Supply chains and the challenges of the Modern Slavery Act 2015

At Mazars, we understand that supply chains are often dynamic and complex. Globalisation of both supply and demand, the requirement for greater flexibility and the development of new business models have all contributed to the challenge of managing the supply chain effectively. The introduction of the Modern Slavery Act 2015 may create further challenges by testing the ability of the business to comply with the requirements and for suppliers to provide clear statements of compliance.

Clause 1 of S54 of the Modern Slavery Act 2015 requires all companies within its remit to prepare an annual ‘slavery and human trafficking statement’ which must be approved by the Board of Directors and signed by a Director.  

The statement must disclose the steps the business has taken to ensure that slavery and human trafficking is not taking place anywhere in its supply chain or in any part of its own businesses.

On 29 July 2015, the Government announced that from October it will force companies with a turnover of £36 million or more to publish an annual slavery and human trafficking statement. Given that it also impacts suppliers, many B2B companies may have to demonstrate to their larger business customers that they have processes in place to ensure they have no trafficking.

The Act continues by suggesting further information that the company ‘may include’:

  • its due diligence process in relation to slavery and human trafficking in its business and supply chain, and
  • its effectiveness in ensuring that slavery and human trafficking is not taking place.

To make these statements confidently, Boards will need to be comfortable that they have sufficiently robust management and information systems in place.

Our in-depth expertise has been developed by working with a wide range of companies and their supply chains around the world as well as through our position as one of the lead architects of the United Nations Guiding Principles Reporting Framework. As a result, we are ideally placed to help companies start their journey of understanding how to manage their supply chain risk. We can help companies identify their greatest risks and advise on the most efficient and effective approach to implementing appropriate processes.

If you are interested in finding out more about the implications of the Modern Slavery Act, please contact Richard Karmel, Global Head of Business and Human Rights. 

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