United Kingdom Enacts Modern Slavery Bill Requiring Transparency in Supply Chains
On March 26, 2015, the Modern Slavery Act 2015 (the Act) received royal assent and on July 29, the Home Office published preliminary guidance regarding the Act. To give companies the opportunity to adjust to the requirements of the Act, the full provisions of the Act won’t commence until October 2015. The Act, like the California Transparency in Supply Chains Act of 2010 (see Taft law update dated April 22, 2015), is landmark legislation that seeks to bring an end to modern slavery. Any business that operates in the UK or supplies to UK customers needs to be aware of new obligations imposed under the Act.
Specifically, the Act includes a transparency in supply chains clause, which places legal obligations on certain commercial organizations operating in the UK to publish an annual “slavery and human trafficking statement” disclosing the affirmative steps a company has taken during that fiscal year to ensure that no slavery or human trafficking has taken place in the company’s business and supply chains. The statement may include information about the organization’s structure, its business and supply chains, policies, due diligence and training in relation to slavery and human trafficking, as well as its effectiveness in ensuring neither slavery nor human trafficking is taking place in its business and supply chains. Under the Act, a company can also choose to issue a statement saying that it has done nothing, and does nothing, with respect to human trafficking or slavery.
This reporting obligation applies to any commercial organization that supplies goods or services and has a minimum total turnover of £36 million (approximately $56 million). It is important to note that the Act applies to any company (listed or private) that carries on a business or part of a business in any part of the UK, including any foreign business. The obligation applies to suppliers of goods or services. The Act is not limited to manufacturers and retailers or to any particular sector of business.
The disclosures required by the Act must be posted on a company’s website. If the company does not have a website, the required disclosures must be provided to any person requesting such disclosures in writing within 30 days of the request. The Act does not contain punitive provisions. The available remedy includes the Secretary of State bringing civil proceedings in the High Court for an injunction, if in the UK, or for specific performance of a statutory duty, if in Scotland, to ensure compliance. Nevertheless, it is critical that disclosures be accurate to avoid liability for false advertising or similar claims.
If your company is subject to the Act, or if your company does business with companies subject to the Act, we may be able to assist you in analyzing whether you are subject to the Act and/or how to comply with the Act.
For more detailed information or to address a specific question regarding the Modern Slavery Act, please contact one of the Taft professionals listed here.
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