Five tips to prepare for an updated UK Modern Slavery Act

Following a consultation with businesses, civil society and others, the UK Government has announced some changes to the 2015 Modern Slavery Act. Here are our top tips to help your business get ahead of the new requirements, before they become law.

In September 2020 the UK Government announced that a number of changes would be made to the UK’s Modern Slavery Act – particularly to Section 54, which focuses on business requirements. The Government is yet to confirm when the changes will come into effect, though we expect them to be made by the end of 2021.

The changes to the Act are not set in stone, but the Government has proposed:

• An annual deadline of 30 September for all organisations to submit their modern slavery statements, and that statements must be published on the UK Government’s online registry
• Potential civil or financial penalties for organisations who do not comply with the Act, on top of existing penalties for organisations and individuals found to be engaging in modern slavery or forced labour
• A requirement for public sector organisations in the UK, such as state hospitals, universities and government departments, to produce modern slavery statements
• Mandatory topic areas for statements, including organisational structure, supply chain, and due diligence processes. Learn more about what areas businesses may need to include in their statements.

The existing Modern Slavery Act requirements allow companies to take little or no action to address modern slavery. The changes aim to drive companies to act, and report on their activity in more detail in their annual statements.

Watch our webinar: what is modern slavery, and how can it affect your business?

To get ahead of these changes, Sedex has five top tips to help you prepare.

1. Take action – the new requirements are here to stay and your responsibility is growing.

Since the UK Modern Slavery Act was introduced in 2015, thousands of organisations have taken strong action against modern slavery. However, many more have taken limited action, or are not even complying with the law.

The strengthening of this law and the rise of similar laws in other countries (such as Australia and The Netherlands) show that businesses’ responsibility to tackle modern slavery will only grow. Now is the time now to define your approach to address the risk of modern slavery.

If you already have an approach, spend time reviewing this and its effectiveness. Identify the changes you will need to make to keep your business compliant with the updated UK Act. If your business doesn’t yet have a modern slavery approach, learning about your obligations and allocating resources to get an approach in place is crucial.

Learn more about complying with the UK Modern Slavery Act.

2. Avoid making any assumptions – all suppliers need a risk assessment.

Many organisations assume that because their supply base is in countries perceived as “low risk”, such as the UK or USA, modern slavery is not a risk for their organisation or supply chain. However, all countries have their own risks of modern slavery – and need to be assessed and monitored as carefully as “high-risk” nations.

The more detailed your risk assessment, the better. Including supplier-specific data – such as self-reported information, or audit findings – will help your tailor your actions further. Learn more about supplier risk assessment.

3. Engage your employees.

Employee support is crucial when addressing modern slavery. From keeping an eye out for warning signs at work sites to identifying and managing ethical risks in their roles, employees are often the first line of defence against modern slavery in your organisation and supply chain.

The updated Modern Slavery Act is likely to require information on training given to employees on modern slavery, so getting ahead of the game and educating your organisation is crucial. Our introduction to forced labour – the most prevalent form of modern slavery – is a good educational resource that can support training.

4. Set realistic goals.

While the UK Act is becoming stricter, it does not assume that all organisations will become experts at handling modern slavery overnight. Under the current law, organisations are encouraged to report on what actions they will take in the next reporting period. You can set goals that span several years and commit to activities each year that help your organisation progress towards them.

Your goals should consider what your organisation already does and how to integrate a new or improved approach to address modern slavery. Set realistic yet aspirational goals, and put in place robust processes with clear responsibilities and performance targets. Make sure you can gather data together in order to analyse it, to track your organisation’s progress against these targets.

5. Check your timelines.

At present, a modern slavery statement is due within six months of a company’s financial year end. The updated Act will most likely require statements by 30 September each year for all organisations, regardless of their financial calendar.

While there is likely to be a long lead time for organisations to prepare their first statement to meet this deadline, it is important to plan ahead. Use this time to make sure your action plans, roadmaps, resources and activities are all aligned to meet the deadline.

Key activities include:

• Making a realistic assessment of timelines and the actions you need to take
• Assessing your available resources and internal capabilities, in case you need to hire new people, upskill existing employees or get external support to meet the requirements.

Does the UK Act apply to my business?

It’s important to remember that the law is extra-territorial and can apply to companies based outside of the UK. If your organisation is outside of the UK but provides goods or services in the UK, you may have to comply with the law (either the whole organisation or parts of it, such as subsidiaries) or face potential penalties for non-compliance.

If you provide a UK government or public organisation with goods or services, you may be included in their own modern slavery due diligence approach. You may be required to answer questions on your own approach and supply chain to remain a preferred supplier.

Sedex offers consulting to help you comply with modern slavery laws, including the updated UK Act. This support is tailored to your business’s needs – get in touch to find out more.