The purpose of the Modern Slavery Act 2015 is to consolidate offences relating to trafficking and slavery. However, on 29 October 2015 section 54 came into force. This required commercial organisations with a minimum turnover of £36 million per annum and which supply goods or services to prepare a slavery and human trafficking statement for each financial year. Companies must provide either a statement of the steps taken to ensure that slavery and human trafficking are not taking place in any part of their business or supply chain, or that it has not taken any such steps.
However, while the headline relates to organisations with a turnover of £36 million it is incorrect to think that is where the reach of this legislation will end. Businesses with a turnover at that level will have their own supply chains, and it is exactly these supply chains that they are required to report upon. How will they do that? Most likely by requiring the smaller businesses in the chain to report to them.
Responsible organisations may also put policies in place to support their approach to human trafficking and slavery. This may well result in procedures being put in place to deal with scenarios where an existing supplier is found to have been involved in modern slavery, or the application of stricter investigations into a supplier as part of a tendering process, or when renewing contracts with existing suppliers. It is likely, at that point in time, that larger organisations will start to ask questions relating to the Modern Slavery Act of those in their supply chain, irrespective of the turnover of the supply chain organisations. These measures will, in turn, result in smaller organisations having to consider their own actions and supply chains.
In November 2015 we reported on the Home Office guidance produced to assist businesses in complying with this requirement. While smaller businesses will not be subject to any sanctions under the legislation, it may be that in order to maximise their business and to ensure that they do not lose out on tender or other contract opportunities that this will become an issue which needs to be addressed.