LEXIS PSL MODERN SLAVERY ACT 2015 SAMPLE CHECKLIST Expertise Experience Modern Slavery Act 2015 Awareness Sample Checklist
INTRODUCTION Section 54 of the Modern Slavery Act 2015 ("MSA") introduces a requirement for certain commercial organisations operating in the UK to produce an annual transparency statement which sets out the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains or any part of its business. This could include information about its structure, policies, due diligence, assessment and management of risk, training and effectiveness in ensuring its supply chain is free from modern slavery and human trafficking. S.54 applies to all commercial organisations: which carry out any or part of a business in the UK; which supply goods or services; have an annual turnover exceeding 36 million. These checklists are intended to assist in enabling such organisations to: identify whether Section 54 of the MSA will apply to any part of their business; and consider what policies, practices and procedures an organisation may want to address and report on when producing an annual slavery and human trafficking statement.
CHECKLIST 1: STRUCTURE AND TURNOVER A commercial organisation only falls within the scope of Section 54 of the MSA if it: (a) carries out any or part of a business in the UK; (b) supplies goods or services; and (c) has a total turnover of 36 million (as set out in the Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015). Guidance states that a business will be regarded as carrying on a business or part of a business in the United Kingdom by applying a "common sense approach" this is something an organisation will need to consider on an individual basis. Therefore in order to determine whether it is subject to this requirement, the organisation should consider the following: Question 1 Which group member is being considered for the purposes of Section 54 of the MSA? 2 Does the organisation have a demonstrable business presence in the UK? 3 Does the organisation engage in commercial activities in the UK, regardless of the purpose for which profits are made? 4 Is the turnover of the organisation, including its subsidiary undertakings, above 36 million? 5 Is the turnover derived from the supply of goods and services? 6 Have trade discounts, VAT and any other taxes been deducted from the income derived from the supply of goods and services? 7 Is the organisation part of a group and if so will a statement be made by the parent company, or both? 8 Will any subsidiary company meet the turnover threshold itself and need to make its own slavery and human trafficking statement?
CHECKLIST 2: SUPPLY CHAINS RELATIONSHIPS AND ACTIVITIES Once an organisation has determined whether it is subject to the requirement to produce an annual slavery/anti-trafficking statement, the next step is to identify its supply chain and the relationships it has with the other entities involved. This will then determine the nature of the information it may want to include in its annual statement describing its business structure: The types of things to consider include: Relationships and Activities 1 How is the organisation's supply chain structured? Consider any activities that involve: Subcontracting Outsourcing Procurement of goods or services The source of any raw materials used to create the good or provide the services Agency Franchising Distribution 2 What is the organisation's relationship with its suppliers: Short term? Long-term partnership? Seasonal? 3 What countries does the organisation source goods and services from?
CHECKLIST 3: POLICY An organisation's corporate social responsibility programme may already contain anti-slavery and human trafficking policies. If it does, this policy should be assessed in order to understand the actions being taken to prevent slavery and human trafficking in its business and supply chains. If it does not, then the organisation may want to consider whether to implement such a policy and reference this in its annual statement. There is no requirement to have a standalone policy on tackling modern slavery. It could simply be adapting, and/or clarifying how existing policies and practices, programmes and management systems already work on remediation of modern slavery and forced labour from a different perspective such as human rights, ethical trade, CSR (Corporate Social Responsibility), responsible sourcing, and/or sustainability, etc. The organisation may want to consider: Policy 1 Is there an existing policy on slavery and human trafficking? What other policies does the organisation have in place? 2 Is the entire organisation obliged to comply with the policy? 3 Are suppliers required to comply with the policy? 4 Who in the organisation is responsible for monitoring compliance with any policy on slavery and human trafficking? 5 How are breaches of the policy dealt with? 6 Is there a penalty for breaching the policy? 7 Are whistle blowers protected? 8 Is there a mechanism by which the policy is integrated into all business and contractual processes? 9 How was the policy developed?
CHECKLIST 4: DUE DILIGENCE AND RISK MANAGEMENT The organisation should have due diligence processes in place which enable it to identify and assess risks in relation to slavery and human trafficking. Particular risks or factors that could be considered include: Due Diligence Country risks - exposure may be greater in global supply chains in regions/countries where protection against breaches of human rights are more limited. 1 What regions does the organisation do business in? 2 Do any specific countries present a particular risk? 3 Where are products/services sourced from? Sector risks there are different risks and levels of risk in different sectors. 4 What sectors is the organisation operating in? 5 Is the sector at risk of forced labour, slavery and/or human trafficking? Transaction risks other organisations which may not have any direct links to modern slavery may still need to assess the risk of facilitating transactions for clients where this may be an issue e.g. banks and financial institutions. 6 What level of due diligence is carried out into clients' transactions? 7 What is the organisation's involvement in the proposed transaction? Business partnership risks different supplier relationships and business partnerships will all carry different levels of risks. 8 For each region/country in which the business operates, the identity of any: Suppliers Subcontractors Agents Distributors Franchisees 9 What is the nature of the relationship? Long term or short term? 10 Are suppliers made aware of the organisation's policies on modern slavery or CSR etc.? 11 Which relationships are critical to the business of the organisation?
Due Diligence 12 Who is responsible for managing each relationship? 13 How frequently and by what process are all business relationships reviewed? 14 What procedure is followed if the organisation discovers that a supplier is involved in slavery or human trafficking? 15 Does the organisation audit its suppliers? If so, are audits internal or external? 16 Does the organisation consult any external third parties to carry out anti-slavery checks on specific suppliers, or in relation to specific supply chains?
CHECKLIST 5: Effectiveness and KPIs How far has the organisation succeeded in ensuring it is not involved in slavery or human trafficking? Organisations should assess their effectiveness in preventing slavery and human trafficking from occurring in their business and supply chains. Adequate reporting systems and performance indicators will assist an organisation in making such an assessment. The organisation should consider: Effectiveness and KPIs 1 Any reports which seek to identify: the risk of modern slavery and human trafficking in the business how successful any actions taken by the organisation have been in combatting slavery and human trafficking from within 2 How often reports are made 3 Whether the reports produced are adequate in analysing all potential areas of risk 4 How frequently the organisation: analyses its reports updates reports to identify new risks 5 Does the organisation have any KPIs used to measure and analyse the risk of modern slavery and human trafficking occurring in its supply chain? 6 Does the organisation set targets for many staff they will aim to train about modern slavery issues, and the management of risk? 7 To what extent can the organisation audit its suppliers and monitor working conditions? How is this rated? 8 What are the consequences of any supplier's failure to meet desired standards in relation to modern slavery KPIs? 9 Are suppliers required to self-report on any identified risks or concerns? 10 How often are supplier audits carried out? How are internal/external audits measured, and any issues remedied? 11 How often are third party organisations consulted with to check if a particular supplier/supply chain presents a slavery/trafficking risk?
Effectiveness and KPIs 12 Does the organisation carry out any benchmarking to analyse its approach managing modern slavery risks against the market?
CHECKLIST 6: Training Implementing an organisation's anti-slavery and human trafficking policy will require effective training programmes. This type of training will often be delivered as part of the induction process for new employees, along with any regular corporate and social responsibility training. Where necessary, training should be translated into other languages. A clear audit trail of training being delivered should be kept centrally. The organisation should look into the following: Training 1 All types of training it offers to its staff 2 Is training aligned to the business' stance on slavery and human trafficking? 3 Is training updated each time new risks are reported or policy is altered? 4 If necessary, whether or not the training is available in different languages 5 Is there an audit trail which records the training which has taken place?
CHECKLIST 7: Additional Action Assessing an organisation's success in keeping slavery and human trafficking away from its businesses and supply chains should reveal any additional actions to improve its performance. These could be, for example: Action 1 Whether sufficient resource is allocated to monitor and enforce the organisation's policy on slavery and human trafficking, in its business or supply chains 2 Supporting an organisation dedicated to eradicating slavery and human trafficking 3 Additional protections for whistle blowers 4 Additional, repeated or updated training 5 Further policies to be implemented