The requirement for organisations to publish a slavery and human trafficking statement came into force on 29 October 2015. In October 2018, the Home Office announced that it was writing to the chief executives of 17,000 organisations to warn them that if they failed to comply with the law and publish a slavery and human trafficking statement they faced being named and shamed by the Home Office. The deadline given to organisations to comply of 31 March 2019 is fast approaching and so it is important to make sure that if you are required to publish a statement you do so now. Organisations which are named on the list may face commercial and reputational damage. In addition, the government can seek an injunction requiring a statement to be published. Failure to comply with the injunction can then result in an unlimited fine. Even if you have not received a letter, if your organisation meets the criteria for publishing a statement then you are required to do so.
As part of its ongoing review into the Modern Slavery Act, the government has recently commissioned a second interim report which includes a review of how effective the Act has been and what can be done to ensure that organisations comply with their anti-slavery obligations.
Section 54 of the Modern Slavery Act requires commercial organisations to publish a slavery and human trafficking statement for each and every financial year detailing the steps they have taken to ensure that there is no modern slavery in their own business and supply chains. This applies to all commercial organisations that:
• carry on a business, or part of a business, in the UK;
• supply goods or services; and
• have an annual turnover of at least £36m.
For the purposes of calculating turnover, the turnover of head offices and group companies must be included even where those entities are based outside the UK where, on a common-sense evaluation, the head office is using the local office to carry on business in the UK.
The Home Office estimated in October 2017 that only 60% of companies that were required to prepare a statement had done so and that many statements did not meet the basic legal requirements for section 54 statements.
The second interim report calls for a stricter approach to be taken by the government. This includes a recommendation that there should be greater powers to enforce section 54 including fines, the disqualification of directors, court summons and prohibiting infringing organisations from taking part in public procurement processes. Although it is not yet clear how and indeed if the government will follow the advice in the report, it seems clear that the government are likely to take a tougher approach to enforcement.
Whilst organisations with a turnover below £36m are not required to prepare and publish a statement, current government guidance encourages such organisations to do so. There are clear commercial benefits to preparing a report. Larger customers or clients may require that all parties they deal with comply with their codes of conduct and this may include producing a statement or providing detailed information relating to modern slavery. Basically, if you are part of the supply chain of a company that does need to produce a statement, then you need to be able to show that your business is free from modern slavery.
If you would like further advice in relation to this issue or further information about our compliance services please contact the Regulatory & Compliance team at 3CS.