The Modern Slavery Act is effective now.
All organisations, including housing associations, with a year end on or after 31 March 2016 and a turnover greater than £36m have to produce a statement about the current financial year setting out what steps they have taken to ensure that slavery or human trafficking is not occurring in their supply chain or in their own organisation.
Housing associations should already be considering what needs to be done to ensure compliance.
The Modern Slavery Act introduces the concept of 'transparency in supply chains' and requires all commercial organisations which carry on a business in the UK with a total annual turnover of at least £36m to produce an annual slavery and human trafficking statement. Housing associations satisfy the definition of 'commercial organisations' set out in the Act, so many will be caught.
A supply chain includes both direct and indirect suppliers and is very wide ranging including outsourced services supplied by agencies. Housing associations need to be satisfied that modern slavery does not exist at any point in the chain leading to a good or service supplied to them.
Examples of suppliers where risks may exist are:
Recent cases in the media demonstrate modern slavery is not something occurring solely outside the UK.
The statement must set out what steps your organisation has taken during the financial year to ensure that slavery and human trafficking is not occurring either in your supply chain or in your own organisation. Although an association could simply make a statement saying no steps have been taken in relation to slavery and human trafficking, the legislation suggests the statement should cover the following:
The statement needs to be approved at Board level and published on the association’s website, with a link in a prominent place on the website's home page. The statement should be published within six months of the financial year end.
There are no financial or criminal penalties for failing to produce a statement, although the Secretary of State may seek an injunction through the High Court requiring the organisation to comply. However, the reputational damage an organisation may suffer if it chooses not to report or to take no action may be significant.
There is obviously a lot for associations to consider in order to be able to publish their first statement at the end of this financial year. In preparation they should be considering what type of statement they want to make, who will be responsible for compliance, how they identify and assess the risks of slavery and trafficking in their supply chain and how they determine the level of due diligence that needs to be undertaken, what policies and training is going to be put in place and how they are going to ensure effective ongoing monitoring and review. But the clock is ticking and time is running out.
For further information or if you would like to discuss how the Modern Slavery Act could impact you please contact Julie Bruce or your usual KPMG contact.