Business Law & Compliance

Modern Slavery Act: Why you need to take action now

5 min read

21 October 2015

As the Modern Slavery Act 2015 comes into effect, what actions do businesses need to take?

There’s been a lot of talk about modern slavery recently, and it’s in large part because the new Modern Slavery Act 2015 came into effect earlier this month. 

The Act essentially calls for corporations to be more transparent in what actions they’re taking to ensure their business and supply chains are slavery free.

It doesn’t affect all companies. Under the Act, only businesses with an annual global turnover of £36m or more need to publish a statement on their website of how they’re preventing labour exploitation, but failure to do so could lead to some hefty fines and a possible injunction.

Not only this, but the press will be eager to scrutinise those big corporations which fail to publish a statement, or those which do but have weak statements that are misleading or ambiguous. 

What should businesses do?

Don’t panic. If you already have a review and inspection strategy in place to ensure your supply chains are above board and don’t pose a risk to you, all you have to do is be transparent about this to the public and publish it on your website each financial year.

If you don’t, or you don’t think you do enough to ensure your supply chain is slavery free, then you don’t necessarily have to up your efforts (though you should). The Act just obliges companies to state what actions they take, so you could essentially publish a statement to say you take little or no action, but of course, your customers and investors won’t be all that pleased to read this.

Having to publicise what actions they take to make sure their organisation is completely free of labour exploitation might make companies think twice about the effort they make to do this, that’s certainly the aim of the Act anyway. 

So, you need to get to work straight away on drafting a statement for your website. This statement has to be prominently linked to from your website’s homepage, too. 

It’s been advised that companies take legal and PR advice on getting the statement just right, as mentioned previously, the press will be keen to scour statements for any wrongful wording or missing information and ‘out’ those companies which have seemingly immoral ethics. 

This statement needs to be approved by the board of directors and signed by a director, then you need to publish it on your website. You need to do this each financial year, too. 

Read on to discover what risks you incur by not taking action…

What’s the risk of not complying?

Companies which don’t publish a statement at all on their website will be at risk of a possible injunction or unlimited fines. Additionally, companies which don’t comply with the Act are putting their reputation at serious risk.

This Act follows a number of highly-publicised incidents where high-street and consumer brands were exposed as having exploited labour. 

Most notably, ever since 2008, low-cost clothing brand Primark has come under fire for using child or forced labour to create its garments. 

Primark was forced to defend its ethics and even shut down a number of overseas factories, amidst pressure from the press, public and human rights organisations. 

To this day, Primark is still battling with its ethical reputation, with new claims of forced labour being publicised nearly every year. The high-street brand has had to create an “Ethics” section on its website, even including a “Does Primark use child labour?” page, most likely in correlation with the amount of people searching for this question online. 

The pressure and scrutiny Primark has faced from human rights organisations in particular, has forced the company to implement a rigorous review and inspection strategy of all of its suppliers, and publish details of this on its websites.

Publishing this statement does pose a reputation risk to organisations, but the bigger risk is the actual processes the organisation has in place to prevent slave labour. 

Ultimately, if your organisation has strong ethics and prioritises risk evaluation highly, you don’t have to worry. If you don’t, you might want to make some big changes, quickly. 

Felicity Crouch is a manager for Igniyte.