Unlocking the 2015 Modern Slavery Act: Essential Legal Duties for UK Businesses

The Modern Slavery Act 2015 is a landmark legislation designed to combat modern slavery, human trafficking, and forced labor in the UK and beyond. This act imposes significant legal duties on UK businesses, particularly those with substantial annual turnovers. Here’s a comprehensive guide to help you understand and comply with the act.

What is the Modern Slavery Act 2015?

The Modern Slavery Act 2015 is a consolidated piece of legislation aimed at eradicating modern slavery, which includes human trafficking, forced labor, and child labor. Globally, it is estimated that around 25 million people are victims of these practices, with approximately 46 million people affected across 167 countries[1].

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This act applies to UK companies and their subsidiaries with an annual turnover of £36 million or more, impacting over 12,000 companies in the UK. It also extends to international commercial organizations conducting business in the UK, regardless of their place of formation, if they meet the turnover threshold[1].

Key Requirements for Businesses

Transparency in Supply Chains

One of the core requirements of the Modern Slavery Act is the transparency in supply chains. Under Section 54 of the act, commercial organizations must publish a Modern Slavery Statement annually. This statement must include several key elements:

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Description of the Organization’s Structure and Business: Details about the company’s structure, its business, and its supply chains.
Policies on Slavery and Human Trafficking: Information about the company’s policies in relation to slavery and human trafficking.
Due Diligence Processes: Description of the due diligence processes in place to identify and mitigate risks of slavery and human trafficking in the business and supply chains.
Risk Assessment: Identification of parts of the business and supply chains where there is a risk of slavery and human trafficking, and the steps taken to assess and manage that risk.
Effectiveness of Actions: Measurement of the effectiveness of actions taken to ensure that slavery and human trafficking are not taking place, using appropriate performance indicators.
Staff Training: Details about the training available to staff on slavery and human trafficking[2][3].

Here is a detailed bullet point list of what a Modern Slavery Statement should cover:

Organizational Structure: Describe the company’s structure, its business, and its supply chains.
Policies: Outline the company’s policies in relation to slavery and human trafficking.
Due Diligence: Explain the due diligence processes in place to identify and mitigate risks.
Risk Assessment: Identify areas of risk and the steps taken to manage them.
Effectiveness: Measure the effectiveness of actions against performance indicators.
Staff Training: Detail the training provided to staff on modern slavery and human trafficking.
Supply Chain Management: Describe how the company manages its supply chains to prevent modern slavery.

Publication and Reporting

Companies must publish their Modern Slavery Statements within six months of the end of their financial year. These statements can be published on the company’s website or through the UK government’s modern slavery and human trafficking statement registry portal. While publication is mandatory for companies with a turnover of £36 million or more, other businesses can also choose to publish such statements voluntarily[3].

Ensuring Compliance

Conducting Due Diligence

Due diligence is a critical aspect of compliance with the Modern Slavery Act. Companies must conduct thorough risk assessments across their operations and supply chains to identify potential areas where modern slavery might be taking place. Here are some steps to ensure effective due diligence:

Risk Identification: Identify areas in the supply chain where there is a high risk of modern slavery.
Supplier Engagement: Engage with suppliers to understand their practices and ensure they comply with anti-slavery policies.
Audits and Inspections: Conduct regular audits and inspections to monitor compliance.
Training and Awareness: Provide training to staff, particularly those in procurement and supply chain management, to recognize and report signs of modern slavery[3].

Implementing Anti-Slavery Policies

Having a robust anti-slavery policy is essential for compliance. Here are some key elements to include in such a policy:

Clear Commitment: A clear commitment from the company to eliminate modern slavery from its business and supply chains.
Risk Assessment Procedures: Procedures for conducting risk assessments and identifying potential areas of modern slavery.
Supplier Code of Conduct: A code of conduct for suppliers that includes anti-slavery provisions.
Reporting Mechanisms: Mechanisms for employees and suppliers to report any suspected cases of modern slavery.
Training Programs: Training programs for staff to raise awareness about modern slavery and how to identify it[3].

Enforcement and Penalties

Current Enforcement Mechanisms

Currently, the Modern Slavery Act does not impose direct penalties for non-compliance, except for the power of the Home Secretary to seek an injunction to require companies to comply with the transparency requirements. However, this power has not been used to date due to costs and complexities in determining compliance[2].

Proposed Changes

There are ongoing discussions and recommendations to strengthen enforcement mechanisms. The UK Government has indicated that it will consider introducing proportionate sanctions for non-compliance, including potential director liability and civil penalties. The government is also working to update the statutory guidance to help companies produce high-quality Modern Slavery Statements and to develop a public-facing dashboard to provide additional data on these statements[2].

Practical Insights and Actionable Advice

Steps to Eliminate Modern Slavery

Here are some practical steps businesses can take to eliminate modern slavery from their operations and supply chains:

Conduct Thorough Risk Assessments: Regularly assess your supply chains to identify areas of high risk.
Engage with Suppliers: Work closely with suppliers to ensure they adhere to anti-slavery policies.
Provide Training: Offer comprehensive training to staff on recognizing and reporting modern slavery.
Implement Reporting Mechanisms: Establish clear reporting mechanisms for suspected cases of modern slavery.
Publish Transparent Statements: Ensure that your Modern Slavery Statements are detailed and transparent, covering all required areas[3].

Example of Good Practice

Companies like Oxford Global Resources have set a good example by including detailed policies in their Modern Slavery Statements. For instance, they specify that they do not engage in any form of human trafficking, use forced labor, or destroy, conceal, or deny access to employees’ identity documents. They also ensure that their recruiters comply with local labor laws and do not charge recruitment fees to employees[5].

Table: Comparison of Current and Proposed Requirements

Requirement	Current	Proposed
Publication of Modern Slavery Statements	Voluntary registry, must be published within 6 months of financial year-end	Mandatory registry, standardized guidance, and public-facing dashboard[2]
Content of Statements	Must include due diligence processes, risk assessments, effectiveness of actions, and staff training	Must include a description of how the organization has assessed the effectiveness of its actions, standardized and accessible guidance[2]
Enforcement Mechanisms	Home Secretary can seek an injunction for non-compliance	Introduction of proportionate sanctions, potential director liability, and civil penalties[2]
Supply Chain Transparency	Companies must report on their supply chains	Enhanced transparency requirements, including import bans and due diligence obligations beyond current transparency requirements[2]

Quotes and Insights from Experts

“The Modern Slavery Act ensures that companies are diligent in their duties to eliminate modern slavery from their business operations and their supply chains,” notes CJ Law, emphasizing the importance of due diligence and transparency[1].
“The Report concludes that the lack of mandated content makes it difficult for companies to be held accountable for their transparency,” highlights a report on the need for standardized guidance and improved enforcement mechanisms[2].

The Modern Slavery Act 2015 is a significant piece of legislation that requires UK businesses to take proactive steps to eliminate modern slavery from their operations and supply chains. By understanding the key requirements, conducting thorough due diligence, implementing robust anti-slavery policies, and ensuring transparency in reporting, businesses can not only comply with the law but also contribute to a global effort to eradicate this egregious human rights violation.

In the words of a legal expert, “Compliance with the Modern Slavery Act is not just a legal obligation; it is a moral imperative. Businesses have a critical role in ensuring that their supply chains are free from the scourge of modern slavery.”[3]

By taking these steps, businesses can protect human rights, enhance their reputation, and contribute to a more ethical and sustainable business environment.