The use and demonstration of ethical supply chain and employment practices is an important consideration for the modern business, providing evidence that it is being run in a fair manner.
With this in mind, larger businesses (companies/partnerships/sole traders) must act in accordance with the provisions of Modern Slavery Act 2015. Introduced with the intention of preventing forced and child labour within supply chains, the act makes larger businesses more accountable for the actions of their suppliers in preventing this from occurring. The act applies to businesses which meet the following requirements:
- Are based inside or outside the UK and carry on business within it
- Have a turnover of more than £36 million
- Have a financial year ending on or after 31 March 2016.
Transparency in supply chains
Amongst the many provisions of the act, s54, transparency in supply chains, is most relevant to the area of procurement and general quality management.
The slavery and human trafficking statement
As of 1 April, if your company meets the requirements, you must now produce a slavery and human trafficking statement for each financial year. This should detail the actions you are taking to ensure that slavery is not taking place within either your business or within your supply chain, and should include the following:
- Information on the business and its supply chains
- Details of existing policies and procedures on slavery and human trafficking
- Areas of the business and supply chain where there are risks of slavery and human trafficking and what you are doing to assess and manage these risks
- Evidence of the effectiveness of these actions
- Relevant training and instruction provided to staff.
In line with best practice, the statement should be approved and signed by a senior member of the business (for example, a director) and there must be a link to the statement on your website. By complying with these obligations, your business can provide reassurance to assessors and prospective clients, as well as maintaining your ongoing legal compliance.
Practical tips for businesses
To maintain ongoing compliance with the requirements of the act, you should consider the following points:
- Review and update your risk profile, particularly areas of the business and the supply chain that may be most susceptible to modern slavery, including geographical areas and product sectors
- Consider appointing an external auditor who will assess the business and its supply chain impartially, providing independent analysis of existing strengths and weaknesses and where improvements can be made
- Review and update specific staff training to ensure all relevant staff within the business are aware of their own responsibilities and how the business maintains legal compliance, particularly buyers or senior management figures
- Assess the ongoing suitability of relevant policies and procedures and amend where necessary to ensure an effective response to any potential issue that may arise
- Appoint a dedicated compliance officer to monitor and enforce policies and procedures, ensuring the policies and procedures are disseminated, understood and applied correctly
- Review all existing suppliers and their policies and procedures, ensuring they are taking proactive actions to monitor their own business and supply chains, including regular audits
- Work closely with suppliers to identify and resolve any potential issues regarding slavery and human trafficking.
Adhering to the Modern Slavery Act 2015 can convince both assessors and clients of your business’s commitment to addressing this problem and to observing ethical working practices.
If your firm falls under the £36 million turnover threshold, the act should not be ignored. There are simple steps you can take to ensure it is not, such as immigration checks, site inspections, ensuring all workers receive the minimum wage and reviewing contracts so that they comply with the Act.