The Modern Slavery Act requires some businesses to publish an annual statement detailing the steps taken in combatting modern slavery, human trafficking and child labour within their immediate business and any supply chains.

While the legal duties fall solely upon multi-million pound commercial organisations, SMEs are facing pressure from the larger commercial entities to show that their own business operations and supply chains are devoid of modern slavery.

Slavery, trafficking and child labour is still ever present in the UK and it is estimated that over twenty million people are enslaved worldwide. The recent refugee crisis has fuelled these numbers with vulnerable individuals being exploited along a variety of migration routes towards, and within, Europe.

The intention behind the Government’s policy is to hold larger organisations to a greater degree of accountability and to encourage them to take action against this epidemic at source.

Who is required to comply?
An organisation will be subject to the requirements if:
• it is a company or a partnership;
• it carries on its business, or even part of its business in the UK;
• its business is in the supply of goods or services, and
• its business has an annual turnover of £36 million.

If an organisation is caught under the regime, it is required to produce the annual statement on a prominent place on their website. The Government have published guidance on the content of the statement although in brief, it should detail the organisation’s structure, supply chains, relevant anti-slavery and human trafficking polices, employee training and steps taken in ensuring that slavery, child labour and human trafficking is not occurring.

What about SMEs?
While larger organisations are required to comply directly with the Act, SMEs that form part of the supply chain of these larger organisations are increasingly being asked to give assurances to the larger companies that they also comply with the Act. Without giving these assurances or being aware of the highlighted issues, larger organisations may be unwilling to contract with these SMEs.

In order to protect their business, SMEs can take a number of steps to ensure their business and supply-chains are devoid of slavery, trafficking and child labour, such as:
• reviewing terms and conditions of contracts and introducing new obligations to comply with the new legislation;
• publishing an annual statement outlining steps taken to comply with legislation;
• publishing an anti-slavery and human trafficking policy;
• auditing their supply chains and core business more frequently, and
• ensuring employees are receiving their full employment rights.

The indirect impact of the Act on SMEs suggests that it would be appropriate be for SMEs to publish their own anti-slavery and trafficking policy, review their contracts and publish their own annual statement.