This week the government published guidelines for how UK businesses with a total annual turnover of £36m or more will be required to produce an annual slavery and human trafficking statement, or face the possibility of an unlimited fine.
Under the Modern Slavery Act 2015, larger organisations, regardless of their business type must set out the steps they have taken to ensure there is no modern slavery in their own business and their supply chains. The intention being that organisations are more transparent about how they are addressing slavery and human trafficking and those that are not taking action will need to declare this to their stakeholders.
The core aim is to reduce human rights violations, regardless of where they occur and large organisations must show that they aren’t turning a blind eye to what happens a lot further down the supply chain. As a result activities by suppliers in other countries should be considered and the business should look at what they are doing to minimise the risk of slavery resulting from requirements they stipulate.
Within 6 months of the organisation’s financial year end, a clear, succinct statement must be placed on their website with a link to it placed in a prominent position on the homepage. The statement must be approved and signed by an appropriate senior person in the business (director or equivalent).
Some companies may already be disclosing some information about protecting human rights (for example, via a strategic statement as required under Chapter 4A of the Companies Act 2006). Therefore, it is not necessary for an organisation to start from scratch and existing policies or strategies can be signposted. Whilst the exact structure and content required in a statement has been left quite flexible by the government, there are certain declarations that will help ensure that it meets the requirements of the Act. These include policies in place, identification of where risks of slavery and human trafficking may exist, measures in place to reduce the risk and how staff are engaged in the process.
We believe that the Act is a good starting point in helping to prevent human rights violations, and encourages greater transparency in what companies are doing to tackle the issue. It does, of course, need to be accompanied by solid action by all businesses with complex supply chains to ensure that long term improvements are made. Focusing on the issue can also bring about business benefits, including protecting and enhancing an organisation’s reputation with investors and consumers as well as developing more responsive, stable and innovative supply chains.
For more information about the requirements of the Act and how to comply, please contact Chris Burgess.
Infographic courtesy of bighospitality.co.uk