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last updated: 15th September 2017

The Modern Slavery Act 2015 is an Act of the Parliament designed to tackle slavery in the UK and consolidates previous offences relating to human trafficking and slavery. The act extends to England and Wales and includes a provision which requires commercial organisations in any sector with a turnover greater than £36m per annum to produce a statement setting out the steps they have taken to ensure there is no modern slavery in their own business or their supply chains.

If an organisation has taken no steps to do this, their statement should say so.

Does the Act apply to my institution?

A ‘commercial organisation’ is defined at section 54(12) as a body corporate or partnership which carries on a business, or part of a business, in the UK wherever that organisation was incorporated or formed. The key concept here is that of an organisation which ‘carries on a business’. The courts will be the final arbiter as to whether an organisation ‘carries on a business’ in the UK taking into account the particular facts in individual cases. However, the following paragraph sets out the Government’s intention as to how this should work.

There are many ways in which a body corporate or a partnership in the UK can pursue business objectives. The Government expects that whether such a body or partnership can be said to be carrying on a business will be answered by applying a common sense approach. So long as the organisation in question is incorporated (by whatever means) or is a partnership, it does not matter if it pursues primarily charitable or educational aims or purely public functions. The organisation will be caught if it engages in commercial activities and has a total turnover of £36m - irrespective of the purpose for which profits are made.

More information on when and how this act applies can be found in Transparency in Supply Chains; A Practical Guide.

When do I need to publish the statement?

Should your institution fall within the above definition you are required to publish a statement to cover the 2015/16 financial year as soon as practicable after your financial year end.  Government guidance encourages organisations to report within six months of their organisation’s financial year end.   The statement must be approved by the Board of Directors (or equivalent) and signed by a Director (or equivalent) and published on your institutions website.

What should we include in the statement?

There is no specific template for the statement but guidance suggests the following for inclusion in the statement:

  1. the organisation’s structure, its business and its supply chains;
  2. its policies in relation to slavery and human trafficking;
  3. the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
  4. its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
  5. the training about slavery and human trafficking available to its staff;
  6. its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate.

 

For further details on the structure of the statement see a template layout of a Modern Slavery Statement and a selection of statements published by colleges to comply with the Act.

What actions might we need to take to produce the statement?

Initially you may wish to brief your institutions senior management team on the requirements of the act and the implications this may have for your institution.  A Briefing Paper on Modern Slavery Act written by a Procurement Manager of a FE College to its senior management team provides an example of what this institution has done to address the requirements of the act.

If your institution does not currently take into account modern slavery and human trafficking considerations when buying goods and services you could consider undertaking the following activities:

Organisation policies

  • Amend your institutions purchasing policy to include modern slavery considerations into supplier selection and purchasing processes
  • Introduce a Supplier Code of Conduct and work with suppliers to ensure that they meet the standards of the code.   Include termination clause in contracts that allow termination for serious violations of the code.
  • Embed modern slavery considerations in any existing whistleblowing policies

 

Assessing and managing risk

  • Conduct a risk analysis on the goods and services your institution purchases to identify those categories where risks of human slavery, trafficking and other forms of exploitation are likely to arise   For example goods produced, processed or transported through countries with a high risk of human exploitation e.g. eastern Asia, Africa etc.  Goods such as plastic items, clothing and textiles, some foods, sports equipment, IT components etc.
  • The Human Trafficking Risk Assessment Template is a useful tool to help you conduct risk analysis. Asking your suppliers to complete this template will help you establish which suppliers are of higher risk.

Due Diligence

  • Where you have identified a suppliers products that are likely to have been produced in countries with a high risk of human exploitation, make enquires about your suppliers supply chain partners business operations and include modern slavery audits into contract management procedures.
  • Take steps to improve substandard suppliers practices by requiring them to implement action plans
  • Include modern slavery considerations in supplier selection processes for relevant higher risk suppliers and services
  • Consider the implications of any new policies on ‘amazon’ type purchases your institution might make.

 

NB: Statutory guidance does state due diligence procedures should be proportionate to:

  • The identified modern slavery risk
  • The severity of the risk
  • The level of influence a business may have
  • Informed by any broader risk assessments that have been conducted

 

Training & Performance Indicators

  • Arrange a briefing event for staff who play a key role in specification writing, procurement and contract management of the goods and services you have identified as higher risk.
  • Consider enrolling key staff on the CIPS Ethical Procurement and Supply e-learning course.
  • Introduce organisation KPIs on modern slavery e.g.
    • Requiring all relevant staff to have completed training by [date]
    • Developing a system for supply chain verification by [date] whereby your institution evaluates potential suppliers before they enter the supply chain
    • Reviewing existing supply chains by [date]

 

What happens if we don’t publish a statement?

If a commercial organisation fails to produce a slavery and human trafficking statement for a particular financial year the Secretary of State may seek an injunction through the High Court (or, in Scotland civil proceedings for specific performance of a statutory duty under section 45 of the Court of Session Act 1988) requiring the organisation to comply. If the organisation fails to comply with the injunction, they will be in contempt of a court order, which is punishable by an unlimited fine.

Government guidance states in practice, failure to comply with the provision will mean the organisation has not produced a statement, published it on their website (where they have one) or has not set out the steps taken by the organisation in the relevant financial year. This can include setting out that it has taken no such steps, or is just beginning investigations. Whilst the guidance encourages clear, detailed and informative statements legal compliance does not turn on how well the statement is written or presented (provided that it sets out the steps taken or that no steps have in fact been taken).

Government guidance states they expect organisations to build on their statements year on year and for the statements to evolve and improve over time. However, a failure to comply with the provision, or a statement that an organisation has taken no steps, may damage the reputation of the organisation. It will be for consumers, investors and Non-Governmental Organisations to engage and/or apply pressure where they believe a organisation has not taken sufficient steps.

Further guidance can be obtained from:

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