UK: Tackling Modern Slavery: Are You ready?

Last Updated: 5 September 2016
Article by Brett Hartley, Clare Hatcher, Rebecca Ford and Sara Khoja
Most Read Contributor in UK, October 2017

A 'soft' September deadline is now looming for those organisations with a financial year end of 31 March 2016 and who are caught by the supply chain transparency disclosure obligations under the Modern Slavery Act 2015 (MSA). The MSA includes landmark supply chain transparency provisions under s54 which require 'commercial organisations' (body corporates and partnerships) supplying goods or services with a global turnover of £36 million or more and who carry on business in the UK to publish an 'annual slavery and human trafficking statement' on their website.

This is a statement of the steps taken (if any) to ensure modern slavery is not taking place in the organisation's global business or supply chains and is designed to incentivise large organisations to take responsibility for eliminating modern slavery throughout their supply chains. The MSA's Statutory Guidance makes it clear that while statements should be published as soon as possible, in practice the Government 'encourages' organisations to report within six months of their financial year end.

The 'soft' deadline comes at a time when the UK Government has refocused its attention on tackling modern slavery with the Prime Minister, Theresa May, re-affirming her commitment to the issue in July 2016 by establishing a government taskforce on modern slavery and pledging over £33 million to create a five-year International Modern Slavery Fund focused on high-risk countries. More generally, the market is now much more alive to the issue of modern slavery. Many organisations across various sectors, (some of which have never previously engaged with the issue), are now developing modern slavery policies and procedures, mapping their supply chains, and talking to suppliers about required standards. Of course, there are undoubtedly others that are yet to engage or have taken a rather casual approach, as evidenced by some of the questionable slavery and human trafficking statements already published.

This update is the first in a series of articles focusing on supply chain transparency and modern slavery. We have highlighted below some of the key developments over the last few months, which will be followed by sector, regional and issue specific updates with more in-depth analysis.

Register of Statements

The Business and Human Rights Resource Centre (BHRRC) has continued to develop its central register of slavery and human trafficking statements. Over 500 statements have now been collected with links through to each statement from BHRRC's website. This is an excellent benchmarking tool for those yet to publish statements, but it should not be a race to the bottom. An early analysis by BHRRC and Core Coalition found that of the 75 statements examined only 22 satisfied both legal obligations under the s54 (ie, (i) the statement must be signed by a director or the equivalent; and (ii) it must be published on the organisation's website and include a link to the slavery and human trafficking statement in a prominent place on that website's homepage). These are basic legal requirements that all organisations should be able to satisfy. Unfortunately, the 500 or so statements published so far vary greatly in both quality and compliance with these basic requirements.

Strategic Litigation

It is clear that so-called strategic litigation is set to rise where organisations are linked to, or complicit in, modern slavery – in particular bonded or forced labour and human trafficking. Large organisations with brands and reputations to protect are more likely to be targeted, particularly if they operate in high risk areas such as the construction sector, the service industry, agriculture or other primary industries. The BHRRC hosted a well-attended seminar - Strategic Litigation on Modern Slavery in Global Value Chains - in May 2016. It was apparent from the seminar that the construction sector in Qatar and the UAE is likely to be subject to special attention. Notably, the Freedom Fund has released a guide to using strategic litigation to combat modern slavery, which the Freedom Fund describes as a "roadmap to create an international strategic litigation network to punish and deter human traffickers". One of the key takeaways from the BHRRC seminar was a comment by the UK's Anti-Slavery Commissioner, Kevin Hyland, that a company's slavery and human trafficking statement should be a good indicator of whether a company "ought to have known" that modern slavery was occurring in their supply chain (ie, evidence of a criminal offence under the MSA). This is a clear indicator that published statements need to be approached with the gravitas they clearly deserve, state the steps that have actually been taken to address modern slavery, and not overreach or exaggerate the organisation's approach to the issue.

Global Indexes

The 2016 Global Slavery Index (GSI) was published in May 2016 and showed a 10 million increase in the estimated number of people trapped in modern forms of slavery over the 2014 GSI figures (from 35.8 to 45.8 million in total). An alternative to the GSI has now also been developed by Verisk Maplecroft. These indexes can be important tools for assessing and mapping country risks in a similar way to Transparency International's Corruption Perception Index that has been used for years in the context of bribery and corruption due diligence. Other useful tools include the US State Department's "List of goods produced by child labor or forced labor", which is broken down into goods and their source countries and the UK Government's industry-by-industry fact sheets on modern slavery.

Modern Slavery (Transparency in Supply Chains) Bill

Legal sanctions under the MSA for failing to comply with the disclosure obligation under s54 are currently limited to a Court injunction compelling the organisation to publish its statement. There are no fines or penalties for failing to publish a statement (or for doing so poorly or inaccurately), unless the failure is in contempt of a court order to publish. In an attempt partly to remedy this, the MSA may be about to get some bite. A private member's bill is currently before the House of Lords which, if passed by both Houses of the UK Parliament, would:

  1. require commercial organisations and public bodies to include a modern slavery and human trafficking statement in their annual report and accounts;
  2. require the Secretary of State to publish a list of all commercial organisations by sector that are required to publish a statement; and
  3. amend the Public Procurements Regulations to provide for an exclusion for participation in public procurement where an organisation has failed to produce a statement.

Bills instigated by the House of Lords are notoriously difficult to get through both houses, but the Bill is emblematic of calls from many quarters to increase the stakes. Of course, there remains the possibility that if organisations do not take their obligations under the MSA seriously, we could eventually see the introduction of a corporate offence for failing to prevent slavery occurring in supply chains (with an adequate procedures defence), mirroring the Bribery Act 2010.

Bribery, Corruption and Modern Slavery

Wherever there is slavery and human trafficking there will almost inevitably be some form of corruption, whether a payment is made to a border guard to turn a blind eye to human trafficking or to pay a local official to keep quiet about labour conditions in a factory. The issue for organisations and their supply chains is that anti-bribery legislation, such as the UK Bribery Act 2010, has very high penalties when it comes to bribes by the company or associated persons (including those in supply chains). This fact has not been missed by NGOs, with the Freedom Fund, together with other NGOs such as Liberty Asia, releasing a comprehensive analysis of the application and use of the Bribery Act and the US Foreign Corrupt Practices Act in the fight against modern slavery. As the focus on this issue intensifies, organisations need to be conscious of potential exposure to corrupt practices associated with modern slavery, particularly when it comes to ensuring they have adequate procedures in place under the Bribery Act to prevent bribery by associated persons (within their supply chains).

Where to Next

The focus on modern slavery and supply chains is clearly intensifying. Organisations can no longer afford to ignore any form of modern slavery in their global supply chains. For those organisations operating in high risk sectors or jurisdictions, human rights-related supply chain due diligence should, in our view, take a prominent place alongside other core compliance practices focused on issues such as anti-bribery and corruption, anti-money laundering, economic and trade sanctions, and environmental and social harm. The warning signals to industry are only getting stronger.

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
Sara Khoja
 
In association with
Related Video
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.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

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.