Following Anti-Slavery Day 2018 the UK government has renewed its efforts to eradicate modern slavery and to better enforce the Modern Slavery Act 2015. We recommend that large charities take the opportunity to consider the existing anti-slavery legislation, how they can ensure compliance going ahead, and how they can commit more generally to guarding against slavery in their supply chains.
Section 54 of the Modern Slavery Act 2015 requires all bodies corporate that supply goods or services, carry on any part of their business in the UK and have a consolidated global turnover of £36 million per annum or more, to prepare a slavery and human trafficking statement for each financial year. This statement must then set out the steps the organisation has taken to ensure that there is no slavery or human trafficking in its business and supply chain and ‘may’ include further information listed in s 54(5) or provided elsewhere in the government’s guidance.
In October 2018 the Government provided an update on the success of the Modern Slavery Act as part of its annual report on Modern Slavery in the UK. The Home Office highlighted two problems with compliance in this report - firstly, that a large number of those organisations within the scope of s 54 were not publishing the required statements, and secondly, that those publishing statements were failing to adequately explain the steps being taken or were otherwise ‘poor in quality’.
As a first step to improve compliance the Home Office has therefore written directly to at least 17,000 businesses ‘telling them to open up about modern slavery in their supply chains, or risk being named as in breach of the law’ - either for failing to make statements or to make an adequate statement.
We note that when the ‘MSA’ 2015 came into force a core of larger charities fell squarely into this definition. For others whether they had met the turnover requirement was less clear-cut, although CORE (the 'UK civil society coalition on corporate accountability' and responsibility) encouraged charities to publish a statement regardless in the interests of transparency.
We would recommend those charities who might be considered as within the scope of the Modern Slavery Act to review whether they qualify to make a modern slavery statement and document their reasoning if they conclude they do not. Those who do already publish an annual statement should also review government guidance to ensure their reporting is adequate.
The recent announcements from government do not change the law or update the method for calculating the ‘turnover’ bringing an organisation into the scope of s 54. However the Government’s 2018 report also confirms that it ‘has commissioned an independent review of the Modern Slavery Act 2015 led by Frank Field MP, Maria Miller MP and Baroness Butler-Sloss to identify where the Act is working well and whether specific areas of the Act need to be strengthened. The Review will report in March 2019, and its recommendations will help steer the Government’s future response.’ Therefore further change may well be on the horizon.
Finally, we would stress that all charities should consider the risk of modern slavery in their supply chains, regardless of size, and the reputational impact on them of being seen to profit from unethical working practices.
We have seen in the past month press criticism of a major charity receiving proceeds from the sale of merchandise which was produced abroad in inhumane conditions. For any charity this kind of association could run directly counter to its purposes and/or have a tangible impact on its ability to trade and fundraise.
For this reason all charities should consider the importance of due diligence and due care in dealing with situations where modern slavery might occur. In particular, this should be considered whenever they deal with a 'commercial participator' creating a particular product the sale of which benefits the charity.