Really – start-ups and SMEs should also adhere to the Modern Slavery Act?

I have recently been researching and writing a guidance paper for investors and shareholders with a human rights organisation in respect of the Modern Slavery Act and what they should be considering in their due diligence. In researching for this paper, questions were raised as to whether only companies that fall within the threshold requirements of the Act need to comply with the Act or whether all companies need to be considering their supply practices and worker rights.

In order for larger companies to carry out their risk assessment and provide the transparency statement under the provisions of the Act, they will need to ensure that all suppliers in their supply chain are free of modern slavery and human trafficking. Thus smaller and medium sized companies will also need to consider their worker rights and supply chain and have in place relevant policies and procedures.

What is the benefit for start-ups, small and medium sized companies for putting forced labour/worker rights policies and procedures in place?
•Branding of companies is key and companies want to ensure that their brand is enforced by its supply chain and worker rights processes
•When going for a tenders, new contracts or contract renewals, questions of compliance will be raised as will the adherence to relevant policies
•Anti-slavery clauses are being included in new contracts and renewed contracts as part of compliance under the Act

So whilst start –ups and SMEs do not legally have to comply with the Act, they will need to be able to point to relevant policies and procedures if they want to win tenders and/or be awarded new contracts and continue doing business with larger companies. By not drafting policies or understanding what they should be considering in respect of forced labour or anti-slavery, such entities may risk losing business.

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