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.
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.
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.
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:
- supply chain management; and
- 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:
- comply with the Modern Slavery Act
- 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.
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.