On July 1, 2015, the new Modern Slavery Act came into force in the UK. It is one of the toughest laws in the world that tackles the brutal crime of slavery.
Section 54 of the Act requires every organization with a total global annual turnover of £36 million ($48 million) that carries out some business in the UK to produce a slavery and human trafficking statement for each financial year.
The statement must contain details of the steps that the organization has taken in that year to identify and eradicate modern slavery from both its own business and its supply chain.
Independent research conducted by VinciWorks, a compliance training provider, has found that only 8 percent of the FTSE 500 have complied with the Act and published slavery and human trafficking statements so far.
The requirement for organisations to publish a statement commenced on October 29, 2015. However the government provided a grace period for businesses with a financial year-end date between October 29,
and March 30, 2016.
It seems that many companies are waiting for the last minute to publish their guidance. The provision only begins to become mandatory in September this year, and even then, only for organizations with a financial year ending March 31.
This cautious wait-and-see approach by most firms creates a unique opportunity for early movers to differentiate themselves as leaders in corporate responsibility.
In the words of Home Secretary (now PM) Theresa May:
The transparency measure will increase competition to drive up standards. More workers will be protected and consumers will have greater confidence in the goods and services they buy.
The government guidance goes on to enumerate the many benefits of a well written modern slavery statement, including: enhanced reputation and expanded customer-base. As more consumers seek out higher ethical standards, a robust modern slavery initiative could emerge as a competitive advantage.
Recent analysis by the CORE Coalition reveals that a majority of statements published to date do not comply with the Act’s mandatory requirements.
Furthermore only 13 percent of the statements reviewed covered all six of the suggested areas in the government’s guidance including a key requirement to list training available to staff.
If your organization conducts any of its business in the UK, you should be taking immediate steps to comply with the Modern Slavery Act.
Yehuda Solomont is the Director of Marketing at VinciWorks. The firm provides compliance training to over 40,000 solicitors. VinciWorks released a free guide to compliance with the Modern slavery Act and a new online course. To learn more please visit www.vinciworks.com/modernslavery.