Out-Law News | 31 Jul 2015 | 2:29 pm | 1 min. read
The measure will cover all businesses who do business in the UK and have supply chains elsewhere in the world, UK prime minister David Cameron said.
The statement must describe the steps taken to ensure slavery and human trafficking is not taking place in any of a company's supply chains or their own business – or state that they have taken no steps on this.
Speaking in Vietnam, Cameron said that the "scourge of modern slavery has no place in today’s society and I am proud of all that Britain is doing to wipe it out … But there is still much more to do".
The planned disclosure measure "is one of the first of its kind in the world and it will be a huge step forward, introducing greater accountability on business for the condition of their supply chains," Cameron said.
"While the Prime Minister’s objective is laudable, the challenge for UK businesses will be implementing this across their supply chains, especially for companies at the smaller end of the scale," said compliance expert Chris Hopkins of Pinsent Masons, the law firm behind Out-Law.com. "Having visibility over your supplier’s conduct can be challenging. That can be achieved through contractual mechanisms in new arrangements but robust processes will also be required."
Recent decisions on environmental law, for example, identified a 'medium-sized business' as having turnover between £10 million and £50 million, based on guidelines for the EU, Hopkins said.
The British Retail Consortium welcomed the turnover threshold. The Transparency in the Supply Chain clause is "a crucial first step in enabling business to talk in a sensible way about the. problem", said director Helen Dickinson.
"The decision by the government to set it at £36 million means a good number of British businesses operating in the UK will be required to think about their role in eradicating modern slavery. We've long argued that the greater the number of businesses who are engaged in the conversation around modern slavery the better chance we all stand of tackling it effectively," Dickinson said.
"This announcement today strikes the right balance between requiring enough businesses to produce statements to make the exercise worthwhile while exempting the smallest businesses," she said.
UK’s independent anti-slavery commissioner Kevin Hyland will visit Vietnam later this year to look at what practical support and training the UK can provide, Cameron said.