At the end of March 2015, the Modern Slavery Act, a piece of landmark legislation, came onto the statute. The main thrust of the Act focuses on illegal activity in the UK; however, the legislation also looks at the potential for slavery down the supply chain outside of the UK. The Act has direct implications for businesses operating in any sector in the UK.
A key element of the Act is the ‘Transparency in Supply Chains’ provision. Businesses above a certain threshold are required to produce a ‘Slavery and Human Trafficking Statement,’ outlining what steps they have taken in their supply chain and own business to ensure slavery and human trafficking is not taking place.
Who does the Act apply to?
a) A body corporate (wherever incorporated) which carries on a business, or part of a business, in any part of the United Kingdom, or
b) A partnership (wherever formed) which carries on a business, or part of a business in any part of the United Kingdom.
The Government’s Consultation
Following the passing of the Act, the UK Government entered a period of consultation with industry and interested parties which ended on 7 May 2015. The consultation process sought views on the turnover threshold that would determine whether or not a company has to report, as well as what guidance is required to help businesses understand what a slavery and human trafficking statement might include.
A summary of the consultation was published by the Home Office on 29 July 2015. The document summarises key findings from the responses to the consultation and more specifically provides details of:
- the threshold for reporting on the ‘Transparency in Supply Chains’ clause
- initial views on the content of the statutory guidance that the Government are compiling which is due for publication late 2015
Threshold for reporting
Following the consultation, the turnover threshold for reporting has been set at £36 million. Companies above this threshold will be obliged to report as detailed in the ‘Modern Slavery and Supply Chains – Government Response’: “all commercial organisations carrying on business in the UK with a total turnover of £36m or more will be required to complete a slavery and trafficking statement for each financial year of the organisation.”
The aim of this measure is to encourage businesses to do the right thing and to drive transparency as companies’ statements are published, scrutinised and compared.