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Easy GuideThe UK Modern Slavery Act: How BSCI Participants Should Respond

Introduced in 2015, the UK Modern Slavery Act (MSA) is designed to prevent modern forms of slavery and protect victims. The Act also includes a number of provisions that aim to demonstrate transparency in global supply chains, such as the drafting of a Slavery and Human Trafficking Statement.

The Statement, referenced in Section 54 of the Act, must contain details of the steps that the organisation has taken to identify and eradicate modern slavery fromboth its own business and its supply chain.

The Business Social Compliance Initiative (BSCI) already has the tools in place to help you draft an accurate Statement and support your broader reporting activities.

We’ve drafted a Statement template for you to follow. It provides clear guidance on how to plan and structure your Slavery and Human Trafficking Statement. As well as this template, which can be found on the FTA Academy, the learning hub of BSCI’s umbrella organisation, the Foreign Trade Association, BSCI also supports with:

• Monitoring and Reporting

• Grievance Mechanisms and Remediation

• Implementing Effective Supply Chain Management Systems

• Training and Capacity Building

This Easy Guide will lead you through the process of the Slavery and Human Trafficking Statement, highlighting its benefits and risks. It also offers a comparison with the California Transparency in Supply Chains Act, a similar piece of legislation for companies carrying out business in the state of California, USA.

Going through this reporting process will help your organisation recognise its contribution to United Nations Sustainable Development Goals such as:

The UK Modern Slavery Act: What You Need to Know

How we can Help Glossary

The Slavery and Human Trafficking StatementThe announcement or report to be issued by relevant commercial organisations under the conditions indicated in the UK Modern Slavery Act Part 6, Section 54;

Modern SlaveryA term that encompasses slavery, servitude, forced or compulsory labour and human trafficking;

Forced or Compulsory Labour Defined as ‘all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily; and

The BSCI Bonded Labour PrincipleA BSCI Code of Conduct principle that states businesses shall not engage in any form of servitude, forced, bonded, indentured, trafficked or non-voluntary labour.

Step 1: Assess if your organisation falls under the UK MSA definitions

Step 2: Decide which Statement your organisation should choose

Actions TakenA statement on actions taken to ensure slavery and human trafficking is not taking place in any part of your business or supply chains;

iIMPORTANT If you are new to the BSCI system (e.g. you have not started developing internal procedures, mapping your supply chain etc.) you may still

opt for a statement of action taken. In which case, you should indicate the concrete actions you plan on taking to ensure slavery and human trafficking does not occur in any part of your own business and its supply chains.

Benefits Risks

Statement of inactionYou are not burdened with detailing

how your company eliminates slavery or human trafficking

Stakeholder, consumer and media pressure could result in negative publicity

Statement of actions taken

You can capitalise on efforts to conduct human rights due diligence in your supply

chains and develop internal policies and procedures

Solid evidence is necessary to avoid a backlash that contradicts your claims

Conducting a quick assessment on the pros and cons can help guide you to the best approach. See below for an example:

Follow these 4 Steps

Structure:Your organisation is defined as a corporate body or partnership, acting independently or as part of a group structure, that ‘carries on a business, or a part of a business, in the United Kingdom. Business includes a trade or a profession.’ More details can be found under UK MSA Part 6 section 54 (12).

Turnover:Your organisation has a total turnover of over £36 million, after the deduction of taxes and trade discounts on the supply of the relevant goods and services. The turnover includes all subsidiaries, including those operating outside of the UK.

Business Scope:Your organisation is a commercial organisation that supplies goods or services.

Geographic Scope:Your organisation carries out business, or parts of business, in any part of the United Kingdom, regardless of the origin of the business.

No Actions TakenA statement indicating your organisation has not taken any such steps.

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Step 3: Use BSCI tools to help you define which areas you need to cover in your statement

ContentThe Statement should be succinct, transparent, and easy to read. Statements can refer to supporting links and should avoid overstating your company’s actions. The Statement must cover your whole financial year. However, your organisation organisation has only recently undertaken any activities, you may choose to produce a statement noting that the activity only relates to part of the financial year.

TimingYour organisation will have to publish the statement no later than six months after the end of its financial year.

Approval and signatureThe statement must be approved by your board of directors (or equivalent management body) and signed by a director (or equivalent), if the organisation is a body other than a limited liability partnership. For other types of organisations, see UK MSA Part 6, 54 (6) b, c, d.

PublicationThe UK MSA sets different criteria for commercial organisations with a website and those without a website.

CycleIt is strongly recommended that once you begin publishing your annual Statement you continue to do so, even if your turnover falls below the minimum threshold of £36 million.

Step 4: Manage the publicationRegardless of whether you have chosen to make a statement on actions taken or not taken, certain criteria need to be respected:

With website:You must publish the Statement and include a link in a prominent place on your organisation’s website.

Without website:You must provide a copy of the Statement to anyone that has made a written request, and must do so within 30 days of the request being received.

2A presentation of your policyRefer to the BSCI Code of Conduct and Terms of Implementation

3Due Diligence and remediationUse data from BSCI Audits and the BSCI Commitment Formula Dashboard

1Organisation and supply chain structureUse data from the BSCI online platform

5Assessment of prevention effectivenessRefer to the BSCI Commitment Formula targets

4Assessment of risksRefer to BSCI Country Risk Classification and BSCI Principles of Responsible Recruitment

If your organisation carries out business in California, you should check if the California Transparency in Supply Chains Act (CTSCA) also applies to you. Below is a comparison of the CTSCA and the UK MSA. BSCI already has the tools in place to provide support and guidance on both acts.

The UK Modern Slavery Act turnover threshold is £36m after tax.

Who is subject to the requirement? Only manufacturers or retailers, as identified on Californian state tax returns, with annual worldwide gross receipts exceeding $100m.

The financial year may refer to a different period than the one covered in your UK MSA Statement.

Disclosure required Disclosure for a financial year should be conspicuous and easily understood with a link on the company homepage. If the company has no website, disclosure must be provided within 30 days of being requested. Efforts to eradicate slavery and human trafficking from the direct supply chain must be described. Companies must also disclose no steps having been taken in the areas of training, auditing, verification, certification, and internal accountability.

Unlike the UK MSA, the topics requested for the CTSCA statement are mandatory, and highly focused on verification methods; internal accountability of employees and contractors who fail to meet company standards is specific a requirement of the CTSCA.

Topics to be covered in the Statement Verification of product supply chains; audits of suppliers to evaluate compliance with company standards; internal accountability of employees and contractors who fail to meet company standards; certification by direct suppliers that materials in products comply with local laws in which the suppliers are doing business; training of employees and management that have direct responsibility for supply chain management.

By following the UK MSA guidelines, your organisation will not be in contradiction of the CTSCA.

Signature of company approval No specific requirement.

The California Transparency in Supply Chains Act

UK Secretary of State can seek an injunction through the High Court (or, in Scotland, civil proceedings) requiring the organisation to comply.

EnforcementThe Attorney General has exclusive authority to enforce the Transparency in Supply Chains Act and may file a civil action for injunctive relief for non-compliance, false or misleading declarations.

California Transparency in Supply Chains Act UK Modern Slavery Act

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