How companies get caught in the slave trade

The recent conviction of a UK business owner for a human trafficking offence has been a wake-up call to big businesses to carefully monitor their supply chain, if they are to avoid being connected to slave labour unwittingly.

Further to our earlier article on the Modern Slavery Act, the requirements of the Act have developed and the true extent of the requirements have come to light meaning that companies of every size need to check out where they stand, even if they are a small supplier much further down the supply chain.

With the new regulations now enforceable for any business with a financial year ending on or after 31st March 2016, many smaller companies may have checked the headline criteria and assumed they are not going to be affected by the Act, as the requirements apply only to organisations which carry on business in the UK with a global turnover of more than £36million, including subsidiaries.

Those companies that fit the criteria must provide a statement of the steps they are taking to ensure that no forced labour or human trafficking is taking place in any part of their business or supply chain. The slavery and human trafficking statement must be published on their website, with a prominent link on their homepage.

And the catch for smaller companies lies in where they sit in any such supply chain, many of which may be complex, as they are likely to find more questions being asked from the top of the supply chain. The result could be pressure on smaller companies to undertake detailed supply chain auditing themselves, in order to satisfy the demands of those larger companies.

In the case of the recent conviction, the owner of UK bed-making business Kozee Sleep was convicted of conspiracy to traffic by Leeds Crown Court and sentenced to 27 months in prison. Mohammed Rafiq’s trial followed the conviction of two Hungarian gangmasters who were found guilty of supplying Kozee Sleep’s UK factories with slave labour. They had promised Hungarian nationals good wages and housing, but instead the workers found themselves held in squalid conditions, not allowed to travel and made to work up to 16 hours a day, seven days a week, for less than £2 per day. Kozee Sleep’s beds were being supplied to a number of leading high street retailers, who had set out their ethical trading requirements, which Kozee Sleep failed to meet.

According to the Anti-Slavery Commissioner, this is not an isolated incident and many other cases are expected to go to trial. Another, involving Lithuanian workers experiencing inhuman working and living conditions, involved a poultry farm which is in the supply chain of well-known brand Happy Egg.

Following the introduction of the Modern Slavery Act 2015, there is going to be increasingly close attention on how global businesses are tackling potential slave labour in the supply chain. For the £36 million plus companies, there needs to be clear responsibility for compliance with the Act, with due diligence to identify potential risk of contravention of the Act in any part of the supply chain.

At first glance, slavery may seem a million miles away from your business, but unfortunately that is not the case, and directors, and buyers in particular, should keep the topic in mind as they trade, whatever their company size.

If you would like any more information in relation to this article then please feel free to contact me via email: andrew.lester@bowlinglaw.co.uk or visit my profile.

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