The Modern Slavery Act 2015 – Impact on Businesse

The Modern Slavery Act 2015 (the “MSA”), which came into force last year, imposes obligations on certain businesses to produce Slavery and Human Trafficking statements, which are intended to explore and provide clear, transparent information concerning any potential slavery and human trafficking aspects of their supply chains.

The MSA 2015 obliges businesses to be transparent with regard to any potential slavery and human trafficking aspects of their supply chains. Importantly, various businesses with financial years ending on or after 31 March 2016 must produce an annual Slavery and Human Trafficking statement. This Briefing Note provides an overview of the requirements in this area. For additional information or advice, please contact Mark Openshaw-Blower.

The requirement applies to organisations having an annual turnover of £36 million, wherever incorporated, and which carry on a business or part of a business in the UK, supplying goods or services.  These organisations must publish their first statement (in respect of their 2015 - 2016 financial year) as soon as reasonably practicable.

Where the financial year end of a business was 31 December 2015, it must produce its first statement in relation to the financial year from 1 January 2016 to 31 December 2016.

The MSA provides guidance on the sort of information that may be included within the statement. Alongside this suggested information, businesses should also consider how a detailed, informed and transparent statement would encourage trust in their brands and the overall loyalty of customers.

Guidance under the MSA

Generally, the MSA requires the statement to set out what steps the business has taken (during the relevant financial year) to ensure that modern slavery is not occurring in its supply chains and within the company as an organisation (as a whole).

The MSA suggests that information which may be incorporated within the statement includes:

  • The company’s structure, its business and its supply chains;
  • its policies in relation to slavery and human trafficking;
  • its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
  • the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place and the steps which the company has taken to assess and manage such risk;
  • its effectiveness in ensuring that slavery and human trafficking is not taking place in its business and supply chains, measured against such performance indicators as it considers appropriate;
  • the training about slavery and human trafficking available to staff.

Whilst businesses are not required to guarantee that the entire supply chain is slavery-free, they must demonstrate the steps they’ve taken in relation to any part of the supply chain.

In other words, businesses should set out all actions taken in this regard and we would suggest that the more detail provided the better.