It is now over a year since section 54 of the Modern Slavery Act 2015 came into force. Many large organisations have already published their annual modern slavery and human trafficking statement. Organisations that had their financial year-end falling between 29 October 2015 and 30 March 2016 were exempt from the requirement to publish a statement in relation that financial year, but these organisations now need to ensure that they have either published their statement in relation to their last financial year, or that preparations are underway to do so. Failure to comply could result in a High Court injunction and considerable reputational damage.
A reminder of who’s caught
S.54 of the Modern Slavery Act 2015 applies to any commercial organisation that:
- is a body corporate or partnership;
- is carrying on business or part of its business in the UK;
- is providing goods or services; and
- has an annual turnover of £36 million or more (based on global turnover and including the turnover of any of its subsidiaries).
Organisations should bear in mind that the s.54 obligations imposed by the Act apply on a global basis. Conducting any part of a business in the UK (no matter how small) is sufficient to bring the organisation within the remit of the Act – even if it is registered and conducts the majority of its operations overseas.
So what do you need to do?
An organisation that meets each of the criteria set out above is required to publish either a statement of the steps that it has taken during the last financial year to ensure that modern slavery and human trafficking are not taking place in its business or supply chain, or alternatively a statement expressly setting out that no such steps have been taken. Clearly, from a reputational perspective the latter approach will be unpalatable for the vast majority of relevant organisations.
The statement is likely to require considerable time and preparation, particularly for large organisations and/or those with complex or multi-tiered supply chains. Careful consideration needs be given to those areas of the business most at risk of instances of modern slavery or human trafficking. Some statements already published have received considerable public scrutiny and criticism from interested stakeholders, highlighting the need for relevant organisations to ensure their statement is both legally compliant and thorough in its approach.
If your organisation requires advice in relation to the content of its statement or its preparatory steps, such as policy formation or the extent of due diligence, please do not hesitate to contact a member of the CMS employment team.
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