The ILO estimates that forced labor generates $150 billion in illegal profits yearly. The Modern Slavery Act aims to curtail the ill-gotten gains through greater supply chain transparency.

The complexity of supply chains has risen with business globalization. At the same time, political unrest and economic hardship have led to immigration crises as men, women and children flee untenable living conditions. The result? Criminals have taken advantage of these vulnerable populations, leading to the human trafficking and forced labor of more than 21 million people.

In an effort to shut down those who hope to profit by human trafficking, Parliament passed the UK Modern Slavery Act last fall, which requires organizations to produce a public slavery and human trafficking statement, updated annually, that specifies how forced labor risks in the supply chain are being addressed.

Does the Act Apply to Your Organization?

If your company or a subsidiary conducts business in the UK and has an annual turnover of $51 million, you will need to provide a link to the statement on the home page of your website. In addition, franchisees with a similar annual turnover would also be required to comply with the Act.

Greater Visibility Into Supply Chains Adds Value

Failure to comply could lead to civil penalties, but the bigger danger for companies lies in reputational and financial damage should investors, customers or the public-at-large lose confidence in organizations that lack transparency or, worse, that fail to address human rights violations within their own supply chains.

By adopting a proactive due-diligence and on-going monitoring program to identify potential forced labor risks, organizations simultaneously mitigate compliance, reputation and financial risks while also demonstrating their commitment to ethical sourcing.

Know Your Risk Level

Certain industries are more susceptible to forced labor in their supply chains. According to ILO data, construction, manufacturing, mining, utilities and agriculture represent high risk areas for modern slavery. Organizations that do not look beyond Tier 1 or even Tier 2 suppliers may not be digging deep enough.

Five Steps You Can Take

Learn more about the Act and how you can improve your ability to meet the Act’s requirements and mitigate reputational and financial risks of forced labor in your supply chain in our free white paper, “The UK Modern Slavery Act of 2015: How the New Law Impacts Global Businesses.” Download your copy today!