Understanding the Legal Obligations for UK Companies: Navigating the Anti-Slavery and Human Trafficking Statement Under the Modern Slavery Act 2015

The Modern Slavery Act 2015: A Comprehensive Overview

The Modern Slavery Act 2015 is a landmark legislation in the UK aimed at combating modern slavery and human trafficking. This act imposes significant legal obligations on UK companies, particularly those with an annual turnover of £36 million or more. Here, we will delve into the specifics of these obligations and how businesses can navigate the requirements effectively.

Key Provisions of the Act

Under Section 54 of the Modern Slavery Act 2015, companies must publish a Modern Slavery Statement at the end of each financial year. This statement must detail the steps the company has taken to address the risks of slavery and human trafficking in their business and supply chains.

The Importance of the Modern Slavery Statement

The Modern Slavery Statement is not just a compliance requirement; it is a critical tool in the fight against modern slavery. Here’s why it matters:

Transparency and Accountability

The statement ensures transparency in business operations and supply chains, making companies accountable for their actions. It requires companies to disclose their policies, due diligence processes, and any measures taken to mitigate the risk of modern slavery.

Identifying and Mitigating Risks

Companies must identify the key risks within their business and supply chains. This involves understanding which parts of the supply chain or business areas are most vulnerable to modern slavery. For instance, sectors involving manual labor, such as construction or agriculture, are often at higher risk.

How to Conduct a Modern Slavery Audit

Conducting a thorough audit is essential to ensure compliance with the Modern Slavery Act. Here are the steps to follow:

Identify Modern Slavery Risks

Assess Vulnerable Areas: Identify which parts of your supply chain or business are most prone to modern slavery. This could include sectors like manufacturing, agriculture, or construction.
Review Existing Policies: Ensure your current policies on slavery, human trafficking, and labor practices are up-to-date and effective.

Conduct Supplier Due Diligence

Request Modern Slavery Statements: Ask suppliers to provide their Modern Slavery Statements and conduct audits on those in high-risk categories.
Enquire About Operations: Investigate how suppliers source labor and materials, and the prices paid to their suppliers further down the supply chain.

Review Workplace Policies

Update Policies Regularly: Regularly review and update your modern slavery policies to ensure they reflect any changing risks.
Ensure Clarity and Compliance: Make sure policies are clear, detailed, and aligned with other initiatives such as the UN Global Compact or Ethical Trading Initiative.

Responsibilities of First Responder Organisations

First responder organisations play a crucial role in identifying and referring potential victims of modern slavery. Here are their key responsibilities:

Identifying Potential Victims

Recognise Indicators: Identify potential victims of modern slavery and recognise the indicators of exploitation.
Gather Information: Gather information to understand what has happened to the individuals.

Referring Victims

Refer to the NRM: Refer victims into the National Referral Mechanism (NRM) via the online process.
Notify the Home Office: If an adult victim does not consent to being referred, notify the Home Office using the Duty to Notify (DtN) process.

Supporting the Competent Authority

Provide Point of Contact: Act as a point of contact for the competent authority to assist with decisions and request reconsiderations if necessary.
Cooperate with Police: Refer potential victims to the police, either with their consent or as a third-party referral, ensuring no breach of confidence.

Practical Steps for Businesses

Here are some practical steps businesses can take to comply with the Modern Slavery Act:

Drafting the Modern Slavery Statement

Include Necessary Information: The statement should include details about the company’s structure, its business and supply chains, the policies in place to address modern slavery, the due diligence processes, the parts of the business and supply chain where there is a risk of slavery and human trafficking, and the steps taken to assess and manage that risk.

Training and Awareness

Compulsory Training: Ensure that relevant staff, such as those in procurement, HR, and legal teams, undergo compulsory training to identify and report modern slavery.
E-learning Modules: Provide accessible e-learning modules for all employees to understand what modern slavery and human trafficking are and how to report concerns.

Auditing Suppliers

On-site Audits: Conduct on-site or remote audits of critical suppliers to verify their due diligence responses and compliance with modern slavery legislation.
Vendor Risk Management: Use vendor risk management tools to drive additional insight into supplier risk profiles and manage the supply chain effectively.

Example of a Comprehensive Modern Slavery Statement

Here is an example of how a company might structure its Modern Slavery Statement:

Section	Description
Company Structure	Overview of the company’s structure, including subsidiaries and supply chains.
Policies	Details of the company’s anti-slavery policy, procurement policy, and recruitment policies.
Due Diligence	Description of the due diligence processes in place to identify and mitigate the risk of modern slavery.
Risk Assessment	Identification of the parts of the business and supply chain where there is a risk of slavery and human trafficking.
Steps Taken	Details of the steps taken to assess and manage that risk, including training programs and supplier audits.
Performance Indicators	Key performance indicators (KPIs) to measure the effectiveness of the steps taken.
Future Actions	Plans for future actions to continue improving the company’s approach to combating modern slavery.

Quotes and Insights from Experts

“It is about relying […] on carefully thought-out regulation that rewards and encourages good behaviour, and ultimately holds companies to account if they fail to demonstrate that they take these sorts of issues seriously.” – Peter McAllister, former Executive Director of the Ethical Trading Initiative.
“The fight against modern slavery is a collective responsibility, and by ensuring transparency and ethical practices, we can help businesses protect human rights and stamp out these harmful practices.” – Alcumus SafeContractor.

Challenges and Future Directions

Despite the progress made, there are still challenges in implementing the Modern Slavery Act effectively. Here are some of the key issues:

Inconsistent Quality of Statements

The quality and content of Modern Slavery Statements vary significantly among companies. There is a need for more consistent and detailed reporting to ensure that companies are held to high standards.

Mandatory Human Rights Due Diligence

There is a growing call for mandatory human rights due diligence legislation to ensure that companies take their responsibilities seriously. Emerging legislation like the EU Corporate Sustainability Due Diligence Directive (CSDDD) highlights the need for more stringent regulations.

Import Bans

Import bans on goods made with forced labor could be an effective tool in preventing the circulation of such goods. However, this requires careful implementation to avoid unintended consequences.

Navigating the legal obligations under the Modern Slavery Act 2015 is crucial for UK companies to ensure they are not inadvertently supporting modern slavery and human trafficking. By understanding the requirements, conducting thorough audits, and maintaining transparency and accountability, businesses can play a significant role in eradicating these offences.

Here is a detailed list of steps to help businesses comply:

Identify Risks: Assess which parts of your business and supply chains are vulnerable to modern slavery.
Conduct Due Diligence: Audit suppliers and ensure they have appropriate modern slavery policies in place.
Draft a Comprehensive Statement: Include all necessary information about your policies, due diligence processes, and steps taken to mitigate risks.
Train Staff: Provide compulsory training to relevant staff to identify and report modern slavery.
Regularly Review Policies: Ensure policies are up-to-date and reflect any changing risks.
Engage with Suppliers: Work with suppliers to address any breaches or alleged exploitation.

By taking these steps, businesses can not only comply with the law but also contribute to a global effort to end modern slavery and human trafficking.