UK: What To Watch Out For In 2016: Modern Slavery Statements

For some, this will be a risky assumption to make. The new disclosure rules requiring the publication of modern slavery statements are aimed at focusing corporate attention on the prevention of labour exploitation in businesses and supply chains in the UK and abroad.  Can you be sure that all the workers in your supply chains are willingly supplying their labour? Without appropriate checks and procedures in place, this will be very difficult.

The main risk of not publishing an accurate and defensible statement is reputational rather than legal. A failure to publish a "slavery and human trafficking statement", or the publication of false information may, for example, attract criticism from unions, whistleblowers or pressure groups, with the risk that your name may be dragged through the mud.  This has already happened in California where a similar disclosure requirement is in place, so be warned! 

What do you need to do now? 

Now is the time to start preparing to avoid any logistical headaches. 

• Determine whether your organisation is caught by the new rules (see below)
• Determine the date on which you should publish your first slavery and human trafficking statement 
• Put together a plan for drafting and approving the statement 
• Consider whether any of your current corporate responsibility policies are sufficient and whether further policies are needed
• Double check you have paid your own UK workers national minimum wages and that you have robust immigration checks in place 
• Identify any risk areas in your supply chains and consider whether any additional due diligence is required 
• Confirm what steps your suppliers are taking to ensure their businesses and supply chains are slavery free, which may include undertaking site visits and audits  
• Review your supplier contracts and include an obligation on the supplier to comply with the new rules.  

A brief summary of the new requirements

The new rules catch companies (and partnerships) with a minimum turnover of £36 million that supply goods or services and carry on business in the UK.  Importantly, the turnover of subsidiaries is included in the calculation, wherever they're based in the world. 

Businesses with a year end of 31 March 2016 or later will need to publish an annual statement confirming:

• the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains or in  any part of its own business (including its foreign subsidiaries) or
• that the organisation has taken no such steps

The statement should be published as soon as possible after the relevant year end (and in practice within six months of that date).  The statement must be approved by the Board and signed by a Director (or the equivalent) before being published on the organisation's website with a link "in a prominent place" on its homepage.

For more detail on what the statement might contain and the government guidance, see our previous alerts here. 

How can we help you prepare?

We can:

• Advise you, on a legally privileged basis, about appropriate risk assessments and due diligence on your supply chain  
• Review current policies and procedures and draft any additional policies 
• Review and amend your supply contracts to promote compliance within your supply chain. 
• Advise on appropriate staff training 
• Help you draft your annual statement

Key dates

31 March 2016 – the year end of the first companies caught by the new rules

30 September 2016 – the date on which the first annual "slavery and human trafficking statement" should appear on those companies' websites 

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.