The Modern Slavery Act has now been in force for a year with the introduction of section 54 relating to transparency in supply chains nearing its anniversary too. Modern slavery remains high on the government’s agenda with the Prime Minister emphasising the issue as a global one as part of her meetings at the UN. Separately, the private members Bill referred to in our previous Law-Now continues its progress through the House of Lords.
For those commercial organisations caught by section 54 with a financial year end on or about 31 March 2016 the expectation from government is that they will have published their modern slavery statement by the end of this month (September). Whilst a failure to do so won’t put such an organisation in breach of the requirements it is inadvisable for organisations to put this matter on the backburner. Compliance will be necessary at some point and to delay raises a number of potential risks, not least damage to reputation and brands caused by an apparent lack of interest in the subject matter. Organisations also face missing out on commercial opportunities as procurement teams incorporate requirements on modern slavery and human trafficking into tendering exercises and supplier arrangements.
Organisations which have not yet met their financial year end or have a longer period to produce their modern slavery statement should not be complacent. The risks referred to above will also apply and there may be an expectation from stakeholders that statements produced by such organisations should be more comprehensive and of a better overall quality.
Section 54 is not prescriptive with regard to the information that a statement must include or as to the steps that an organisation should take to ensure that modern slavery and human trafficking is not taking place in its business or supply chains. However, it is advisable for an organisation to have a clear corporate strategy with regard to its response to section 54, which will involve consideration of its corporate values/ ethos on such issues and how this co-ordinates with any initiatives on corporate social responsibility. This should be more than a public commitment to address the issue but requires distinct active steps about labour standards.
CMS is advising a number of UK and international organisations on the requirements of section 54, including the application of section 54 to group companies, preparation of anti- slavery policies, strategies for supplier/ business due diligence and engagement, commercial contract terms and staff training. If you or your organisation would like assistance on how it impacts you and how to respond please contact any of our CMS team below.
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