Compliance Corner: Modern Slavery and Supply Chain Reporting

In an effort to fight modern slavery and human trafficking, some nations, including the UK, France and Australia, have implemented supply chain reporting laws that require larger companies to publish yearly statements about the steps they take to minimize the risk of modern slavery infiltrating their business, including supply chains. The goal is to get large companies involved in eradicating modern slavery.

According to the International Labour Organization, an estimated 40.3 million people are in modern slavery, including forced labor, and 25% of modern slavery victims are children. Forced labor is defined as, “all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily.”

Both the UK and Australia have passed laws designed to fight modern slavery. The Modern Slavery Act of 2015 applies to companies who do business in the UK with a global annual revenue of £36 million. Each company is required to annually produce and publish a slavery and trafficking statement in a “prominent” place on their company website every year. This requirement applies to any company doing business in the UK, regardless of where that business is located.

Australia passed a similar law in 2018, the Modern Slavery Act of 2018, which took effect at the start of 2019 with the first public statement due by mid-2020. The Act requires companies who do business in Australia with a consolidated revenue of $100 million or more to report annually on the risks of modern slavery in their operations and supply chains and the steps they took to address those risks. The statements will be stored and publically available on the Modern Slavery Statements Register.

In both cases, noncompliant companies run the risk of negative public perception, including with job candidates and customers. Moreover, the UK law is currently under review, with legislators proposing to significantly strengthen the law by imposing a fine and banning non-compliant companies from public contracting.

Compliance Corner is a feature from PeopleScout. Once a month, we’ll be featuring a compliance issue that’s in the news or on our minds. Understanding the patchwork of labor laws across the world is complicated, but it’s part of what we do best. If you have questions on the compliance issue discussed in this post, please reach out to your PeopleScout account team or contact us at marketing@peoplescout.com.