The Modern Slavery Act 2015 has now been in force for over 18 months. The Act means large organisations must pay closer attention to the practices of their suppliers. This includes carrying out audits of their suppliers, investigating the physical conditions of the workforce and being on the look out for instances of child labour. Further, the Act dictates that organisations with a turnover of over £36 million are required to produce a slavery and human trafficking statement.
What is modern slavery statement?
A modern slavery statement is a formal document issued by organisations to outline their commitment to combating modern slavery and human trafficking within their operations and supply chains. These statements are typically published annually and serve as a transparency measure, allowing businesses to communicate their efforts in addressing modern slavery risks and ensuring ethical practices.
The importance of publishing a modern slavery statement
By publishing a modern slavery statement, organisations demonstrate their dedication to combating modern slavery, promoting transparency, and ensuring that their operations align with ethical and human rights principles. This helps establish a balance in risk mitigation as well as ethical brand reputation, increasing investor confidence.Consequences of modern slavery law breaches: Huge fines and potentially prison</h3>
A number of large companies have recently been exposed for having modern slavery in their supply chain. For example, major phone companies Samsung and Apple have faced claims by human rights organisation Amnesty of modern slavery. The claims relate mainly to cobalt mining in the Democratic Republic of the Congo, which is used in devices such as mobile phones and tablets.
Chicken catching company DJ Houghton’s supplied eggs that were sold by leading retailers such as McDonald’s, Tesco and ASDA. They were found guilty of trafficking 6 Lithuanians and exploiting them as slaves. The farms they worked in also produced eggs for Noble Foods, the largest UK egg company. These examples show the importance of carrying out regular audits of supply chains and producing an up-to-date modern slavery and human trafficking statement.
Protect your organisation’s reputation with a Modern Slavery Statement
With consumers becoming more aware of the threat of modern slavery, failing to identify and mitigate a risk in your supply chain can seriously affect the reputation of your organisation. Over the last few years, many reputable companies have suffered from a loss of sales and a tarnished reputation as a result of being exposed for having modern slaves in their supply chains.
Primark – this low-cost fashion brand has faced a number of accusations over the years that they have exploited staff in order to keep selling clothes at extremely low prices. This included “help notes” being found by customers on labels of clothes with messages such as “forced to work exhausting hours”. Over the past few months, Primark has publicly spoken of its pro-activeness in auditing its suppliers and ensuring staff are not being exploited.
Sports Direct – in January 2017 two brothers were sentenced to six years in prison for modern slavery. They trafficked 18 people from Poland to recruit them to work in a Sports Direct warehouse in the UK.
Who needs a Modern Slavery Act statement
The requirement for a Modern Slavery Act statement varies depending on the jurisdiction.
United Kingdom: The UK Modern Slavery Act 2015 requires commercial organisations that carry out business in the UK and have a total annual turnover of £36 million or more to publish a slavery and human trafficking statement. This includes organisations incorporated or partnerships formed under UK law and foreign entities conducting business in the UK.
Australia: The Australian Commonwealth Modern Slavery Act 2018 applies to entities with a consolidated revenue of AUD $100 million or more. These entities are required to prepare an annual Modern Slavery Statement that addresses the risks of modern slavery in their operations and supply chains.
California, USA: The California Transparency in Supply Chains Act (TSCA) requires retail sellers and manufacturers doing business in California with annual worldwide gross receipts exceeding $100 million to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains.
All organisations with a turnover of over £36m must produce a Modern Slavery Statement
If your organisation has an annual turnover of over £36m, you are required to publish an annual Modern Slavery and Human Trafficking Statement. Companies that do not produce a statement have a higher risk of having slaves working in their supply chains and could face charges resulting in huge fines. A thorough statement which highlights the parts of the business and supply chain where there is a higher risk of slavery will help staff realise those risks and bear them in mind when carrying out an audit.
What should be in a modern slavery statement
- Introduction
- Organisational Structure
- Policies and Commitments
- Due Diligence Processes
- Training and Awareness
- Supplier Engagement
- Performance Indicators
- Collaboration and Partnerships
- Continuous Improvement
- Signature and Date
Educate your staff and customers
Under the Modern Slavery Act, companies should make clear in their statement what training they provide to staff. Having a Modern Slavery Statement published on your company website means staff will have easy access to the measures the organisation is taking to prevent modern slavery in in supply chain. Customers will see that your organisation is taking modern slavery seriously and staff will understand the role they need to play in preventing modern slavery in the supply chain. Staff who have the undergone the appropriate training on the Modern Slavery Act will be more likely to spot modern slavery in the supply chain. Training should focus on red flags to look out for and the point of contact if any potential foul play is discovered.
Further reading and learning materials
Free Modern Slavery and Human Trafficking Statement template
