The Home Office has updated its Transparency in Supply Chains guidance (the "Guidance") that assists businesses in complying with the Modern Slavery Act 2015 ("the 2015 Act") requirement to publish an annual Slavery and Human Trafficking Statement.
One of the key changes to the Guidance is a tightening up of the language so that, while an organisation should still publish its statement "as soon as possible" after its financial year end, this should now be "at most" within six months of the financial year end.
Similarly, while the 2015 Act suggests information which "may" be included in a statement, the updated Guidance now provides that organisations "should aim" to include the various categories of information set out in the legislation and the Guidance.
Voluntary compliance
The 2015 Act places a "transparency" responsibility on certain businesses to issue a public statement every year showing what steps it took to ensure that slavery and human trafficking is not taking place in any part of its business or in its supply chains. If no such steps were taken then the organisation must make that clear in its statement.
Organisations will be caught by the obligation to publish a statement if they (1) supply goods and services in any sector; (2) carry out any part of their business in the UK (regardless of place of incorporation) and (3) have an annual group turnover of at least £corporate36million.
Voluntary publication by organisations that do not meet these criteria is encouraged, in the interests of being open and transparent. Voluntary compliance is also expected of organisations that previously published a statement but fall short of the turnover threshold for a particular financial year.
Demonstrating progress
The duty to publish a statement is a continuing one: it requires publication of the steps taken in each financial year.
The updated Guidance specifically recommends that organisations should look to keep historic statements from previous years available online even when a new one is published, to allow the public to compare statements between years and monitor the progress of the organisation over time.
A study from earlier this year showed that "superficial and broad descriptions of processes remain the norm" for the bulk of statements being published. Comparing statements year to year is likely – and intended – to militate against that.
On the horizon
The National Crime Agency recently voiced its concerns about the numbers of victims of slavery, servitude, forced labour and human trafficking in the UK being much higher than estimated. Against this background, sweeping changes to the 2015 Act have been proposed in the Modern Slavery (Transparency in Supply Chains) Bill (the "Bill") currently working its way through the UK Parliament. The Bill, if enacted in its current form, would strengthen enforcement mechanisms.
The 2015 Act would be amended to require any organisation stating that it has taken no steps to combat modern slavery in its business and supply chains to explain why it has not done so, require the Government to publish a list of all organisations that need to publish a statement under the 2015 Act and compel public authorities to exclude from procurement processes those operators who have not published a statement when they ought to have done.
Compliance checklist
The Guidance and the Bill demonstrate the increasing onus on responsible businesses to take steps to ensure there is no modern slavery in their supply chains.
Organisations, whether public or private sector, that do not meet the £36million turnover threshold should nonetheless consider preparing and producing a statement voluntarily, especially given the updated Guidance and the Government's intention that the turnover threshold be reduced in future to bring more entities into scope.
Statements should be published within six months of financial year end and should be checked to ensure compliance with the 2015 Act's requirements on content, visibility and approval. For organisations that have published a statement for a past financial year, this should be revisited and updated meaningfully. The Government's expectations in the Guidance are clear: "We expect organisations to build on their statements year on year and for the statements to evolve and improve over time." Credibility and accuracy, rather than vague commitments and intentions, look set to be the new benchmarks.
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