Large retailers must prepare to publish first Modern Slavery Act compliance statement, says expert

The 2015 Modern Slavery Act requires all "commercial organisations" with a turnover or group turnover of £36 million or more which are either incorporated in the UK or carry on a business in the UK to publish an annual anti-slavery statement. This must be available in a prominent place on the company's website, and must be provided within 30 days of receiving a request to see it.

A retailer will be required to comply with the reporting requirements if it:

• is incorporated or a partnership;
• carries on "a business, or part of a business" in the UK;
• has global turnover of, or the turnover of parent and subsidiaries is, £36m or more per annum;
• supplies goods or services.

Retailers with subsidiaries in the UK will need to consider whether the reporting requirements in the Act apply just to the subsidiaries, or also to the parent company. Retailers supplying goods or services to UK-based customers but which have no office or employees in the UK will also need to consider the application of the Act to their businesses.

What to include in the statement

If a retailer falls within the scope of the Act, the obligation to publish an anti-slavery statement is mandatory. However, the content of the statement is not mandatory.

The Act provides some helpful suggestions of issues that firms may wish to address in their statements:

• business structure, including supply chains;
• policies in relation to slavery and human trafficking;
• due diligence processes in relation to slavery and human trafficking within the business, and in its supply chains;
• the parts of the business and supply chains at particular risk of slavery and human trafficking, and the steps taken by the firm to assess and manage that risk;
• the firm's effectiveness in ensuring that slavery and human trafficking is not taking place in its business and supply chains;
• details of the training about slavery and human trafficking available to the firm's staff.

Approval and publication

A retailer that is a body corporate must have its anti-slavery statement approved by the board, and signed by a director. If it is a partnership, the statement must be approved by the partners or members.

Surprisingly, the obligation to produce a statement is enforced by an injunction, but carries no criminal or financial penalties for non-compliance. However, retailers that do not comply with their obligations run the risk of reputational damage.

Next steps

For most large retailers, management and oversight of international supply chains will be the most difficult part of the new requirements. However, there are some practical steps that they can consider:

• appointing a senior individual responsible for compliance;
• considering the content of the statement;
• implementing policies to combat slavery and human trafficking, including disciplinary policies as well as codes of ethics;
• reviewing the ability of staff and suppliers to raise issues through grievance and whistleblowing procedures;
• updating supply agreements and procurement requirements to set out the minimum standards required of suppliers;
• auditing the business and its supply chains to assess level of exposure;
• implementing a training strategy.

Paul Gillen is a retail employment law expert at Pinsent Masons, the law firm behind Out-Law.com.