U.K. Modern Slavery Act: an opportunity for companies to better understand their supply chain
Section 54 of the U.K. Modern Slavery Act “Transparency in Supply Chains Provisions” requires companies with more than GBP 36 million turnover doing business in the U.K., regardless of where they are based, to publish an annual statement setting out the steps taken to prevent slavery in their businesses and supply chains in the U.K. and overseas.
Companies affected by the Act are now challenged to undertake the new task of producing a statement (and not hurting their reputation by stating they are doing nothing). They have now to scrutinise their supply chains and investigate potential breach of human right. For some businesses, this will be the first time they consider such issues. Statements published so far have immediately undergone scrutiny by Trade Unions and NGOs. Feedback calls for more meaningful and transparent statements in the future, but still consider companies proactively coming forward as an encouraging result.
A number of regulations have followed the Act with the clear goal of strengthening the country’s efforts to fight modern slavery. Under the new Immigration Act (May 2016) came a new director of Labour Market Enforcement, who will be responsible for bringing together three of the U.K.’s main labour inspection authorities. The director and this group will have powers to routinely share data and intelligence, with the goal to uncover patterns and identify human rights violations throughout the country. One of the three authorities, the Gangmasters and Labour Abuse Authority, will have broader power to address modern slavery offences. Also, labour market enforcement bodies will be able to apply to a court for enforcing orders toward businesses that are believed to be committing labour market offences – and breach of such orders would be a criminal offence.
The aim of these provisions is clear: the Government wants to make it easier for law enforcement to be able to deal with employers who subjugate their workers into slavery. In June, for the first time, the High Court ruled that a British company sourcing poultry to leading supermarkets will have to compensate workers employed under slavery-like conditions. This game-changing ruling is one more example of why companies should take the Modern Slavery Act and the new U.K. regulations as a challenging invitation to investigate their business and assess potential risks, rather than as just a pure compliance exercise. Read more on the topic here.