Modern slavery and human trafficking are a pervasive problem, orchestrated by sophisticated criminal organisations.

The Modern Slavery Act not only introduces specific criminal offences for those who commit these crimes but also enrols the private sector in the battle against modern slavery and human trafficking.

Section 54 of the Act requires that a corporate entity operating in the UK, supplying either goods or services of any kind, and with a global turnover of at least £36 million, should provide an annual slavery and human trafficking statement which should outline how it is, or is attempting to, eliminate modern slavery and human trafficking from its business.

Some UK charities may meet these requirements. Others may consider that voluntary compliance with the requirements may be useful, for funding applications or for reputational reasons.

What goes into a statement?

There is no specified form or length to the statement and so organisations can make them as extensive or as brief as is appropriate.

Although there isn't a legal requirement to do so the Act suggests that the following topics should be covered:

  • how is the organisation structured, what are its business and supply chains?
  • does the organisation have policies on slavery and human trafficking and what are the outcomes of those policies?
  • due diligence. What are the organisation's due diligence processes in relation to slavery and human trafficking in its business and supply chains?
  • identifying the parts of the business and supply chains where there is a risk that slavery and human trafficking may exist
  • key performance indicators (KPIs.) Creating appropriate KPIs to assess how effective the organisation has been in ensuring that there is no slavery or human trafficking in its business and supply chains
  • demonstrating what training regarding slavery and human trafficking is available to staff

While the form of the statement is not prescribed, including these points demonstrates that organisations are serious about tackling the issue. Examples of good and poor practice will vary according to an organisation's size and structure. Key actions will generally include incorporation of modern slavery considerations into existing policies on procurement, whistle-blowing and recruitment and also into employee codes of conduct. Staff training and awareness events on the subject, as well as consulting with internal and external stakeholders in order to develop effective policies, are also considered to be good practice.

Regardless of the content and length of the statement the statement is subject to further legal requirements:

  • the statement should be approved by senior management, such as the board, and signed by a director or an equivalent
  • the statement must be published on the organisation's website and located in a prominent place on the website
  • if the organisation does not have a website to speak of, a copy of the statement must be made available to anyone who makes a written request within 30 days of receiving it
  • statements must be produced as soon as reasonably practicable after the end of each financial year or six months after

Challenges for a smaller organisation

Analysing the risks in supply chains or business practices will require investigation that could take up significant amounts of time and resources particularly for smaller charities who might voluntarily choose to comply. If that is the case, the statement should be clear about what limitations the organisation faces and how they plan to overcome these.

Risks and benefits

For those organisations that do meet the threshold, the Secretary of State can bring civil proceedings for a failure to produce a statement, and there may of course also be reputational issues arising from a failure to do so.

The fact that larger organisations are required to comply may also mean that they in turn scrutinise partner organisations as part of their own compliance procedures.

It may therefore be beneficial for smaller organisations to voluntarily produce a statement to strengthen their profile as an attractive partner for potential investment, joint projects, sponsorships and grants, particularly as we are now increasingly seeing a requirement to demonstrate compliance with the Act and general good practice in this area as a routine feature of funding applications.

Given the potential time and cost burden of training staff, auditing processes etc, it is useful for smaller organisations that there is not a prescribed form of statement, and that they can therefore develop a statement that abides by the spirit of the legislation within the confines of what may be achievable within the context of their resources.