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Modern slavery in the contemporary world of business

By Laura Oliver

Modern Slavery is a term used to describe two offences: slavery, servitude and forced or compulsory labour; and human trafficking. According to the International Labour Organisation, there are 40.3 million victims of Modern Slavery today meaning that more than 1 in 200 of the World’s population is affected. Of these victims, 71% are women and girls and 25% are children. The majority of these incidents take place in the private economy.

Against this backdrop, in 2015, the UK Modern Slavery Act (UKMSA) was introduced requiring companies over a certain size which do business in the UK to publish annual statements setting out the steps which they have taken to ensure that Modern Slavery is not occurring in their supply chain or business. This obligation overlaps with legislation elsewhere, including in California, the Netherlands, and Australia.

More specifically, these businesses are required to publish a modern slavery statement as soon as possible (and within a maximum of six months) at the end of their financial year. This statement needs to be signed by a company director and approved by the board. This anti-slavery statement should be published on the company’s website, with a “prominent” link to the relevant page displayed on the corporate homepage; and outline all the steps taken by the company to prevent offences listed under the Act from taking place in the company and supply chain.

If an organization fails to meet the requirements the government can seek an injunction compelling compliance. Failure to adhere to this injunction is punishable by an unlimited fine. This has never happened.

However, this could be about to change. In October 2018, the government wrote to 17,000 businesses who they threatened to “name and shame” as being in breach of the law. The government also commissioned a report on how to ensure compliance and drive up the quality of the modern slavery statements.

This report noted that a lack of enforcement and penalties, as well as confusion surrounding reporting obligations have led to poor quality statements and low levels of compliance. The report urges the government “to take tougher action to ensure companies take seriously their responsibilities to eradicate modern slavery from their supply chains.” Businesses should prepare for changes in this area.

Globally, the UN Guiding Principles set out the expectation that companies avoid infringing human rights, including those related to Modern Slavery, and address any adverse impacts with which they are involved, whether this is in their own operations or through their business relationships, including direct and indirect suppliers.

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