UK: The UK's Modern Slavery Act And Supply Chain Transparency In The Resources Sector

Last Updated: 2 October 2015
Article by Brett Hartley

According to 2014 Global Slavery Index, there are an estimated 35.8 million men, women and children trapped in modern slavery globally with Home Office figures suggesting there are between 10,000 and 13,000 potential victims of modern slavery in the UK alone.

Modern slavery is a broad concept encompassing slavery, servitude, forced and compulsory labour and human trafficking and is prevalent in sectors such as manufacturing, agriculture, construction, shipping and transport, and mining. For multinational resource companies, forced labour and child exploitation in supply chains can be particularly problematic when, for example, operating in parts of Africa, Asia and South America where control over local operations may be relatively weak or local labour conditions opaque.

The Modern Slavery Act 2015 (MSA) is the UK's latest response to the problem of modern slavery, and has brought transparency in supply chains to the forefront and, for the mining sector in particular, it coincides with a greater focus on conflict minerals and supply chains at the EU and broader international level. Under the MSA, commercial organisations (body corporates or partnerships) with a minimum global turnover of GBP 36 million and carrying on any part of their business in the UK will be required to publish an annual "slavery and human trafficking statement". The reporting obligation is expected to commence in October 2015 with statutory guidance on the kinds of information that may be included in a statement to be published by the Government to coincide with the reporting duty coming into effect.

The New Reporting Obligation

A slavery and human trafficking statement is a statement of the steps (if any) taken by an organisation to ensure modern slavery is not taking place in its own business operations or in its supply chains. For those meeting the reporting threshold, the statement is required to be published each financial year on the organisation's website and, depending on the type of organisation, must be approved by the board of directors and signed by a director (body corporates), approved by members and signed by a designated member (limited liability partnerships), approved and signed by a general partner (limited partnerships), or a partner (for any other form of partnership).

The MSA sets out a high-level framework of what may be included in a statement and covers the following key areas:

  • a brief description of an organisation's business model and supply chain relationships;
  • policies relating to modern slavery, including due diligence and auditing processes implemented;
  • training available on modern slavery;
  • the principle risks related to slavery and human trafficking (including how risks are evaluated and managed in their organisation and supply chains); and
  • key performance indicators (allowing third parties to assess the effectiveness of the activities described in the statement).

The statutory guidance should include more specific guidance on the contents of a statement and is likely to also address broader issues including how modern slavery can be identified by businesses and good practice on due diligence processes.

Drivers of Compliance

Legal sanctions for non-compliance with the reporting requirement under the MSA are limited - the Secretary of State is merely empowered to commence proceedings for an injunction requiring an organisation to prepare a statement. Instead, public scrutiny and the press are intended to be the primary divers of compliance. Negative attention from customers, activist shareholders, trade unions and civil society will likely prove an effective incentive for many organisations, particularly those already in the spotlight (such as resource companies operating in conflict zones or jurisdictions where modern slavery is prevalent). California has similar legislation and NGOs, such as KnowTheChain, are actively engaged in 'public shaming' activities, publishing details on their website of companies that are non-compliant with reporting requirements under the California Transparency in Supply Chains Act 2010. The Business and Human Rights Resource Centre has also been active in this space and is very likely to turn its attention to non-compliant organisations under the UK regime. Resources companies subject to the reporting requirement under the MSA should therefore ensure their slavery and human trafficking statement is underpinned by appropriate and proportionate action that it is defensible in the face of scrutiny from both inside and outside of the organisation and from home and abroad (eg, from local communities displaced by a mine site or that have supplied labour to construct a pipeline).

Resources companies will undoubtedly take different approaches to supply chain due diligence, management and the reporting requirement depending on their particular sectoral and jurisdictional risk profiles (eg, offshore gas operations may attract relatively fewer supply-chain issues than land-based extractive activities). Nevertheless, whatever the particular risk profile, most organisations will benefit by focusing on the development of clear procurement policies that address modern slavery, inclusion of contractual protections in supply contracts (such as warranties and audit rights), clear labour and whistleblowing policies, and consistent messaging throughout the supply chain. For those organisations operating in high risk jurisdictions, enhanced due diligence and implementation of more stringent preventative measures will likely be required. Although the allegations have been vehemently denied by the company concerned, the recent filing of a lawsuit in British Columbia by three Eritreans accusing a Canadian miner of complicity in the use of forced labour by its local contractor in Eritrea, drive home the legal and public relations risks that the resources sector faces now that modern slavery is clearly in focus.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Brett Hartley
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.