The section 54 of the Modern Slavery Act 2015, also known as the ‘Transparency in Supply Chains clause’ (TISC) came into force in October 2015. It requires to all UK business, including charities, with a minimum annual turnover of £36m to produce a slavery and human trafficking statement for each financial year. In this statement, the organisation needs to disclosure the steps and actions that have been taken to measure the risks of slavery and human trafficking existing within their business operations and supply chain. If they have not taken any action it should be disclosed too. Although the organisations may be willing to report in further detail, the TISC requires information addressing six specific areas:
The structure of the organisation together with the supply chains
The policies managing slavery and human trafficking
The due diligence mechanisms used to identify slavery and human trafficking in the business structure, including supply chains
The identification of risks related to human trafficking and slavery in their business and supply chain together with the actions taken to manage them
The evaluation tools used to measure the effectiveness of their performance
The training about human trafficking and slavery available for their staff
According to EY, a global integrated professional services organisation, it was estimated that over 12,000 businesses should have been called to make public their statement complying with the UK Modern Slavery Act 2015. However, today the Modern Slavery Registry carried out by the Business and Human Rights Resource Centre provides 3,201 statements. Compliance with this requirement is alarmingly low.
So far, the direct consequence of whether complying with this requirement is the promotion of a high or low reputation. In fact, this is a very important factor for consumers and investors. Reports comparing the companies’ performance within sectors are effective mechanisms to persuade companies to a better performance, as they will find themselves being compared with their direct competitors. The CORE coalition launched their report in September 2017 and the Business and Human Rights Resource Centre launched their own report recently.
In general terms, the results are not satisfactory and they prove that there is still a long way to go. However, the UK Government plays a key role to enforce companies with their duties in the breakdown of information.