October 06, 2021
Article
The Modern Slavery (Amendments) Bill June 2021 sets out changes to the MODERN SLAVERY ACT 2015 which first came in to force in October 2015. The Act requires any business in the UK with a turnover of £36million or above to prepare a slavery and human trafficking statement for each financial year commencing with periods ending from 31 March 2016 onwards. A go live date for the amendments is yet to be set but in the meantime the summary below can help you to get prepared.
To whom does the Act apply?
The act, as it stands, applies to bodies corporate, partnerships and group companies that carry on business in the UK, supply goods and services and have an annual turnover (being turnover from goods and services less trade discounts, VAT and other taxes based on turnover) of £36million or more. It is recommended that once a business has produced a statement for one year that it should continue to be maintained and updated in future years even when turnover falls below the £36million limit.
In the future the scope of the Act will be widened to bring in public sector bodies with a budget in excess of £36million.
What should the current statement include?
The legislation does not state the exact content of the transparency statement. Instead, it states that the statement must set out the steps that the business has taken in order to ensure that modern slavery is not present within its own organisation, or its supply chains. The statement should include relevant publications, documents and policies setting out how slavery and human trafficking is prevented.
If the organisation has not taken any steps, then this too must be set out. Although be mindful that the new regulations do include an offence for using a supplier who fails to show minimum standards of transparency. An organisation could find themselves in this position if they are not taking any action to review their supply chain.
How should I structure my organisation’s statement?
The following headings can be used as a template structure for the current Transparency Statement:
- Structure and supply chains
- Policies on slavery and human trafficking
- Due diligence process for slavery and human trafficking in own business
- Due diligence process for slavery and human trafficking in supply chains
- Risk assessment of business and supply chain and management plan
- Basis for measuring effectiveness of ensuring prevention of slavery and human trafficking
- Training for staff in relation to slavery and human trafficking
What additional content or requirements does the amendment bill bring?
The amended bill keeps in scope the headings above but escalates them from being recommended to compulsory content. New areas to report on are:
- The country of origin of items in the supply chain; and
- The use of employment agents acting on behalf of overseas governments.
The new regulations also require an organisation to ensure that credible external inspections, external audits and random spot checks against policies are put in place.
Where is the statement to be published?
To date the slavery and human trafficking statement is to be published on the organisation’s website with a prominent link being available on the homepage. Going forwards the statement will be filed with the Home Office on a central register. Home Office filing can take place now, as part of optional best practice, but would still require the information to be on the website. The link for early adoption filing is here.
When should the statement be produced?
Currently the statement is to be produced annually, covering a full financial year, for each reporting period ending on or after 31 March 2016 with publication being as soon as is practicably possible, which is deemed to be within 6 months of the end of the reporting period.
Once the new act is launched the reporting period will remain however there will be a single reporting date of 30 September.
What are the consequences of non-compliance?
At the moment should a business fail to comply with the statutory provisions of the act the Secretary of State may seek an injunction through the High Court which will require the organisation to comply. If the business does not become compliant this will then result in an unlimited fine.
The new act brings additional strength with the possibility of not only a fine of up to 4% of annual global turnover (capped at £20m) but also/instead, a prison sentence of up to 2 years.
What action should I take now?
It would be advisable to start the review process for all areas within the structure and content sections above as well as starting to consider the options available for inspection and audit of the policies and procedures in place. An audit ahead of the mandated requirement could be considered as a way of ensuring readiness once the regulations come in to play.
Contributing to your success
If you would like to discuss your Modern Slavery Act reporting requirements in more detail please get in touch with Sophie Parkhouse direct or your usual Albert Goodman contact.