UK Modern Slavery Act – a compliance reminder

Designed to combat human trafficking and slavery, the UK MSA came in to force in 2016.

It requires the publishing of a ‘human trafficking and slavery statement’ by qualifying companies. The first such statements have already appeared.

Who is caught?

The MSA obligations apply to businesses that have a worldwide turnover of more than £36 million and do business, at least partly, in the UK.

  • Businesses are advised to take a common sense approach to the question of whether they are doing business in the UK. If there is no demonstrable business presence in the UK, the MSA is unlikely to apply.
  • Turnover is net worldwide commercial turnover (including subsidiaries) after deducting discounts and trading taxes.

What to do?

Qualifying companies must publish a statement of what steps (if any) they have taken to ensure that no modern slavery or human trafficking occurs in their business or their supply chains.

They are not obliged to take any steps but, if they don’t, the MSA statement must report this fact.

Where to do it?

The statement should be published prominently on the business’s website with a clear link on the Home page.

When to do it?

It should be published as soon as reasonably practical after each financial year end. The first MSA statements must be published in relation to financial years ending on or after March 31, 2016. Therefore the first MSA statements have already appeared. Most businesses are likely to publish the statements at the same time as their financial statements.

What should the statement contain?

There is no prescribed form although official guidance has been provided. Ultimately the approach and style will be personal to each business.  The MSA however provides a number of examples of what may be included in the statement:

  • the organisation’s structure, its business and its supply chains;
  • its policies in relation to slavery and human trafficking;
  • its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
  • the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
  • its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate;
  • the training about slavery and human trafficking available to its staff.

Here are two early published examples:

Shell UK Modern Slavery Act
Visa Europe Modern Slavery Act

The statement could simply state that the organisation has taken no steps to prevent breaches of the MSA but, from a public relations perspective, this is extremely unattractive.

Penalties for breach

It is unlikely that enforcement proceedings for failing to publish the MSA statement will be brought at least in the early years. Rather, the driver will be stakeholder pressure and fear of reputational harm.