Supply chain slavery reporting turnover threshold set at £36 million

Will Green is news editor of Supply Management
29 July 2015

The UK government has announced that £36 million will be the turnover threshold at which firms will have to report on slavery in their supply chains.

The government, which consulted on the threshold level as part of the Modern Slavery Act, said the new reporting requirements would come into force in October.

Speaking in Vietnam during his tour of south east Asia, prime minister David Cameron said: “From October we will also require all businesses with a £36 million turnover or above to disclose what they are doing to ensure their business and supply chains are slavery free.

“This measure is one of the first of its kind in the world and it will be a huge step forward, introducing greater accountability on business for the condition of their supply chains.”

The measure will apply to all large firms who do business in the UK and have supply chains elsewhere in the world. The reporting statement must describe the steps they have taken to ensure slavery and human trafficking is not taking place in their supply chains.

Various other measures in the act come into force this week, including trafficking reparation orders, which encourage courts to use seized assets to compensate victims, and prevention orders, which ensure those who pose a risk of committing slavery offences cannot get work in relevant fields.

“The scourge of modern slavery has no place in today’s society and I am proud of all that Britain is doing to wipe it out,” said Cameron. “Later this week, new measures will come into force in the UK to provide greater protection and compensation for victims and to make sure that those responsible face tougher sanctions. But there is still much more to do.”

David Noble, group CEO, CIPS, said: "We welcome the new measure that requires large companies to publish an annual statement setting out what steps they are taking to ensure that slave labour is not being used. However, if the Modern Slavery Act is to have a chance of truly eliminating slavery from British supply chains, then the government must not limit the application of the Act to large firms only. Modern day slavery is not a problem confined to the supply chains of large multinational corporations. On the contrary, SMEs can have long and complicated supply chains. In fact, our research shows that four out of five British SMEs say they are struggling to gain end-to-end visibility of their own supply chains. They are, therefore, perhaps in most need of guidance."

The government said Vietnam ranked in the top five countries for victims of modern slavery, while in 2013 it was estimated there were between 10,000 and 13,000 potential victims of modern slavery in the UK.

Cameron said Kevin Hyland, the anti-slavery commissioner, would be leading a fact-finding mission to Vietnam this autumn to begin talks on enhanced cooperation between the two countries to tackle slavery.

Phil Bulman, managing consultant at Vendigital, said: “By encouraging companies to be more accountable for their supply chains, the incoming legislation means they will need to start policing their supply relationships even more closely and invest more resources in doing so.

“This will require greater corporate honesty as it will no longer be acceptable for businesses to ignore what they can’t see. This is vital if they wish to avoid potentially damaging supply chain scandals in the future.”

Cindy Berman, head of knowledge and learning at the Ethical Trading Initiative, said: “Make no mistake – this won’t be easy. It will involve a deep dive into the supply chain to understand what’s really going on many tiers down – getting visibility of the many layers to truly see the conditions of workers at the bottom of the chain. We want companies to be open about it and be recognised for their efforts to investigate, uncover problems and provide remedy.

"The message is clear – it is no longer an option to stay below the radar, refuse to take responsibility for problems in your supply chain and hope you won’t get exposed.”

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