Transparency in your supply chains
Impact of the Modern Slavery Act
11 November 2015
© Allen & Overy 2015
Transparency and Modern Slavery
1
The new requirements in context
2
Do you meet the qualifying threshold for publishing a
Statement?
3
When do you need to report?
4
What is modern slavery and human trafficking?
5
Publishing a Statement
6
Due diligence and managing your supply chain risks
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The headlines
New obligation to publish a Statement on human rights in your supply chains
Qualifying criteria
First Statements from April 2016
Risk assessment and due diligence
Wide discretion over content of Statement
Wider offences created under the Act
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The wider shift towards greater corporate
transparency
California TiSC
Act
Reporting on
Payments to
Governments
Shift towards
mandatory
transparency
obligations
Proposed EU
Regulation on
Conflict Minerals
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Non-financial
reporting in
Companies Act
2006
EU Directive on
Non-Financial
Reporting
4
Do you meet the qualifying criteria?
Turnover
Annual turnover of ≥ £36 million
Activity
Providing goods or services
UK Link
Body corporate or partnership wherever incorporated/formed
Carrying on business in the UK
Fact specific
Demonstrable business presence in the UK
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When do you need to report?
If you have a financial year end on or after 31 March 2016, you must publish a statement
under the transparency provision
If you have a financial year end date between 29 October 2015 and 30 March 2016, you
do not have to publish a statement for that financial year
Organisation 1 | Financial year end 31 March
2016
This organisation will be in the first round of
compliance
It must publish a Statement covering its’
2015/2016 financial year
Statement may be limited to only that part of the
financial year in which “steps” were taken
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Organisation 2 | Financial year end 31
December 2015
The transparency provisions do not take effect
for financial years ending before 31 March 2016
This organisation must produce a Statement for
the 1 January 2016 to 31 December 2016
financial year
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Publication “as soon as reasonably practicable” after
financial year end
Guidance
recommends within 6
months of financial
year end
Can also link with
other relevant
reports
Board approval
and director
signature
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Link to prominent
place on
homepage
Publication of
Statement
Consider most
suitable website
if you have
several
May choose to
publish at same
time as annual
report
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What is modern slavery and human trafficking?
Slavery or servitude
Forced or compulsory labour
Holding another person in slavery
or servitude
In such circumstances that person
knows/ought to know
Requiring a person to perform
forced or compulsory labour in
certain circumstances
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Human trafficking with view to
exploitation
Arranging, facilitating travel with
view to exploitation
Recruit, transport, transfer, harbour,
receive, transfer or exchange
control
UK national v. non-UK national
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Publishing the Statement
Content
– Describe all actions taken; can specify that these are initial steps
– Not a guarantee that no slavery/trafficking exists in your supply chains
– Follow suggested headings in guidance
Style
– In English and clear (easy for public to read)
– Strike balance between being informative and too technical
Approach
– Aims to show year on year progress; issues need to be followed through in
subsequent statements
Context
– Consider overlap with other published statements and reports (e.g.
OECD/UNGPs)
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Failure to publish Statement is not an offence under
the Act
Failure to comply with court
injunction to publish
statement
– Secretary of State may apply
for injunction in High Court to
require publication
– Further failure punishable by
an unlimited fine
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2
Failure to publish statement
Failure to report all steps
taken
– Not offences under the
Modern Slavery Act
– However, in practice this is
likely to be the basis for an
injunction requiring
publication
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Risk assessment and due diligence are key
Boundary of organisation and
supply chain
Global risk
assessment
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Due diligence
Sector initiatives?
How far up the chain?
Can you build year
on year?
11
Conclusions
Requirements are far reaching
Voluntary v mandatory nature of reporting
Establishing your scope and boundaries will be key
Must consider the implications in the wider context
This is the beginning
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Contact details
Matthew Townsend
Partner
London
Tel
+00 (0)20 3088 3174
matthew.townsend@allenovery.com
Alana Lampitt
Senior Associate
London
Tel
+44 020 3088 3864
alana.lampitt@allenovery.com
© Allen & Overy 2015
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Transparency in your supply chains
Impact of the Modern Slavery Act
11 November 2015
© Allen & Overy 2015
These are presentation slides only. The information within these slides does not constitute
definitive advice and should not be used as the basis for giving definitive advice without
checking the primary sources.
Allen & Overy means Allen & Overy LLP and/or its affiliated undertakings. The term partner is
used to refer to a member of Allen & Overy LLP or an employee or consultant with equivalent
standing and qualifications or an individual with equivalent status in one of Allen & Overy
LLP's affiliated undertakings.
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