follow us on twitter @elitebizmag find us on facebook connect with us on linkedin 

How will the Modern Slavery Bill affect businesses?

Written by Ryan McChrystal on Friday, 06 February 2015. Posted in Regulation, Legal

The Modern Slavery Bill is a welcome move by all. For UK businesses, it brings additional responsibilities and demands greater transparency of supply chains

How will the Modern Slavery Bill affect businesses?

British slavery was supposedly made history with the Slavery Abolition Act 1833. So why then in November last year did it emerge that between 10,000 and 13,000 victims could be trapped in the UK? These figures were higher than previously feared and their announcement coincided with the passing of the Modern Slavery Bill through the House of Lords. The bill aims to give law enforcement agencies increased powers to tackle offenders, provide harder punishments and better support victims. It is due to become law sometime before the general election in May.

According to John Deane, head of business advisory services at Slater & Gordon UK, the law firm, the bill has implications for businesses. “Human trafficking and the exploitation of vulnerable adults and children is associated with competitive pressures to distribute low-cost goods and service in the UK.” He says the bill creates new criminal offences for those engaging in slavery, servitude, forced labour and human trafficking. "There are stiff sentences including life imprisonment as well as civil law controls aimed at slavery and trafficking prevention." This includes the creation of an Independent Anti-Slavery Commissioner to encourage the prevention of slavery through good practice and the prosecution of offences.

The bill takes a victim-centred approach and will particularly affect those businesses that engage with supply chains. "An offence is committed if someone is held in a position of slavery or servitude or is being required to perform forced or compulsory labour," says Deane. "The assessment of the commission of an offence is far reaching. For example those engaging in labour relationships do not have to know that a person is held in such a position because they ought reasonably to have known the facts. Businesses at the top of supply chains can commit offences because of what happens at the bottom."

Also, if it can be established that recruitment was with a view to a person being exploited and a person in a business either knew or ought to have known that another in their supply chain was likely to exploit a person then an offence may be committed. “Exploitation of a victim under section two can take place anywhere in the world so businesses should be extra cautious,” says Deane.

The main way the bill monitors supply chains is the transparency clauses under section 52. This requires commercial businesses over a certain size to publish an annual report detailing the steps they have taken to ensure that slavery and human trafficking is not taking place within any of their supply chains and also any part of its own business.

The affected business turnover threshold has not yet been set but the requirement is unlikely to apply to small businesses, at least not from the outset. Business that cross the reporting threshold will be required to publish a 'steps taken' report each year either on its website or, if there is no website, in hard copy.

Businesses will have a key responsibility in detecting and reducing the occurrences of slavery through their supply chains and there will be pressure on businesses to cooperate to eradicate slavery. As a minimum, Deane advises businesses to: 

• Ensure that they are fully aware of their reporting obligations under the bill so that they are fully prepared once it is enacted.

• Immediately begin to review supply contracts and the policies and practices of their contractors and sub-contractors in their supply chain, identifying areas for improvement. 

• Look at other protective measures such as the introduction of anti-slavery clauses in to relevant contracts.

• Recognise that the duties upon a business to report are enforceable by the Secretary of State.

• Recognise that inadequate reporting or worse still a failure to report will likely result in significant reputational damage, financial losses and disruption to supply chains.

 

A warm welcome for the Modern Slavery Bill

Ian Baxter, founder and chairman, Baxter Freight

It’s unbelievable that, according to the United Nations, there are more people trapped in slavery today than ever before. The idea that British companies and consumers are in any way connected to this is very worrying. Therefore I warmly welcome the Modern Slavery Bill’s aim to create greater transparency in supply chains and to strengthen enforcement against traffickers.

The transparency element of the legislation will likely focus on larger businesses, perhaps with a turnover of about £60m, so Baxter Freight would not have a specific disclosure requirement for now. However, this legislation will start a conversation among our customers and suppliers and I’ve no doubt we will have to provide information as part of this process. The vast majority of the freight we handle is within the European Union and therefore I’d like to think our own supplier base is very sound but it won’t be long until everybody is asking the question of all their suppliers throughout the world. I hope the line of questioning will be more specific than "do you use slaves?" For example, it is important for British consumers to know that suppliers offer employees a basic level of wages, proper rest breaks and the right of representation in their workplace. If companies don’t dig a bit deeper they will never get to the bottom of whether forced labour is being used. 

A specific issue for logistics is that many trafficked people arrive in the UK having been smuggled on-board vehicles. This is very hard  for transport companies to completely eradicate but trucks coming to the UK from abroad should be able to demonstrate they are part of the Home Office scheme on this topic. This ensures that there are sufficient checks in place to minimise the risk. 

About the Author

Ryan McChrystal

Ryan McChrystal

In a previous life McChrystal wrote about asset management in the Middle East. A history and politics graduate from the north of Ireland, he now focuses his efforts a little closer to home. 

Our Partners

Event Media Partners