What does introduction of section 54 of the Modern Slavery Act mean for your business?

The detail of the statement will differ from business to business but consideration must be given to what policies and procedures it has in place, for example, whistleblowing, grievance procedures, bribery policy, ethical trading policies. 

Businesses should also detail who is responsible for reviewing all the policies and procedures and how frequently it takes place to ensure they remain up-to-date and relevant; what training is provided or undertaken for the workforce; how the company will treat breaches of their policies; what terms are required to be inserted into contracts with suppliers e.g. do you require suppliers to comply with the Act, do you audit suppliers to ensure their compliance, do you require any specific certifications are held by suppliers designed to give comfort; do you have a zero tolerance approach to any breach of these requirements?

Whilst the statement is a legal requirement for many businesses, voluntary compliance could be a wise step for unaffected companies: best practice would dictate that consideration of these issues and any extra layer of due diligence on companies you conduct business with is both beneficial and ethical. What’s more, as this issue is being brought to the forefront, should you find out through other means that a business in your supply chain has not taken steps to eradicate slavery, it could be detrimental for your business from a reputational point of view, regardless of how far removed your business may be.

As the first statements are starting to appear on various companies’ websites, this will start to be seen as an ethical stamp of approval for businesses, highlighting values. In the short-term, it will help with procurement processes and people policy. In time, however, it is thought it will drive up employment standards and help the government tackle this growing problem and transform into an expected minimum standard for businesses across the board.

The following checklist is designed to help businesses who are producing a first statement.

  • Who is making the statement?
  • Has the turnover threshold been reached?
  • What is the business operating model?
  • Have we identified the whole supply chain?
  • Are there any particular issues with suppliers, trade unionsor other bodies representing workers that should bedisclosed?
  • What wider policies are in place (e.g. anti-slavery & humantrafficking policy, whistleblowing)?
  • Who within the management team has responsibility forensuring compliance?
  • What due diligence of supply chains will be carried out?
  • Is there evidence of stakeholder engagement?
  • Are actions taken to embed respect for human rights andzero tolerance of modern slavery throughout theorganisation?
  • How is risk monitored and evaluated?
  • Are impact assessments undertaken?
  • Are there any geographical risks?
  • Sector risks?
  • Business partnership risks?
  • What training is available?
  • How are problems dealt with?
Simon Whitehead is a partner at HRC Law.

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