Consultation on Modern Slavery Act
In the last days of the coalition Government the Modern Slavery Bill became law. As I reported in my blog, at the time, the Government was consulting on the reporting requirements for businesses in relation to the Transparency in Supply Chain clause. The key issue being at what size of company will these requirements kick-in. Yesterday saw the publication of the Government’s response to those submissions they received.
The TUC made a submission in its own right and as part of the Ethical Trading Initiative (ETI). Given that the TUC’s totally reflected that agreed through the ETI this may seem unnecessary duplication. However, in these processes Governments compiles their statistics on the basis of the number of responses supporting a particular option. Be you the TUC representing just under 6 million workers or an individual, each submission is given the same weighting!
The good news is that the Government has accepted that the lowest of its suggested thresholds should apply. Therefore any company with more than a turnover of £36 million will be covered by the reporting clause. The term, covered by rather than bound by, has been carefully chosen. As noted in my blog, referred to above, no legal sanctions have been put in place for those companies who do not meet the reporting requirements. The Government hopes good will and fear of reputational damage will be sufficient to make companies comply. This is deeply unfortunate if not indeed naïve.
Within the TUC and the ETI there was a clear desire to ensure that the transparency clause should apply to as many companies as possible. Additionally, the TUC was concerned that the figure of £60 million should not be adopted. A figure aligned to the California Act which sets a figure of $100 million for its threshold. This was not just because it was higher but because it might set an international standard which would not only bind our hands but colleagues in other countries. The TUC and many other members of the ETI wish to see the £36 million threshold reduced over time.
Certainly there is still more work to be done on the Act. The coalition Government was committed to producing clear guidelines for business, detailing the reporting requirements. These should at least include the steps they are taking to assess and manage the risks of modern slavery in their supply chains. We would also expect to see information on their organisational structure, policies and staff training on the issue. The TUC will work with others to ensure that this actually happens and will try to influence them in such a way as to give the greatest protection to workers.