With the United Kingdom Modern Slavery Act 2015 now in effect, businesses operating in the UK must determine what requirements they need to meet in order to comply with this new slavery and human trafficking law.
The UK’s Home Secretary, the Rt Honourable Theresa May, calls the UK Modern Slavery Act a “truly groundbreaking measure” that recognizes the role business can play in eliminating slavery and human trafficking. She says by requiring businesses to disclose how they are working to eliminate these elements from their supply chains, it creates a strong incentive for businesses to take the issue seriously.
Below we have compiled a list of five things every compliance specialist should know about the Act, from when it came into effect to how it will impact your business. More information is available on our website, and our regulatory experts are available to answer any additional questions.
1) The law is now in force
The UK Modern Slavery Act 2015 is now in effect. However, guidance is expected soon which will clarify when businesses are required to begin their reporting. According to a government document, “transitional provisions will be developed so that statements are not required where a business’s financial year end is within close proximity to the date that the duty [came] into force.”
These provisions will be designed to give businesses time to determine whether or not they are in scope of the Act, and to develop their programs accordingly.
2) Businesses over the £36 million turnover threshold are in scope
After an in-depth consultation process, the Act’s turnover threshold was set at £36 million. Companies that meet this annual threshold may be subject to the new regulations. However, they must also:
- be incorporated or a partnership
- supply goods and/or services
- carry on a business, or part of a business, in the UK
The threshold applies to global turnover, not just turnover in the UK. A U.S.-based company that meets the turnover threshold based on global operations could be covered, even if it conducts only a small amount of business in the UK. The Act is broader than its California counterpart, the Transparency in Supply Chains Act of 2010, which took effect in 2012. The Transparency in Supply Chains Act applies only to retail and manufacturing companies, while the UK Act applies to businesses that supply either goods or services.
3) Companies must declare their anti-human slavery activities
The Act requires companies to produce a “slavery and human trafficking statement” each financial year, disclosing their efforts to ensure their supply chains are free from slavery and human trafficking. The statute suggests the statement include information about:
- The organization’s structure, its business and its supply chains
- Its policies in relation to slavery and human trafficking
- Its due diligence processes regarding slavery and human trafficking in its business and supply chains
- The parts of its business and supply chains vulnerable to slavery and human trafficking, and the steps it has taken to assess and manage that vulnerability
- Its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate
- Slavery and human trafficking training available to its staff
4) Companies must publish their statements on their website
If a covered company has a website, it must publish its slavery and human trafficking statement on that website and host a link to the statement in a prominent location on its homepage.
If the company does not have a website, it must submit a written statement within 30 days to anyone who makes a request.
5) These duties are enforceable by the Secretary of State
According to the Act, failing to comply with these duties could bring civil proceedings in the High Court for an injunction against the company or, in Scotland, for specific performance of a statutory duty under section 45 of the Court of Sessions Act 1988.