The new Prime Minister Theresa May has announced a review of the Modern Slavery Act 2015; it is clear that corporate compliance shall be high on the agenda in her first year in Office. She observed in robust terms a little over a year ago that  “…it is not acceptable for any organisation to say, in the twenty-first century, that they did not know about slavery. It is not acceptable for organisations to ignore the issue because it is difficult or complex. And, it is certainly not acceptable for an organisation to put profit above the well-being of its employees and those working on its behalf”. 

It is thus surprising that an independent survey by VinciWorks has revealed that only 9% of the FTSE 500 have fulfilled their disclosure duties under the terms of the Act. Not only are such companies at risk of financial penalties, it is plain that a company with strong policies in respect of slavery and corporate compliance will be attractive to clients and investors; as such they are damaging their reputation. We consider that it is only a matter of time before companies shall be named and shamed and the introductory grace period seemingly being afforded shall expire.

Modern slavery is undoubtedly extremely prevalent across the globe. The Modern Slavery Act provisions are designed to encourage businesses to tackle slavery in a proactive fashion. The relevant provisions in the Act requires that any commercial organisation in any sector, which supplies goods or services, and carries on a business or part of a business in the UK, and is above a specified total turnover (currently £36million) must produce a slavery and human trafficking statement for each financial year of the organisation. The obligation even applies to law firms; and not all of those have complied.

The statement must set out what steps the company have taken during the financial year to ensure that slavery is not occurring in their supply chains and in their own organisation. That statement must be readily available online, accessible from the company’s homepage.

If a business fails to produce a slavery and human trafficking statement for a particular financial year the Secretary of State may seek an injunction through the High Court requiring the organisation to comply. If the organisation fails to comply with the injunction they shall be in contempt of a court order, which is punishable by an unlimited fine (in addition to no doubt being obliged to pay the Secretary of State’s legal fees).

The same taken together with the potential damage to reputation means that those companies that have not complied should do so as matter or urgency. Those that are unsure if they are required to comply or whether their subsidies/supply chains are obliged, should seek advice at the earliest opportunity. A proactive approach, not reactive, is required.

It is advised by CORE that companies take action to understand the risks of modern slavery occurring in business operations, paying particular attention to business models, operating context and the nature and location of work. CORE suggest developing comprehensive policies which will influence decision-making within the business on a day to day basis in relation to slavery and human trafficking. Closely linked to the issue as to compliance in respect of the statement, is that companies should put in place procedures for reporting concerns over modern slavery within the company’s operations, including whistleblowing procedures. CORE also recommend that companies should identify who will require training on the new obligations, for example, directors and employees who have direct responsibility for supply chain management and procurement.

Suggested reading can be found at:

(1) https://www.gov.uk/government/publications/transparency-in-supply-chains-a-practical-guide

(2) http://corporate-responsibility.org/publications/briefing-papers/beyond-compliance/

If you or your organisation would like legal advice or training on tackling slavery then please do not hesitate to contact Chambers’ Senior Clerk, Daniel Bartlett.

Kevin Molloy:  Kevin defended as Leading Counsel in the first slavery prosecution in England for 200 years and shortly thereafter the first slavery case in Wales; he was acquitted in both. He is routinely instructed to defend in the broad spectrum of criminal offences and is renowned for tackling complex legal matters in a no-nonsense straight talking fashion. 

Colin Witcher:  Colin routinely provides advise on corporate compliance including to banking institutions on insider dealing and personal employee account dealing. He has provided training on corporate crime, health and safety and whistleblowing including to local authorities.