The UK government continues to prioritise combatting modern slavery risks while also extending reporting deadlines amid the COVID-19 pandemic.
By Clare Nida
On 20 April 2020, the UK government published guidance for companies on how to approach their Modern Slavery Act statements during the COVID-19 pandemic. The government has stressed that businesses should continue to identify and address risks of modern slavery in their operations and supply chains; however, businesses can delay publishing their statements by up to six months without penalty, if necessary, because of the pandemic. The government also provided recommended mitigation measures for areas of increased modern slavery risk.
Section 54 Modern Slavery Act 2015
Under section 54 of the Modern Slavery Act 2015, certain businesses are required to publish an annual Modern Slavery Act statement, setting out the steps they have taken to identify and address their modern slavery risks.
The supply chain provisions apply to commercial organisations, which are defined as a body corporate or partnership (wherever incorporated or formed) that conducts a business (including a trade or profession), or part of a business, in any part of the UK, and which also:
- Supply goods and services
- Have a total annual turnover of £36 million or more (the turnover figure is calculated by taking into account the turnover of the organisation and its subsidiary undertakings)
- The statement does not need to follow a prescribed form, but the suggested content includes describing:
- The organisation’s structure, its business, and supply chains
- Policies and staff training relating to slavery and human trafficking
- Due diligence processes relating to slavery and human trafficking in the company’s business and supply chains
- The parts of its business and supply chains that are at risk of having slavery and human trafficking occur, as well as the steps taken to assess and manage that risk
- The organisation’s effectiveness in ensuring that slavery and human trafficking are not occurring in its business or supply chains, measured against identifiable performance indicators
Additional information about the Modern Slavery Act’s transparency reporting provisions is available in this prior Latham Client Alert.
Under the new guidance, businesses can delay publishing their Modern Slavery Act statements by up to six months without penalty, if due to COVID-19 related pressures. However, businesses should state the reason for any delay (for example, if they have reduced staff capacity) in their statements when they are published.
Businesses will still need to report on the actions that they have taken during this period. As a result of the pandemic, they may not be able to meet the goals set in earlier statements and may need to identify and prioritise new or increased risks. Businesses should look to demonstrate how they monitored and addressed these risks in their next statement, while also continually updating their boards of directors on emerging or heightened risks.
The government identified areas in which workers may be more vulnerable to risks of modern slavery due to COVID-19, and outlined the following mitigation measures:
- Health and safety: Businesses should implement relevant local or national government policies throughout the supply chain, including social distancing measures and paying statutory sick pay.
- Supporting suppliers: To avoid workers being unpaid for work completed, businesses should prioritise engagement with suppliers, including paying for orders already in production if possible.
- Grievance procedures: Workers should still be able to access grievance procedures and businesses should ensure that new or adapted procedures are made available if necessary.
- Recruitment: If sectors and businesses have seen an increased demand requiring additional and temporary workers, they should maintain rigorous checks on their supply chains to protect vulnerable works.
Clearly, the UK government continues to consider addressing modern slavery risks as a priority amid the pandemic. Indeed, at the end of March 2020, the government opted to lead by example in the public sector and publish its own modern slavery act statement that assesses the risk of modern slavery across around £50 billion of its annual public spending on goods and services.
Given that many businesses are now re-evaluating their operating models because of COVID-19, they should take such analysis as an opportunity to reassess their supply chains and embed their Modern Slavery Act reporting requirements.