Modern slavery and supply chains: steps to take now

Modern slavery and supply chains: steps to take now

Published:

Author: Ron Reid

Applies to: UK wide

The government's stated approach to transparency in the supply chain provisions is to strike a balance between improving transparency in the supply chain whilst ensuring that businesses take appropriate and proportionate action to tackle modern slavery.

Modern Slavery Act 2015: compliance checklist

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The transparency in supply chain provisions came into force on 29 October 2015.

We've compiled a checklist that summarises the steps we recommend that businesses take to comply.

The government's response provides useful definitions which are encompassed within the term 'modern slavery' for the purposes of the Modern Slavery Act 2015. These are:

  • 'slavery' is where ownership is exercised over a person
  • 'servitude' involves the obligation to provide services imposed by coercion
  • 'forced or compulsory labour' involves work or service extracted from any person under the menace of a penalty and for which the person has not offered himself voluntarily
  • 'human trafficking' concerns arranging or facilitating the travel of another with a view to exploiting them.

We have previously reported on the forthcoming provisions and their impact for business caught by the turnover threshold of £36m.

Transitional provisions

The supply chain provisions are expected to come into force in October 2015. Transitional provisions will be developed so that statements are not required for businesses caught by the legislation (i.e. those with a turnover threshold over £36m) whose financial year end falls within close proximity to the date the provisions come into force.

Guidance

The government will produce and publish statutory guidance to coincide with the provisions coming into force. Where possible, the guidance will be tailored to meet the needs of different business sectors.

The government's response states that five key areas will be included in the guidance:

  • A brief description of an organisation's business model and supply chain relationships
  • Policies relating to modern slavery, including due diligence and auditing processes implemented
  • Training available and provided to those in:
  1. supply chain management; and
  2. the rest of the organisation

The guidance will identify and signpost appropriate training opportunities which businesses might undertake to improve training and awareness of their employees and supply chains.

  • the principal risks related to slavery and human trafficking including, how the organisation evaluates and manages those risks in their organisation and their supply chain
  • relevant key performance indicators that will enable those looking at the statement to assess the effectiveness of the activities described in the statement

Reasonable and proportionate activities

The response emphasises that the government will not dictate the type of activities businesses should carry out. It is for individual businesses to decide what activities are reasonable and proportionate to carry out in order to comply with the duty. The guidance will contain good practice for businesses to consider in relation to due diligence processes.

Practical tips - act now

Businesses can take the following practical steps to prepare for implementation of the provisions:

  • look at each of the 5 key areas identified above in turn and make decisions now as to how to address them within their organisation
  • prepare a draft statement in light of the key areas which can be amended as necessary when the guidance is published. Early, considered, preparation will save rushed reactions to comply when the provisions come into force
  • appoint a person in the organisation to risk assess business supply chains. Consider categorising those within the supply chain according to risk for ongoing monitoring once the initial risk assessment has taken place
  • review and amend supply chain contracts to require suppliers to:
  1. comply with the Modern Slavery Act
  2. only sub contract to those with zero tolerance for trafficked, bonded, enforced and compulsory labour and servitude as well as requiring assurances from all those within supply chains to comply with anti-slavery legislation
  • ensure slavery and human trafficking is covered in your human rights/CSR policy
  • amend your whistleblowing policy to cover concerns about slavery or human trafficking

If you are in any doubt about what your business can do now to comply with the requirements of the Modern Slavery Act, Ron Reid and our Dispute Resolution and Compliance team are here to help.

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

About the author

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Ronald Reid

Consultant

03700 868471

Ron is a consultant with Shoosmiths having previously headed the regulatory & compliance team advising clients on non contentious matters as well as those facing investigation or prosecution for breaches of regulatory legislation. He has considerable experience of crisis management. He has over 40 years' experience including having prosecuted complex matters on behalf of the Health and Safety Executive giving him considerable insight into the enforcement process and the major causes of prosecution.

Ron also formed part The Law Society Steering Group on the Modern Slavery Act practice note and spoke alongside Kevin Hyland, OBE, at the Law Society on the 6th December 2016.

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