What is modern slavery?
Modern slavery is an umbrella term for all forms of slavery, servitude, forced or compulsory labour, and human trafficking. The Modern Slavery Act 2015 (the MSA) combats modern slavery in the UK and consolidates previous offences relating to trafficking and slavery.
What is a modern slavery statement?
A Modern slavery statement (MSS) details what steps a business has taken to ensure that its business and supply chains are slavery-free during a given financial year. Businesses should publish their MSSs as soon as possible after their financial year ends and, in any event, within six months of the end of the financial year.
Who has to publish a modern slavery statement?
A business is required to publish an annual MSS if it:
is a body corporate (such as a private limited company) or a partnership, wherever it is incorporated or formed
carries on a business, or part of a business, in the UK
supplies goods or services, and
has an annual turnover of at least £36 million (this includes the individual business' turnover and the turnover of any of its subsidiaries)
While smaller businesses (ie those with a turnover below £36 million) are not required to publish an annual statement, they can publish a voluntary MSS. Smaller businesses may, for example, be asked by those they are supplying goods or services to if they have a statement or policy setting out their approach to tackling modern slavery. This is particularly important if they are bidding for contracts with larger organisations that are above the annual turnover threshold of £36 million.
Another example of a business that wishes to publish an MSS could be a charity engaged in collecting old clothing for recycling. The charity’s MSS may clarify its position and commitment to good working practices and will communicate these to the public.
Businesses are responsible for determining whether they need to comply with the MSA and publish an MSS. If you are unsure if the MSA applies to you, you can Ask a lawyer for help.
For more information, read the Government’s guidance.
What does a modern slavery statement need to include?
A MSS is not expected to provide a guarantee that your business and its supply chains are all slavery-free. Rather, it must set out the steps your business has taken during the last financial year to tackle risks related to modern slavery (or, if you havent’ taken any steps, your MSS must communicate this).
It is recommended that a MSS covers the following 6 key areas:
your organisation’s structure and its supply chains
any policies you have in place related to slavery and human trafficking
due diligence processes (the processes you use to monitor and control risks of modern slavery)
risk assessments and management
key performance indicators your business uses to measure the effectiveness of steps taken to tackle modern slavery risks
training that you provide staff related to modern slavery
How to evaluate the risks your business may face
Your organisation should consider the products and services that you use, including the organisations (ie suppliers) who provide them. To help you carry out effective risk assessments and appropriately review possible risks, you should also identify and set out relevant information from internal and external sources (for example, your existing policies or your suppliers’ own modern slavery reports).
Particular risks to consider when assessing and managing risks include:
country risks (ie risks which are particularly prevalent or significant in certain countries) - this is particularly important for businesses with global supply chains which have components in countries where protection against breaches of human rights is limited. This lack of protection could, for example, relate to the rights of foreign contract workers (eg to retain their IDs and papers)
sector risks – there are different risks and levels of risk in different sectors (eg recruitment businesses that recruit staff in the agriculture or manufacturing sectors operate in a high-risk environment, while a recruitment business that recruits office workers and administrative staff operates in a low-risk environment)
financial transaction risks – particularly for banks or financial institutions, which may be involved in facilitating financing from, or supporting cases of, modern slavery in operations, supply chains or through money laundering
business partnership risks – different business partnerships and supplier relationships will carry different levels of risks (eg existing long-term business partnerships may involve less risk than new partnerships, as organisations may have a greater understanding of each other’s operations and policies)
product or raw material risk - different risks and levels of risk are associated with certain products and raw materials. The processes and supply chains for certain products, for example, cocoa and cotton, are more susceptible to slavery and human trafficking
Information on supply chains
Under the MSA, businesses are required to provide information on their supply chains. This helps businesses to prevent modern slavery from occurring in their supply chains.
All businesses, regardless of the size, should be open and transparent about their policies and procedures regarding modern slavery and human trafficking. They should demonstrate that their measures are consistent and proportionate and that they take into account organisations’ size, structure, location of activities and supply chains and the nature of their business.
To evaluate their supply chains, businesses should:
research and identify which risks exist where they have operations or supply chain (eg where their suppliers operate)
prioritise those risks (ie decide which need to be addressed most urgently)
assess the level of importance of risks
ensure that appropriate remedies are in place (ie make plans to mitigate or eliminate risks)
For more information, read the Government’s guidance.
What are the due diligence requirements?
Businesses must set out the due diligence processes that they use to monitor and reduce the risk of slavery and human trafficking occurring in their supply chains.
Your business’ due diligence procedures will depend on your relationships with your supply chains. Depending on the complexity of a relationship, you may find it helpful to investigate working conditions with support from independent experts.
Due diligence processes should be:
proportionate to the identified modern slavery risk, the severity of the risk, and level of influence the business has
informed by any broader risk assessments that have been conducted
Information that should be considered as part of your due diligence includes:
actions taken to understand the operations of the business
details of the business’ risk management processes
any impact assessments that have been carried out
action plans to address actual or potential instances of modern slavery and the priority of those
grievance mechanisms in place to address modern slavery within the business
actions within the organisation that address human rights and work towards zero-tolerance of modern slavery
Due diligence guidance is available on the Government’s website.
Do I need to provide training to my employees?
Businesses are not required to provide training on modern slavery to staff. However, doing so demonstrates that you are committed to tackling slavery and human trafficking in your business and supply chains.
Training can be targeted at different groups of staff, such as the leadership team. You can also target different businesses within your supply chains. Training can range from detailed training courses to broader awareness-raising programmes.
In deciding what training (if any) is appropriate, you should consider and evaluate your business’ size, type, and the perceived level of modern slavery risks that you’ve identified.
The Home Office provides training materials and information that you can use.
How should I publish the statement?
Your MSS must be published on your business’ website with a link in a visible place on the website homepage or drop-down menu. This is done to maintain transparency with website visitors (eg consumers or clients).
The link to the MSS should be clearly marked - it is typically sufficient to link to a ‘Modern Slavery Act Transparency Statement’.
Where your business has more than one relevant website, you should link to or place a copy of the statement on each website.
If you do not have a website, then you must send a copy of the statement to anyone who requests one in writing. The copy must be provided within 30 days of receiving the request.
Does a MSS need to be approved?
Modern slavery statements require approval by the board of directors (or equivalent management body). If you are a company, the board of directors needs to provide this approval. If you are an LLP or partnership, the partnership members need to provide approval.
The MSS must clearly state that it has been approved by the board of directors (for companies), the members (for LLPs) or partners (for general partnership). It must also include the date on which approval was given.
The MSS must also be signed off by either a director (for companies), a designated member (for LLPs) or a general partner (for general partnerships). If the organisation is any other kind of partnership, a partner must sign it.
While the MSS does not need to include a physical signature, it should still clearly state that it has been signed. The MSS should also include the signing party’s name and job title, and the date of signature.
Do I have to register my statement?
The government launched the modern slavery statement registry in 2021. While it is not currently mandatory for businesses to register their statements, they are strongly encouraged to submit their most recently published MSS to demonstrate the steps they have taken to prevent modern slavery. This can be done online.
In future, all organisations required to produce an MSS will need to submit their most recent statement to the modern slavery statement registry.
What are the requirements for overseas businesses operating in the UK?
This will generally depend on the business itself. If the business has a demonstrable business presence in the UK and meets the required criteria, then an annual MSS will need to be published in accordance with the UK government guidelines.
Businesses may qualify as having a demonstrable presence in the UK if their UK presence:
is registered at UK Companies House
has offices in the UK
provides services or support functions in the UK
receives income in the UK, or
has a visible UK business presence in another way, eg a website
Large corporate groups within which multiple entities (eg subsidiaries) meet the requirements for needing to provide a report may create a single group statement. However, they must ensure that their statement:
clearly identifies each entity covered by the statement
covers the steps followed to prevent modern slavery in each of the organisations covered in the report, and their supply chains
is published on all of the organisations’ UK websites
Upcoming changes to modern slavery statements and prevention
In response to a Government consultation, the Government proposed various changes to and extensions of the modern slavery statement requirements. These are largely aimed at encouraging greater transparency.
The proposed changes include, but are not limited to:
making the recommended 6 areas for a MSS to cover compulsory
introducing a single reporting deadline (eg all businesses would be reporting on the same 12-month period, from April to April, and would be publishing their statements by 30 September each year)
These changes have not yet been introduced in law. It is yet to be seen how they may be introduced.
As of June 2022, a Modern Slavery (Amendment) Bill is also progressing through Parliament. If successfully passed, it will (depending on amendments) introduce:
a criminal offence related to failing to produce a genuine MSS
a criminal offence related to continued sourcing from businesses in supply chains that have been issued formal warnings from the Independent Anti-slavery Commissioner for failling to meet MSS transparency standards
enhanced transparency requirements