Are you ready for a Modern Slavery Act audit?

Quite possibly, your business’s website carries a Modern Slavery Statement.  For huge numbers of businesses with a turnover of £36m or more, such a statement is a legal requirement. And by now, almost four years after the Modern Slavery Act became law, many of us have become accustomed to seeing such statements.

But compliance with the Act calls for more than just the publication of a statement on a website. And the government is now taking steps to establish whether businesses’ compliance embraces all that it should.

Simply put, it is in the process of writing to 17,000 companies, and telling them that it intends to audit their compliance.  If audited, could your business demonstrate a satisfactory level of compliance?

Here at The Legal Director, we would counsel caution before assuming that the answer is ‘yes’.

Clear requirement

Modern-day slavery remains a modern-day problem. As yet another high-profile prosecution attests, the suspicion remains that many thousands of people—both overseas and in the UK—are appallingly exploited.

Home Office statistics, for example, have estimated that there are between 10,000 and 13,000 victims of modern slavery in the UK, and a further 45 million estimated victims around the world.

And the premise of the Modern Slavery Act 2015 is that significant numbers of those victims could be working in the supply chains of British companies, both here and abroad.

This is why the Modern Slavery Act requires businesses to publish an annual anti-slavery and human trafficking statement, laying out the steps that they are taking to identify and stamp out any abusive labour practices within their supply chains and to seek continuous improvement in their approach. Statements cannot remain frozen in time.

Named and shamed

To carry out its audit, the government has put the work out to tender. So far as we are aware, no decision has yet been taken on awarding the contract, and the precise timing of the audit is still unclear.

Time to relax? We would suggest not. If businesses have not complied with the Act, then they may be ‘named and shamed’, with an obvious risk of reputational damage.  The worst cases of non-compliance could even result in exclusion from public contract work.

So far from relaxing, we would suggest that businesses use the intervening period to ensure that their compliance is water-tight. A suggestion that has been given added impetus by the publication of an official Independent Review of the Act, to which the Government is responding.

Its key recommendations? That businesses should no longer be permitted to report not having taken any steps towards investigating and eliminating modern slavery, and that non-compliance could result in directors being disqualified. Non-compliance is not therefore, in our opinion, a sensible risk decision.

How to prepare

Where to start your audit preparations? Here at The Legal Director, we see a number of obvious points of vulnerability:

  • Businesses that don’t have a Modern Slavery Statement
  • Statements that have not been approved by the board
  • Statements that have not been signed by a director
  • Statements that don’t appear as a prominent link on the website’s home page
  • Statements that have not been updated for each financial year, within six months of the financial year end

At the very least, start there.

But it is also prudent to go further. Businesses may want to be able to demonstrate that they have drafted supply contracts that contain explicit anti-slavery clauses and be able to demonstrate that supplier audits and qualification processes contain anti-slavery provisions.

As ever, we at The Legal Director can help, by providing sensible, business-oriented guidance.

We are used to working with businesses to review their exposure to modern slavery in the supply chain, providing advice on removing or reducing risk, drafting the required statements, and demonstrating year-on-year anti-slavery progress.

So don’t wait to be audited—pick up the phone, or email

Posted Thursday, June 20th, 2019 by Warren Ryland



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