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Modern Slavery Act 2015 is coming into force

Napthens - November 30th 2015

This October saw the introduction of the Modern Slavery Act 2015. The Act requires large businesses to publish a slavery and human trafficking statement each year, setting out the action they have taken to ensure their supply chains are slavery free.

Whilst the requirement to prepare a statement only kicks in for businesses with a global turnover of £36m, the effect will undoubtedly filter down to smaller businesses as organisations look into their supply chains and require that their suppliers take steps to ensure compliance.

For such larger businesses, the annual statement must include:

  • the organisation's current structure, business model and supply chain relationships;
  • the organisation’s policies relating to modern slavery;
  • the audit undertaken to assess whether modern slavery has taken or could take place within its supply chain;
  • the training provided internally and, where applicable, externally to supply chain parties;
  • the risks identified and arising from slavery and human trafficking and how the organisation manages such risks
  • year-on-year progress reports detailing how the organisation assesses its annual progress on identifying, and minimising, risk.

Just as we have seen with the Anti-Bribery Act 2010, the knock on effect is that not only will we see specific clauses included within supply chain agreements to deal with modern slavery, but organisations of all sizes will benefit from having (and following) a clear policy and procedures. These need to be appropriate and proportional to the organisations risk profile, so a business trading in areas or sectors where human trafficking is widespread will have to take greater steps than one who faces limited exposure to modern slavery.

Whilst there are no fines or penalties for failing to publish a slavery and human trafficking statement, the Secretary of State can apply for an injunction requiring an organisation to comply. Potential damage to reputation (and therefore share value) is expected to be the primary incentive for compliance.

If you need any more information, or if your business needs a statement preparing or could benefit from policies being put in place, please contact a member of our team.