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Modern slavery statements – ready, steady, publish?

For each financial year ending on or after 31 March 2016, organisations with an annual turnover of at least £36 million are required, under the Modern Slavery Act 2015 (the Act), to publish a modern slavery statement. The Act does not give a strict deadline for publishing such a statement; however, the government has provided the following guidance:

“We expect organisations to publish their statements as soon as reasonably practicable after the end of each financial year in which they are producing the statement.

Organisations may well choose to publish the statement alongside any other annual or non-financial reports they are required to produce. In practice, we would encourage organisations to report within six months of the organisation’s financial year end.”

This six-month guideline means that the government envisages that organisations with financial years ending on 30 March 2016, should ideally be thinking about publishing their first statements by 30 September 2016. Whilst the government has opted for the light-touch approach by not imposing strict deadlines in the Act itself, organisations should be alert to the fact that publication of their statements should not be delayed indefinitely.

Modern slavery statements – ready, steady, publish?

Modern slavery reporting rises five-fold

Recent reports have suggested that there has been a steep rise in modern slavery reporting. This indicates that efforts to highlight the issue have been somewhat successful. The Salvation Army has confirmed that it supported 1,805 victims of modern slavery in the period between Aril 2015 and March 2016. By comparison, it had just 378 referrals in 2011.

Some may question whether these statistics are encouraging or depressing but our view is that, rather than indicating that modern slavery is on the rise, they suggest that victims are more open to reporting their circumstances. The Salvation Army’s report comes just weeks after Prime Minister Theresa May pledged to lead the way in defeating modern slavery, confirming that a UK cabinet taskforce will be introduced and £33 million of the annual aid budget will be used towards funding overseas initiatives to tackle this issue.

For employers that thought that the Modern Slavery Act 2015 (MSA 2015) was simply a tick-box exercise, please take note. The courts have already indicated that they are willing to take action against companies practising modern slavery. In June this year, the High Court found a company liable for sums running into the hundreds of thousands of pounds for breaches relating to modern slavery. This was the first time that a UK company has been found civilly liable to victims of trafficking, and the decision should act as a reminder for employers that eradicating slavery is high on the agenda for both Parliament and the UK courts.

The MSA 2015 is aimed at combating crimes of slavery and human trafficking and consolidates historic protections. The Act creates two new civil orders to prevent modern slavery; establishes the role of Anti-Slavery Commissioner; and makes provision for the protection of modern slavery victims.

Section 54 of the MSA 2015 requires organisations with a global turnover of above £36 million to publish an annual slavery and human trafficking statement for each financial year that ends on or after 31 March 2016. The statement must disclose what steps the organisation has taken to ensure that human trafficking is not taking place in any of its supply chains or its business; or state that it has taken no such steps. There are no specific sanctions for failing to take any steps in relation to modern slavery but it is hoped that the pressure of bad publicity will weigh heavily on organisations.

Whilst the annual statement  requires the publication of an annual statement, it does not prescribe the content. As a starting point however, the statement may include details of the organisation’s due diligence processes in relation to its business and supply chains; steps the organisation has taken to assess modern slavery risks in different parts of the business; and training for staff about slavery and human trafficking. We have also suggested to our clients that it may be valuable to put in place specific policies dealing with modern slavery.

Whilst most organisations are yet to publish their first modern slavery reports, the scope of the MSA 2015 may be expanded pursuant to the Modern Slavery (Transparency in Supply Chains) Bill 2016-17, a private members’ bill. If enacted, the Bill will extend section 54 to require commercial organisations and public bodies to include a statement on slavery and human trafficking in their annual report and accounts, and require contracting authorities to exclude economic operators who have not provided such a statement from their procurement processes.

Modern slavery reporting rises five-fold