U.K. Supply Chain Slavery Act Enters into Force

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By MarEx 2016-04-02 16:30:33

Section 54 of the Modern Slavery Act 2015 has come into force in English Law. The U.K. government has issued a practical guide on the section saying the measure is designed to create a level playing field between those businesses, whose turnover is over a certain threshold, which act responsibly and those that need to change their policies and practices.

Many organizations are already taking action to promote ethical business practices and policies that protect workers from being abused and exploited in their own organization and global supply chains. However, there are still far too many people in the world being treated as commodities, states the guidance. There are also far too many organizations ignoring such abuses or who are knowingly responsible for policies and practices that result in workers being subjected to modern slavery in their operations.

Modern slavery (slavery, servitude, forced and compulsory labor and human trafficking) is on the rise in the U.K. The Human Trafficking Foundation charity believes there are up to 20,000 slaves in the U.K.

A focus on tackling modern slavery protects vulnerable workers and can bring business benefits including:

•    protecting and enhancing an organization’s reputation and brand;
•    protecting and growing the organization’s customer base as more consumers seek out businesses with higher ethical standards;
•    improved investor confidence;
•    greater staff retention and loyalty based on values and respect; and
•    developing more responsive, stable and innovative supply chains.

The provision in the Act requires that any commercial organization in any sector, which supplies goods or services, and carries on a business or part of a business in the U.K., and which has a turnover of £36 million or more must produce a slavery and human trafficking statement for each financial year of the organization. 

The statement must set out what steps they have taken during the financial year to ensure that modern slavery is not occurring in their supply chains and in their own organization. 

If a business fails to produce a slavery and human trafficking statement for a particular financial year the Secretary of State may seek an injunction through the High Court requiring the organization to comply. To then be found in contempt of a court order is punishable by an unlimited fine.

The statement must be published prominently on the company’s website, or be available within 30 days of a written request for it to be produced. The statement must be signed by a director, and the Government expects employers to have drafted something within around five months of the new financial year.

Maritime charity Human Rights at Sea, as a signatory to the U.N. Global Compact and supporter of all efforts to eradicate modern slavery, reports that Kevin Hyland OBE, the U.K. independent anti-slavery commissioner, has written a letter addressed to all U.K.-based signatories of the U.N. Global Compact.

Letter Text

Last year the Modern Slavery Act 2015, which introduced my role as the U.K.’s first Independent Anti-Slavery Commissioner (IASC), received Royal Assent.

The act includes a number of wide reaching provisions bolstering the law enforcement response to human trafficking and modern slavery and strengthening victim support structures.

Today, on Friday 1st April, Section 54 of the Modern Slavery Act 2015 comes into force, requiring businesses with a turnover of £36 million to publish annual statements indicating what their company is doing to ensure their supply chains are slavery free. Transparency is absolutely essential in tackling modern slavery crime.

The global and instant communication that has been brought about by our globalised world has enabled a culture of transparency and created an environment for stronger accountability. Section 54 is not directly punitive but it requires companies to take responsibility over the entirety of their supply chains, to demonstrate their commitment to finding out whether forced labour is present in their business activity and, that they are doing everything within their power to ensure that it does not occur.

As Commissioner, I expect all businesses to produce modern slavery reports that are accurate, transparent and demonstrate a proactive approach to ensuring that slavery does not exist in their supply chain, and if it has been identified what remedies have been put in place. The purpose of this measure is to drive up standards in labour markets and supply chains both in the UK and internationally.

Ending modern slavery is now also part of the Sustainable Development Goals (SDGs); the set of global goals signed by all UN member states in September 2015 that will guide development policy worldwide for the next 15 years. Goal 8.7 calls for the “end of modern slavery and human trafficking”. Unlike their predecessor, the Millennium Development
Goals which were focused on government policy and the aid world, the Global Goals explicitly call on all businesses to apply their creativity and innovation to solving sustainable development challenges.

I therefore want to take this opportunity to encourage you and your business to take ownership of goal 8.7 which calls for the end of modern slavery and see the SDGs as a catalyst for innovation and new market opportunities.

The bargaining power of companies at the top of the supply chain is enormous as the behaviour of buying companies has the ability to dictate business standards throughout the chain. I believe that having the leadership and commitment of Chief Executive Officers and their Boards can be a real lever for change in the private sector and beyond.

It is for this reason that engaging with the Private Sector is one of my five priorities as laid out in the Strategic Plan 2015 - 2017 accessible here. I look forward to reading your statements and working with you in my bid to eradicate the scourge of modern slavery from the UK and beyond.