New reporting requirements for Modern Slavery
The Compliance People Consultant, Dave Almond provides an update on Modern Slavery following the recent announcement from the UK government. A separate article on modern slavery earlier this year from Dave assessed the potential changes for businesses in the future.
In September 2020, Safeguarding Minister, Victoria Atkins, announced powerful new measures to strengthen the landmark Modern Slavery Act 2015 and ensure that large businesses and public bodies tackle modern slavery risks in supply chains. In its response to a consultation on clarity in supply chains, the UK government proposed new measures to hold businesses and public bodies to account in tackling modern slavery in the UK. There are a number of significant changes likely to impact across business sectors and supply chains.
£36 million reporting threshold for commercial and public bodies
Commercial organisations which turnover £36 million per year are already required under Section 54 of the Modern Slavery Act 2015 to prepare a “slavery and human trafficking statement”. The big change is that these will now be joined by public bodies exceeding a £36 million budget threshold. This will mean public sector modern slavery statements will have to be signed off by the accounting officer, chief executive or equivalent role, and approved by the senior management body.
New reporting requirements and enforcement
The current system has faced criticism as organisations could effectively put out a statement which contained no evidence that anything was being done to examine the risks of modern slavery in that organisation and/or what steps they were taking to control the risks.
To improve clarity and enable scrutiny, the government has announced changes which mean it will be mandatory to include information on:
- the organisation’s structure, its business and its supply chains;
- its policies in relation to slavery and human trafficking;
- its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
- the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
- its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate; and
- the training and capacity building about slavery and human trafficking available to its staff.
Bodies will in future have to publish their modern slavery statements annually on a new digital government reporting service by 30th September each year. Legislation will also include the requirement to include the date when the Board approval and director sign off occurred, together with the business entities included. The government also announced that a single enforcement body is to be developed, and there will be civil penalties for non-compliance.
While many of these measures will need changes in the law (and at this point all the government is saying is that the Home Office intends to introduce this when parliamentary time allows), the government will to provide guidance on how organisations can prepare for the new reporting requirements. This includes publishing updated transparency in supply chains guidance.
The Home Office is also developing a new government-run reporting service which, once launched, all organisations will be encouraged to publish their statements on before the law changes and it becomes mandatory.
While many organisations and businesses will fall below the reporting threshold, there is likely to be increased scrutiny on suppliers in future, so now is definitely a good time for you to start assessing the risks associated with modern slavery in your own business. Our consultants can help if you need support on this topic.