For the aviation sector, modern slavery (covering slavery,
servitude, forced and compulsory labour and human trafficking)
could be a major supply chain issue, particularly in relation to
the providers of ancillary services such as catering, cleaning and
ground/baggage handling in countries with more challenging labour
Rules implemented in October 2015 require companies with a
turnover of GBP 36 million or more to produce a "slavery and
human trafficking statement" at the end of each financial
The rules apply to businesses with a year end of 31 March 2016
or later and the statement should be published as soon as possible
(and in practice within six months) after the year end. The
statement must be published on the organisation's website with
a link "in a prominent place" on its homepage.
Which organisations must comply?
Any company which carries on a business in the UK, or part of a
business in the UK, supplies goods or services and has an annual
turnover of GBP 36 million or more. A company's turnover is
determined by combining the turnover of its subsidiaries with its
own. Any UK subsidiary which meets this threshold must also produce
its own statement. These parameters will capture almost all
airlines operating within the UK as well as many aviation service
What must the statement contain?
In short the organisation must state:
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 any
part of its own business (including its foreign subsidiaries)
That the organisation has taken no
There are no further compulsory requirements regarding the
content of the statement. The only penalty is for failure to
produce one at all, in which case the organisation can be compelled
by Court order to do so.
What might the statement contain?
The new rules give non-compulsory examples of what a statement
may contain information on, for example:
The organisation's structure,
business and supply chains
Its policies in relation to slavery
and human trafficking
The parts of its business and supply
chains where there is risk of modern slavery taking place and what
steps have been taken to assess and manage that risk
The training on modern slavery
available to staff
Additionally, the government has released
guidance on the preparation of a statement, suggesting, amongst
other things, that an organisation disclose information on:
The guidance is not compulsory and there is no legal penalty for
non-compliance. However, it is clear that the Government expects
consumers, investors and NGOs to engage and/or apply pressure where
they believe the business has not taken sufficient steps. The real
risk to airlines is therefore in being named and shamed by pressure
groups or media organisations for not producing a sufficiently
clear statement or, worse, evidence being uncovered inconsistent
with the information in the statement. Parallels can be seen in
relation to the reputational damage caused to retailers following
the exposure of poor working conditions of garment producers in
Similar rules are in place in California where the NGO
"KnowTheChain" has already engaged in public shaming
exercises. The London and New York-based Business and Human Rights
Resource Centre has also been active in approaching non-compliant
organisations under the Californian regime and is very likely to
turn its attention to businesses who fail to comply with the
spirit, or letter of reporting requirements under the new UK
What companies should do next
Organisations subject to the reporting requirement will need to
ensure their slavery and human trafficking statement is underpinned
by appropriate and proportionate action that is defensible in the
face of scrutiny and criticism from inside and outside of the
Procurement policies should address modern slavery, and
organisations should ensure that they have contractual protections
in supply contracts; clear labour and whistleblowing policies; and
consistent messaging throughout the supply chain. However, for
those organisations operating in high risk jurisdictions, enhanced
due diligence and the implementation of more stringent preventative
measures will undoubtedly be required.
With the inclusion of an electronic bills of lading clause in the latest iteration of the NYPE form, as well as the International Group of P&I Clubs' approval of 3 electronic trading systems, we discuss some of the possible advantages and disadvantages of such systems to international trade.
It is common practice for traders, usually when they are the sellers of the goods and the charterers of a vessel, to instruct the carrier to discharge cargoes without production of the original bills of lading and to agree to indemnify the carrier against the consequences of doing so.
A trading dispute under an FOB contract provides the opportunity to clarify a number of issues including the role of local custom in the nomination of a port, whose right it is to nominate a loading place within a port, the nomination of a vessel incapable of loading at the original loading place and the nomination of a vessel incapable of performing the shipment.
Zohar Zik considers the decision of ACG Acquisition XX LLC v Olympic Airlines SA, where the court refused to grant summary judgment on a claim for unpaid rent in respect of a leased aircraft where it was arguable that ACG Acquisition XX LLC ("ACG"), the lessor, had breached the lease agreement and failed to provide Olympic Airlines SA ("Olympic"), the lessee, an aircraft in an airworthy condition.
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).