Modern Slavery Act - supply chain globalisation and prosecution risk

The Ministry of Justice's  'Criminal Justice System Statistics Quarterly' report recently published highlights trends in the criminal justice system from January to December 2016. The data shows the number of prosecutions under the Modern Slavery Act increasing from 12 companies in 2015 to 51 companies in 2016; a substantial rise in prosecutions of UK businesses.

The UK’s Modern Slavery Act 2015 aimed to prevent all forms of labour exploitation and increase transparency of labour practices in supply chains, requiring all commercial organisations that operate in the UK with a global annual turnover of £36 million or more to prepare a Slavery and Human Trafficking Statement each financial year.  With the annual statement needing to be signed and approved at the highest level in the organisation and made accessible on the company’s website, this is a high profile issue for brands and business reputation as well as directors.

Slavery can happen within in the EU and arise from working practices in the UK. In January 2017 two brothers were jailed for six years for recruiting and trafficking vulnerable men from Poland to work at the Sports Direct warehouse in Derbyshire. The pair controlled their victims' bank accounts and kept most of their wages, passports were taken and vulnerable workers were ‘totally isolated’.

However, while UK companies may monitor their immediate employment network they should also ensure that their entire supply chain is reviewed and monitored. This is particularly important where supplies are received from countries or via networks that are more difficult to check working practices.

This month, June 2017, Waitrose removed its own-brand corned beef from Brazil after investigations from journalists found the products ‘could’ contain meat linked to slave labour on cattle farms. JBS, one of the world’s largest meat processing companies, previously purchased cattle from a farm under federal investigation for using workers as modern-day slaves.  JBS has reportedly stated that it has ceased buying from the farm on discovering the alleged link to labour abuses. The company exports meat products to 150 countries around the world and major UK retailers.

The globalisation of supply chains, the media scrutiny, commercial and reputational risk as well as the increased risk of prosecution means that this is should be a priority for all companies but particularly those connected with the agriculture and food sector which can involve low paid manual workers with a high turnover and/or seasonal workers.

If any assistance is required for supply contracts to be reviewed or Modern Slavery processes and statements to be checked please contact Jayne Hussey (Jayne.Hussey@mills-reeve.com) or Jessica Burt (Jessica.Burt@mills-reeve.com).

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