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Talking Business: Are you ready for the Modern Slavery Act?

The Modern Slavery Act requires companies and organisations to examine their supply chain and declare it is free from slavery and human trafficking.

Paul Gillen Pinsent Masons

Paul Gillen, partner and head of Pinsent Masons employment law team, on why fashion retailers need to be ready for the 2015 Modern Slavery Act’s disclosure requirements.

From October 1 the Modern Slavery Act 2015 requires certain commercial organisations to prepare and publish a statement of the steps they have taken during each financial year to ensure that slavery and human trafficking are not taking place anywhere in their supply chains or in any part of their business. Are you ready?

You should now consider these new disclosure requirements and prepare your approach to compliance. 

Which retailers will be subject to the requirements?

A retailer is required to comply with the reporting requirements if it:

  • Is incorporated or a partnership
  • “‘Carries on a business, or part of a business” in the UK
  • Has total annual global turnover – or the turnover of its parent and subsidiaries – is £36m or more
  • Supplies goods or services

Retailers with subsidiaries in the UK will need to consider whether the act applies to subsidiaries or also the parent company. Retailers that supply goods or services to UK-based customers, but have no office or employees in the UK, also need to consider the application of the act. 

What to include in the statement?

If subject to the regulations, the obligation to publish an anti-slavery statement is mandatory. The content of this statement is not mandatory but the act says this may include:

  • Business structure, including supply chains
  • Policies in relation to slavery and human trafficking
  • Due-diligence processes in relation to slavery and human trafficking in its business and supply chains
  • The parts of its business and supply chains at risk of slavery and human trafficking, and steps taken to assess and manage that risk
  • Its effectiveness in ensuring that slavery and human trafficking is not taking place in its business and supply chains
  • The training about slavery and human trafficking available to its staff.

Approval and publication

A corporate retailer must have its anti-slavery statement approved by the board, and be signed by a director. If it is a partnership, then it must be approved by the partners or members.

The anti-slavery statement must be prominent on the retailer’s website and must be provided within 30 days of receiving a request to see it.

Surprisingly, the obligation to produce a statement is enforcable by an injunction, but there are no criminal or financial penalties for non-compliance. However, there is a risk of reputational damage.

Practical steps

Retailers should consider the following:

  • Allocating senior personnel responsible for compliance
  • Considering statement content
  • Implementing policies to combat slavery and human trafficking, including disciplinary policies as well as codes of ethics and the ability to raise issues through grievance and whistleblowing procedures
  • Updating supply agreements and procurement requirements, setting out the necessary compliance of supplier in meeting its duties
  • Auditing the business and supply chains to assess level of exposure
  • Implementing a training strategy

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