Firms will be required to create policies to deal with a problem that is far from historical, writes Gillian MacLellan
THE rise of African and Middle Eastern immigration into the European Union has become an increasingly high-profile issue for European nations, including the UK. With many migrants putting their lives into the hands of illicit people traffickers when fleeing their home nations, it raises concerns about the potential exploitation of those who are successful in reaching their intended destination.
The report calls for businesses to take more responsibility in stamping out this crime
From October, the Modern Slavery Act 2015 will be introduced as a means of addressing an issue which many believed to be one of a distant past.
The Act follows a requirement for quoted companies to provide information on human rights issues relating to their business which are in line with guiding principles set out by the United Nations. The new UK legislation also stems from a report published by the Centre for Social Justice in 2013 which highlighted the low levels of awareness about the welfare of illegal migrants as well as vulnerable UK citizens who are currently enslaved in “the sex industry, in forced labour and criminality, and behind closed doors as domestic servants”.The report calls for businesses to take more responsibility in stamping out this crime by developing more transparency in their supply chains to ensure they are not unknowingly supporting slave labour.
When it becomes law, the Modern Slavery Act will also require some commercial organisations to publish an annual anti-slavery and human trafficking statement. The companies which will be affected are those deemed as “commercial organisations” with a global turnover above £36 million which do business in the UK so it will impact on a number of firms here in Scotland. Overall, this will apply to a significant number of both domestic and foreign incorporated commercial organisations operating within the UK with over 12,000 British companies likely to be affected.
From October, these organisations will need to either publish a statement of the steps they have taken to ensure slavery and human trafficking is not taking place within their supply chain.
Those businesses choosing to adopt this transparent approach may need to carry out significant auditing of their global supply chains to fulfil this obligation. There is the potential for their HR team to play a key role in introducing policies and practices on the issues involved, as well as implementing training and telephone hotlines.
Alternatively, businesses have the option to do nothing but they must produce a statement which effectively says they have no anti-slavery policy in place; this has real potential to expose them to reputational damage. These statements must be published on a company’s website or, for those without one, they must provide a copy of it within 30 days of receiving a request to do so which can be enforced by the secretary of state. In its response to the consultation on tackling modern slavery, the UK government has said that it will not be prescriptive on the content of these statements and has acknowledged they will vary from business to business.
However, it has suggested the core elements should include key information including an outline of the organisation’s business model, structure and supply chain relationships; its policies relating to modern slavery, including due diligence and auditing processes put in place; details of relevant training available which is provided to members of the organisation; the principal risks related to slavery and human trafficking, including how the organisation evaluates and manages those risks in its business and supply chain and the relevant performance indicators to gauge the organisation’s progress on the above from year to year. The exact extent of the “due diligence” to be undertaken and the level of resources required for an organisation to prepare the statement is currently unclear. However, the government anticipates that statements will reflect the business sector the organisation is in. Preparing the statement may involve HR working with internal stakeholders, such as compliance and legal departments, as well as external parties such as trade unions, to create inclusive due diligence processes and safe reporting mechanisms.
Further government guidance on how commercial organisations can comply with these obligations will be published in October which will cover more details about the information to be included in the statement and when and where it should be published. However, organisations need to begin planning how they are going to respond to this requirement and need to start putting an action plan in place.
• Gillian MacLellan is an employment partner at law firm CMS www.cms-cmck.com