Thousands of the biggest companies in the UK will have to prove they have taken action to ensure they do not use child or slave labour under plans set out by prime minister David Cameron.
The plan was announced by Cameron as he prepared to become the first British prime minister to visit Vietnam, a country which has been the source of criminal gangs exploiting child labour in the UK.
The new law will apply to more than 12,000 firms with a turnover of £36 million or more from October. The firms will be required to publish an annual statement setting out which steps they are taking to ensure that slave labour is not being used.
Cameron said: “This measure is one of the first of its kind in the world and it will be a huge step forward, introducing greater accountability on business for the condition of their supply chains.”
The move is part of the Modern Slavery Act. The act will introduce trafficking reparation orders which encourage the courts to use seized assets to compensate victims, and prevention orders to restrict the activities of potential slave masters.
Phil Bulman, managing consultant at supply chain consultants Vendigital said: “By encouraging companies to be more accountable for their supply chains, the incoming legislation means they will need to start policing their supply relationships even more closely and invest more resources in doing so. This will require greater corporate honesty as it will no longer be acceptable for businesses to ignore what they can’t see.”