prevent and eliminate slavery in supply chains.

UK Modern Slavery Act

The Act applies to businesses that have an annual turnover of £36 million or more, and conduct business - or part of a business - in the UK.  

Companies meeting this criteria must adhere to the conditions set out in the Act, with the most important being the publication of an annual slavery and human trafficking statement, demonstrating transparent steps taken to eliminate slavery in supply chains. No industry sector is exempt from this.  

Guidance published alongside the Act explains that statements should ideally be published at the financial year-end, but have 6 months following this date to do so. 

The statement should be succinct, contain links to relevant documents, demonstrate steps taken to minimise risk and, if applicable, have a breakdown of actions taken on a country-by-country basis.

The essential elements of a statement should include the structure of the business and its supply chains, the company’s policies and due diligence procedures, along with a risk assessment, KPIs and training undertaken. Finally, a link to the statement should be available in a prominent place on a company’s website.

There is a legal obligation that the statement is signed by a director, or an equivalent figure depending on the size and type of business.

Guidance to the Act stated that compliance with the Act does not mean that a business must guarantee that no slavery is taking place in their supply chain; businesses do, however, have to demonstrate the transparent steps they have taken to ensure supply chains are free of slavery.

Non-compliance could in theory lead to a business being taken to the High Court, but the UK government is hoping that stakeholder pressure will mean this won’t be necessary.   

Global Effort

This legislation is part of a wider push to eradicate slavery in supply chains. The International Labour Organization (ILO), for instance, is using technology to help businesses perform their compliance function, after developing an app for business managers that contains a checklist to help prevent child labour in supply chains.

In 2015, 289 offences were prosecuted under the Modern Slavery Act, and just last month two individuals were convicted in the UK after recruiting vulnerable people in Poland to work in a UK warehouse that supplied Sports Direct.

The UK government is evidently serious about prosecuting offenders under this Act. It’s up to businesses operating wholly or partly in the UK to ensure they’re compliant.