Modern Slavery - Having an effect for SMEs

Contrary to expectations, SMEs are finding that they are affected by the Modern Slavery (Transparency in Supply Chain) provisions because they are required to give assurances to those they supply that they comply with the Modern Slavery Act 2015.

Under the Modern Slavery Act 2015, commercial organisations who supply goods or services and have a turnover of £36 million or above must publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organization and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries.

Transitional provisions provide that organisations with a financial year-end from 29 October 2015 up to and including 30 March 2016 will not be required to make a slavery and human trafficking statement for the financial year 2015/16. Organisations with a financial year-end of 31 March 2016 will be required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year-end.

Why does the Modern Slavery Act 2015 affect SMEs regardless of their turnover? SMEs are affected because they form part of the supply chain of larger companies who are caught by the provisions and are required to publish their own statements.

Tender documentation now routinely includes questions about Modern Slavery Act compliance and associated policies irrespective of the turnover of the company being invited to tender. Similarly, when new contracts are being entered into/contracts are being renewed, anti-slavery clauses are being included as part of Modern Slavery Act 2015 compliance.  In the same way that it is now customary for such questions to be made regarding the Bribery Act, SMEs must be able to point to relevant policies and procedures if they want to win the tender and/or be awarded the contract and continue doing business with the larger company.  They risk losing business if they are unable to do so.

Posted on 02/28/2016 by Ortolan

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