Scottish businesses should prepare themselves for the onset of new obligations under the Modern Slavery Act 2015 which have a “huge potential impact on their public image.” a leading corporate compliance expert has warned.
Ray Gribben, a partner in the Glasgow office of Burness Paull, said that the new legislation, which comes into effect this month, requires companies with turnovers over £36 million to prepare a slavery and human trafficking statement, publicising on their website the actions they are taking to combat these evils, not only within their own organisation but also in their supply chains.
The law, he said was of particular relevance to companies with links to “high risk jurisdictions”, including those in Africa and Asia, and he warned that smaller businesses below the current threshold should prepare for its likely application to them in the future.
Significantly in terms of reputation and perception, if they are taking no such steps, they are obliged to state this explicitly, carrying a risk of being seen as insufficiently committed to eradicating the problems.
Gribben, who described the new “extra layer of compliance” as a “natural extension of compliance provisions related to bribery and money laundering” said: “Our advice is to carefully look at the risks and where such practices might exist in their own organisation or supply chains and to address it. Because of the nature of supply chains, it could potentially be quite an onerous task.”
He added: “It is something we are bringing to the attention of clients as it might otherwise have passed them by. We are raising it as a concern that they should be making provision for. The duty to prepare and publish the Statement comes into effect in October, with transitional arrangements for businesses whose financial year comes close to that time.”
“We will be telling clients what the new law is all about. The statement that the company has to produce could include information about its structure, what its policies relating to slavery and human trafficking are and what due diligence is used.”
Gribben also warned smaller companies to prepare for a likely future extension of the law. “The turnover threshold is likely to come down and businesses at or just below the threshold should be looking at this now; not just big corporates but LLPs, partnerships and professional service companies.”
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