Modern Slavery Statements: Businesses could do better!

The Modern Slavery Act 2015 (the 2015 Act) is currently under review – this is the statute which makes it a criminal offence for organisations to be involved in “modern slavery practices” i.e. slavery, servitude, forced or compulsory labour and human trafficking. Importantly, the 2015 Act also requires businesses with an annual turnover of £36 million or above to publish a Slavery and Human Trafficking Statement on an annual basis.

This review was commissioned by the Government in July 2018, in order to determine the best way forward in terms of improving the quality of Modern Slavery Statements submitted by larger businesses. The Second Interim Report was released at the end of January 2019.

The consequences of non-compliance with modern slavery legislation can be particularly damaging for businesses and may lead to reputational damage and subsequent loss of future business and, therefore, it is crucial that your business is compliant.

What does the review suggest?

In short, Modern Slavery statements submitted by businesses are of poor quality and there is generally a low level of compliance with modern slavery legislation. This is perhaps unsurprising given the inadequate enforcement of the legislation by the authorities and uncertainty regarding the exact requirements of the obligation to submit Modern Slavery statements.

The review makes various suggestions for reform of the law, including the following:

  • businesses will be required to name a board member who is personally responsible for producing the organisations’s Modern Slavery statement. If this board member fails to comply, this will constitute an offence under the Company Directors Disqualification Act 1986
  • businesses will be required to refer to its Modern Slavery statement in its annual reports
  • introducing a gradual approach to enforcement e.g. beginning with initial warnings and then increasing to fines, and ultimately directors’ disqualification if businesses fail to react to warnings
  • no longer permitting companies to simply state that they have not taken any steps to address slavery and trafficking (as is currently allowed under the legislation).
What happens next?

The recommendations in the report are just that, recommendations. The full review of the Modern Slavery Act is scheduled to be released next month and at that point we will know more as to the planned reforms to the law.

It certainly seems as if enforcement is on the rise, with it being reported that the Crown Prosecution Service in England has increased the number of charges it brought against businesses in relation modern slavery legislation breaches by 27% in the past year.

Don’t get caught out! MacRoberts offers e-learning packages which can assist your organisation in ensuring that it is compliant with the legislation and avoids any action in relation to modern slavery offences.

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