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Articles Food 20th Oct 2015

Food Update: New rules to prevent modern slavery – does it affect you?

Large employers required to publish anti-slavery and human trafficking statements.

Earlier this year there was criticism of Tesco, Walmart and Costco for selling prawns supplied by Thai company CP Foods, who, it was alleged sourced the product from suppliers which used slave labour.

On October 29th 2015 a new requirement, introduced by the Modern Slavery Act 2015, came into force aiming to address exploitation of workers. It applies to businesses with an annual global turnover over £36 million, and requires them to set out the steps they have taken to ensure that slavery and human trafficking is not taking place at any point in their supply chain in a statement.

The Act consolidates existing legislation relating to slavery, forced labour and human trafficking. It puts a huge onus on those with a complex chain of suppliers; particularly where this extends overseas where there is less regulation.

Although the requirement is now  in force the transitional provisions mean that the first businesses who will need to produce a statement are those with a financial year end after 31 March 2016.

Food production and food processing businesses are amongst the sectors considered vulnerable to exploitation due to the use of low paid unskilled labour. Under this new legislation a slavery and human trafficking statement will have to be published for each financial year – or, if no steps have been taken by the business to root out slavery or trafficking in their supply chain, they are required to state this is the case. However such a negative statement may have a reputational impact. The statement will need to be signed off at board level to ensure that those at the very top of the organisation address this issue seriously. There must also be a prominent link to the statement on the organisations website. If the organisation does not have a website it will be required to provide a copy of the statement to anyone who makes a written request within 30 days.

As the £36m threshold applies globally it catches all companies carrying out any part of their business in the UK and is not restricted to companies incorporated in the UK only.

The penalties

Failure to comply with this new requirement may result in civil proceedings in the High Court for an injunction requiring the organisation to comply. But beware; it is possible to commit the offence of human trafficking by ‘aiding and abetting’ – so it is important to ensure your business is not caught out by failing to prevent human trafficking in part of the supply chain.

What you need to do

The reporting requirement is now in force so carrying out due diligence on the businesses in your supply chain should be a critical priority if you haven’t already done so. This needs to assess whether there is a risk that they may be involved in slavery or human trafficking and whether your business could be accused of aiding and abetting them.

To meet the requirements covering transparency in supply chains you will have to address the following areas:

  • Your polices on slavery and human trafficking
  • Your due diligence processes in your business andyour supply chains
  • The parts of your businesses and supply chainswhere there is a risk of slavery and human trafficking taking place – and what steps you take to assess the risks
  • Your group’s effectiveness in ensuring that slaveryand human trafficking is not happening in your business or supply chains
  • The training you give your staff  to enable them to spot any risks to yourbusiness

The Government has produced statutory guidance to help business outlining the information that could be included in the statements and why it is useful in Transparent in Supply Chains etc – A practical guide.

However the Government does expect that the statements prepared by businesses will be relevant and specific to the organisation. Therefore what’s right for your business may not necessarily be the same for others.

If your organisation reaches the £36million threshold and you would like advice on preparing your statement please contact a member of our team as you will need to address these issues carefully.

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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