Modern Slavery – February Update
The Modern Slavery Act ("the MSA") is an evolving piece of legislation. In an attempt to develop the legislation, the UK Government announced an independent review of the MSA. The members of the review have now published their second interim report which addresses the issue of transparency in supply chains.
The report makes a number of recommendations which the Government should consider in an attempt to reduce the 'ambiguity' of the act and enhance enforcement.
The final report is due to be published in March 2019 however, in the meantime, we have summarised the recommendations the report makes below which may be applicable or helpful for your business. This may give you more clarity on what to expect in the future in relation to your business' modern slavery obligations.
If you are unsure whether this guidance note will be applicable to your business please click here.
Recommendation 1 – Clarifying the companies in scope
- The Government should establish an internal list of companies who fall within scope of section 54 and check-in with companies on whether they are covered by the legislation (please note that individual companies should remain responsible for determining whether they need to produce a slavery and human trafficking statement ("MSA Statement")).
Recommendation 2 – Improving the quality of statements
- The Government should strengthen the wording of the legislation to change voluntary obligations on companies to mandatory obligations. If the company does not report on mandatory elements, they should explain why not. The MSA should also require companies to consider the entirety of their supply chains and if they have not, to explain why not.
- Companies should not only report on what they have done to date but they should take a futuristic approach to MSA Statements.
- The Government should enhance statutory guidance on what should be included in MSA Statements.
Recommendation 3 – Embedding modern slavery reporting into business culture
- The Companies Act 2006 should be amended to include a requirement for companies to refer to their MSA Statement in their annual report.
- The MSA should impose a duty on non-listed companies that meet the £36m threshold but who are not captured by the Companies Act 2006 reporting requirements.
- Businesses should have a designated board member responsible for the MSA Statement.
- Failure to meet reporting requirements or to act accordingly in situations where modern slavery has occurred should be an offence under the Company Directors Disqualification Act 1986.
Recommendation 4 – Increasing Transparency
- A central governmental run database should be created where companies are obliged to upload their MSA Statements. This database should be easily accessible to the public.
Recommendation 5 – Monitoring and enforcing compliance
- An Independent Anti-Slavery Commissioner and enforcement body should be assigned to monitor compliance and enforce sanctions.
- The Government should adopt a steady approach with enforcement beginning with initial warnings and fines (as a percentage of turnover), with court summons and directors disqualifications being introduced gradually.
Recommendation 6 – Government and the public sector
- Section 54 should be extended to the public sector.
- The Government should strengthen its public procurement processes to make sure that companies that are not compliant under section 54 of the MSA are not eligible for public contracts.
- The Crown Commercial Service should keep a database of public contractors and details of compliance checks and due diligence. The database should be easily accessible to public authorities to use during the procurement.
For more information in relation to this topic, please contact Gareth Walls, Emmie Ellison or a member of the Employment & Incentives Belfast team at ALG.
Date published: 8 February 2019