A reminder for those businesses caught by the Modern Slavery Act reporting provisions that the deadline for publishing your first “slavery and human trafficking statement” may be fast approaching.
The Act imposes a new requirement on commercial organisations carrying on business in the UK with an annual turnover of £36 million or more to disclose what activities they have undertaken to eliminate slavery and human trafficking from their business and their supply chains. Businesses with a year-end of 31 March 2016 will be the first businesses required to publish a statement for their 2015-16 financial year. Read our guide to the new Act for further information.
Although the Act does not stipulate when such information must be published, the Government’s Guidance says that it expects organisations to publish their statements “as soon as reasonably practicable” after the end of the financial year in which they are producing the statement and it would “encourage organisations to report within six months of the organisation’s financial year end”. If your business has a financial year-end of 31 March 2016 you should therefore be aiming to publish your first statement by 30 September 2016, 31 October latest for a year-end of 30 April, and so on.
While there are no financial or criminal penalties for failing to comply with these new disclosure obligations, the Government hopes that the risk of bad publicity and the potential threat to brand value, company reputation and investor relations will be sufficient to ensure that most affected businesses publish within the recommended timescale.
A quick look on the internet shows that some large organisations have indeed already published their first MSA statements. These vary widely, with some statements remarkably short and others much more comprehensive. The handful of statements I have looked at in the retail sector tend to be the most detailed, presumably reflecting the fact that this issue has been on the retail agenda for some time now, being one of the sectors most likely to be affected by slavery and human trafficking in the supply chain. As one would expect, the statements show that businesses are taking a variety of different steps to ensure there is no slavery and human trafficking in their organisations and supply chains, including introducing anti-slavery policies, training staff and suppliers, carrying out risk assessments and risk profiles, establishing helplines for reporting abuse and establishing key performance indicators and reporting on them.
A survey by the Business and Human Rights Resource Centre published in March 2016 indicates patchy compliance with the finer requirements of the statement. Of 83 slavery and human trafficking statements reviewed (i) only 22 met the two legal requirements of being on a link from the company’s homepage and being signed by a director, (ii) only 9 met those requirements and addressed all 6 of the criteria the Guidance suggests should be reported upon, (iii) 42 were either signed by a director or had a link from the homepage, and (iv) just 19 reported on all 6 criteria. These are obvious and unnecessary own-goals right from the start. Don’t let this be you.
Practical drafting points for employers:
- It is preferable to state (with reasons) that you do not consider there to be a material risk in your supply chain and therefore that you do not propose to do much about it, rather than to promise a full suite of anti-slavery measures and then not do them.
- The MSA Guidance suggests that you have to take further measures every year, but the Act absolutely does not say that. Be seen to review it each year but do not feel compelled to add to it every time if this is not necessary.
- If you are stuck for inspiration on how to start your statement, take a look at some of those out there already. Pick some of the higher-profile names in your sector and pay their webpages a visit.
- Pay heed in your statement to the six “ideal” content points referred to in the MSA Guidance (see link above), even if it is merely to dismiss one or more of them as not applicable or not practicable in your business’ particular circumstances.
- Remember that no one is marking your MSA for length, warmth, grammar, originality or soaring literacy style. Once you have given some consideration to what might properly be described as your supply chain (is it goods? services? people? where do they come from? any grounds to suspect unlawful exploitation in their production or delivery?), then these things are generally simpler than they sound.