Unfortunately all too few businesses will be aware of their obligations under the Modern Slavery Act 2015, which consolidates UK law on slavery and human trafficking. One important aspect of the Act is to place an obligation on businesses to have transparency within their supply chains.

Which businesses have to make a Slavery and Human Trafficking Statement?

Any businesses that supply goods or services and that have a turnover exceeding £36 million must prepare a slavery and human trafficking statement every financial year. The requirement is applies to any incorporated company (regardless of where it was incorporated) or partnership (including limited liability partnerships) – irrespective of the place of formation – that carries on its business, or part of its business in the UK. The obligations therefore also apply to overseas businesses providing goods or services within the UK.

The threshold of £36 million was chosen as this is the threshold for large businesses in the Companies Act 2006, and it was anticipated that the statement would be included in the company’s annual accounts. Therefore, small and medium-sized businesses do not have to provide the statement. However they should consider how they would respond to any request from a customer which is subject to the Act.

What information must a Slavery and Human Trafficking Statement include?

The organisation must provide either:

• a statement detailing what steps the business has taken during the financial year to ensure that slavery and human trafficking is not taking place within its supply chain or any part of its business; or
• a statement that the organisation has not taken any such steps.

The statement may include information about the organisation’s structure, its business and its supply chains; its policies, due diligence processes and staff training in relation to slavery and human trafficking; any risks identified and steps taken to manage such risks; and its effectiveness in ensuring that slavery and human trafficking is not taking place.

Where should the statement be published?

It is envisaged that the statement will be published in the annual accounts for most businesses.

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However, if the organisation also has a website, a copy of the statement must be placed on the website, with a prominent link to the statement appearing on the homepage. If the business does not have a website, then it must provide a copy of the statement in writing to anyone who requests it, within 30 days of receipt of the request.

Who is required to approve the statement?

In the case of an incorporated entity, the statement must be approved by the company’s board and signed by a director (or equivalent). In the case of a limited liability partnership, the statement must be approved by the member and signed by a designated member (or in the case of a partnership, signed by a partner).

When does the requirement come into force?
The Act came into force on 1 October 2015.

What should you be doing?

Your organisation should be considering the following processes to meet its obligations under the Act:

• suitable staff training, including at Board level;
• the preparation of a slavery and human trafficking statement for approval by the Board and inclusion in the accounts and the organisation’s web site;
• carrying out a risk analysis, including making appropriate enquiries of its existing suppliers; and
• amending contractual terms to require suppliers to give effect to the organisation’s anti-slavery and human trafficking policies.

Organisations should also consider including a general “Compliance with laws and policies” within their standard commercial terms/agreements, if they do not already have such a provision.

What will happen if you fail to provide a statement?

The Secretary of State may apply to the High Court for an injunction against any organisation that fails to comply with any of the requirements relating to the Slavery and Human Trafficking Statement.

David Clark

Partner IBB Solicitors

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