Compliance With the UK Modern Slavery Act: What It Means for Companies (Part I of II)

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If you follow our blog, you’ll notice lately we’ve been writing frequently on topics related to human trafficking and modern slavery.  This is no accident, as new laws and regulations related to this growing area of compliance continue to spring into existence.  Lately, I’ve fielded some inquiries related to the UK Modern Slavery Act of 2015.  While the Act is not necessarily new, there has certainly been an increased focus on it as of recent. 

The UK Modern Slavery Act is also unique and, to me, rather clever in its requirements.  First and most importantly, the Act requires any company doing business in the UK with an annual turnover of £36 million or more to publicize their efforts in combatting modern slavery in their respective supply chains through an annual statement.  These public statements force companies to take accountability for their compliance and will ostensibly prevent simple, boilerplate statements.  While it’s important to condemn modern slavery, its even more important to “walk the walk” and take tangible steps to actually do something about it within the confines of your own operations.  The public nature of the statement forces companies to actually put up or shut up—there is no hiding your actual efforts.  I think this is a great way to achieve actual, productive change.  Second, the regulation requires annual updates to each statement.  As such, companies are tasked with laying out forward looking plans and then measuring themselves against those.  Essentially, companies should show that they did what they said they would.  The public nature and the annual updates are a great way to hold companies accountable.

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Furthermore, and this is important to grab the ears of the business executives, many public tenders include specific requirements regarding modern slavery compliance.  These tender requirements frequently score participants based on how well they may be complying with the regulation and how much they’re doing in order to actually take proactive actions to advance the goals of the regulations.  Put simply, compliance with the UK Modern Slavery Act equals good business. It can be an important differentiator in these tender processes, as many tenders actually require higher standards than what the regulations call for.  As such, it makes business sense to not only comply, but to implement best practices.

All that said, compliance with the UK Modern Slavery Act does not need to be difficult. It doesn’t necessarily require an overhaul to an existing compliance program.  Rather, many of the requirements should be things that you’re already doing in your program, and you should therefore get credit by explaining those in your Modern Slavery Statements. Let’s first go over the requirements.

First, the UK Modern Slavery Act only requires the following:

  • Publishing a public statement regarding a company’s stance on modern slavery and its efforts made combatting it in its supply chain.
  • Update this statement annually.
  • Publish the statement with a link on your UK-facing homepage.
  • Get approval for the statement by the board of directors (or equivalent).
  • Have the statement signed by a director (or equivalent).

Next, there are several recommended disclosures:

  • Explain the company’s organizational structure and its supply chain structure.
  • Note the policies that are relevant to modern slavery and related to compliance of such.
  • Explain the company’s due diligence process, especially as it relates to suppliers.
  • Discuss the company’s risk assessment and management process.
  • Lay out key performance indicators (“KPIs”) to show how your company measures compliance with
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These requirements are not onerous. And while most companies can find improvements they can make, most will find that they easily meet the minimum requirements and can even boast about achievements within the recommended sections.  The minimum requirements simply involve a public statement describing the company’s efforts towards combatting modern slavery in its supply chains. Many companies post simple, concise statements that hit the key points. Other companies publish yearly reports that take a significantly deeper dive into all of the company’s efforts and the lessons learned.

Whichever your company decides, the point is to provide transparency on compliance in this area. Many companies worry they’re not doing enough, and while there are always ways to improve, most of these companies may be doing more than they even realize. Part II will discuss some “easy wins” that companies can highlight in their respective statements to showcase their efforts and ultimately produce a high-quality statement.

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