Slavery is not just something you learn about in History. In 2013, 1,746 cases were reported in the UK and it is estimated to affect 29.8 million people worldwide.
When Home Secretary, Theresa May described modern slavery as “a despicable and inhuman crime in which women, men and children are subjected to unimaginable suffering by criminals”.
The Government introduced the Modern Slavery Act 2015 to tackle the issue. It is likely to be a big issue for law firms and their clients in the coming months and years.
The Act tackles the issue in two ways: by consolidating various criminal offences relating to human trafficking and slavery; and by introducing a provision for transparency in supply chains. Starting in October 2015, the Act will require all businesses with an annual turnover of £36m or more who carry on business in the UK to prepare a slavery and human trafficking statement every financial year, stating the steps they have taken to ensure their business and supply chains are slavery free. The statement must be approved by the board and signed by a director, then published on the organisation’s website.
The statement can include information about the organisation’s structure, business and supply chains; its policies in relation to slavery and human trafficking; its due diligence processes around the issue; identification of the areas of particular risk for the business and the steps it has taken to assess and manage that risk; and the training made available to employees.
The £36m threshold will apply to global turnover and is expected to include subsidiaries. The Act will apply to foreign-based companies if they carry on business in the UK.
It will create much work for businesses, who will need to carry out due diligence in relation to their own business and their suppliers, both in the UK and overseas.
Businesses can choose to state that they have taken no steps to investigate their business or their supply chains. They are unlikely to do this, as investors, consumers and pressure groups will subject them to pressure to comply.
The Home Secretary can enforce this duty by applying for an injunction in the High Court. This is an unusual remedy, however – a substantial fine would be more normal – and it is likely that action would only be taken against a high profile organisation, in order to attract publicity and secure wider compliance with the Act.
It is likely that clients will be asking law firms for a considerable amount of assistance around the Act. They will be asked not only to advise on the new requirements, but potentially also to draft a slavery and human trafficking policy, review contracts with suppliers to ensure they have sufficient procedures in place, or review their draft statement. They may also be asked to get involved with training staff – particularly those working in supply chain management and procurement – on slavery and human trafficking and their legal obligations.
Government guidance and draft regulations are expected before October, but law firms are already gearing up for it, with clients asking for advice already.
Karen Plumbley-Jones is an associate at Bond Dickinson