What is the Modern Slavery Act?
The Modern Slavery Act came into force in March 2015. It introduces a number of measures to combat modern slavery. Modern Slavery is defined by the Act as “slavery, servitude, forced and compulsory labour and human trafficking”. The aim of the Act is to ensure that large businesses (that is, businesses with a turnover of £36 Million or more) monitor and control their operations and supply chains to keep them free from workforces comprising of modern slavery.
The Act requires such companies to publish a statement on their website, in every financial year, to disclose the steps they have taken to ensure their business and supply chains are free from slavery.
Will the Act affect SMEs’?
Whilst the Act does not apply to SMEs’, its cascading effects down a supply chain may affect the business practices of SMEs. For example, if you are an SME that supplies large organisations bound by the Act, you will be part of the supply chain that such companies will check, in order to substantiate the claims they make in their annual statements about their suppliers being free of slavery.
Increasingly, large companies are unwilling to do business with SME’s that have non-transparent and opaque supply chains. Accordingly, to maintain your ability to contract with large businesses, or to be able to submit credible bids for business with large companies, it will be beneficial to establish procedures that will enable you to give large companies the assurances they may seek about your compliance with anti-slavery policies, before they permit you to remain within, or become part of their supply chain.
What steps can SMEs take?
Should you be faced with a request for a ‘slavery or trafficking statement’ as part of a bid or tender submission what can you do?
Firstly, remember that such statements are simple data collection exercises that large companies undertake to help them put together their own report for the purposes of the Act. Accordingly any statements you submit might contain:
- information about the structure and supply chain of your organisation;
- any due diligence processes that your company carries out to check the credentials of your suppliers; or
- details of any part of the business or supply chain where there might be a risk of human trafficking or slavery.
If you are not yet in a position to provide such assurances, you should think of reviewing parts of your supply chain which may be most at risk, and ensure appropriate protective measures are in place. Protective measures may include requesting confirmation from your suppliers that their business and supply chains are free from slavery. You could do this by inserting anti-slavery clauses into the agreements you enter into with your suppliers.
In view of the above, whilst your business may not be required by law to submit an annual anti-slavery and trafficking report, being in a position to do so will boost your ability to trade with large organisations.
If you have been asked for a human trafficking statement as part of a tender process and are unsure as to how to respond, or if, as part of your anti-slavery policies you are thinking of inserting anti-slavery clauses in the commercial agreements you have in place with your suppliers, and need some guidance on the drafting of such provisions, our commercial team are experienced in providing such assistance and will be happy to help.