Recent guidance encourages small businesses to publish a statement under the Modern Slavery Act 2015

Under the Modern Slavery Act 2015 businesses which supply goods or services from or to the UK, and have a global turnover above £36 million, must publish a slavery and human trafficking statement each financial year.  This statement should set out the steps the business has taken to ensure that there is no slavery or human trafficking in their business or supply chains.

The Home Office has recently published updated guidance on this statement.  This article focuses on the key updates most applicable to local businesses.

Small Businesses:

Under the Act, only businesses which meet the turnover threshold are required to publish a statement.  However, the updated guidance states that smaller organisations are free to voluntarily publish their own statement and may find it beneficial to do if they are:

·         responding to supply chain due diligence queries, which might ask if that business has a statement or policy setting out their approach to tackling modern slavery; and/or

·         bidding for contracts against businesses that have a modern slavery statement.

The guidance encourages all businesses to be open and transparent about their recruitment practices, policies and procedures in relation to modern slavery and to take steps that are consistent and proportionate with their sector, size and operational reach, even if the Act does not apply.

In our experience we have found that larger organisations and particularly those that operate within the public sector are requiring their suppliers to demonstrate compliance with the principles of this Act.  If you are increasingly facing this challenge then it could be commercially prudent to publish a statement.  You may find that this could be used as a sales differentiator against your competitors in the market place.

Structure of Statement:

The guidance clarifies what information a statement should include in order to comply with best practice.  This includes information regarding the business’s structure, policies, due diligence processes, effectiveness of steps taken measures against key performance indicators, as well as training about slavery and human trafficking.

Subsequent Statements:

If your business has already published a statement then you will need to ensure that your next statement outlines the improvements your organisation has made to tackle modern slavery both within the business and its supply chains.  If you haven’t taken steps to address this then we strongly advise you do so without delay.  You should be aware that statements are due to be published within 6 months from the financial year end.

Businesses are encouraged to keep their previous statements available on their website.  It is also recommended that if a business publishes a statement and then its turnover dips below the £36 million requirement it should still continue to publish yearly statements.  It is clear that measuring progression and transparency are key factors in order for compliance and success to be measured.  Therefore, we would recommend that you take advice before publishing a subsequent statement so your business can demonstrate effectively any improvements it has made.

Takeaway message:

All businesses are encouraged to publish a statement even if they are not required to legally do so, especially where such organisations are looking to work with larger organisations caught by the Act.  If this applies to you then you should consider whether it is commercially beneficial to produce a statement.  You should also consider reviewing your supply chains, contracts and policies to ensure that you are adopting the principles set out within the legislation.

Businesses that have already published their first statement should ensure that their next statement demonstrates the action they have taken and the improvements made based on the measures outlined in their previous statement. While key performance indicators were not so important in a business’s first statement, it is now clear previous statements will be used as a measure by which potential investors, consumers and the media gage the effectiveness of the steps taken by the business to ensure that there is no slavery or human trafficking in their business or supply chains.  Overall, it is clear that businesses of all sizes should be proactively reviewing their procedures and approach to modern slavery issues.

For advice and assistance on modern slavery issues then please contact Stephens Scown corporate team at corporate.cornwall@stephens-scown.co.uk or 01872 265100.