Georgina Rowley and Allison Crabtree explain the workings of the Modern Slavery Act 2015 and how companies can avoid the traps others have fallen into

The Modern Slavery Act 2015 is a groundbreaking piece of legislation requiring the UK's highest-turnover businesses to combat slavery and human trafficking on a global scale. The legislation was the brainchild of Theresa May in her previous post of home secretary and, whatever your view of the now prime minister's policies, the Modern Slavery Act is uncontroversial in its aim of eradicating abuse in supply chains across the globe.

In truly modern style, the teeth of the legislation lie in the power of the internet. Commercial organisations with an annual turnover of at least £36m must publish an annual slavery and human trafficking statement in a prominent position on their website. The statements are therefore liable to scrutiny from employees, potential recruits, customers, business partners, the general public and the media, who play the collective role of regulator and become the judge of how businesses are tackling slavery and cleaning up their supply chain.

The legislation stipulates that an organisation's statement must include the steps it has taken in the last financial year to ensure that slavery and human trafficking are not taking place in any part of its business or supply chain. It is non-mandatory but recommended that information be included on the organisation's structure and supply chains, especially: those parts where there is a risk of slavery and human trafficking; relevant policies and training; due diligence and risk assessment processes; steps being taking to assess and reduce risks; and how results are measured.

We have now seen the first batch of statutory statements, published by businesses with a year end of 31 March 2016. As we move through 2017, all organisations in scope will need to upload their statements.

So, what can we learn from the trailblazers? It's fair to say that the general quality has come under fire from commentators who have pointed out some common pitfalls. The main ones are:

Failure to meet the essential requirements of the legislation

These are easy to hit with a little attention to detail, but, for example, one recent report found that one in four statements was not signed by a named person. Although it would defy the spirit of the legislation, an organisation could technically comply by reporting that it took no steps to address slavery at all, so long as it still met basic rules for the content and display of the statement.

Using templates or stock language

Commentators have observed the same language in use across multiple companies and industries. The intent of the legislation is for organisations to prepare a statement that is thoughtful and specific to their business. Failure to do so is likely to be spotted and criticised.

Failure to include supply chain detail and risk assessment

Good statements show that the organisation understands exactly where its goods, services and labour come from and that it knows that certain regions and industries carry greater risks than others. Some of the best even use graphics to map the supply chain and include contractor relationships.

Lack of metrics for judging success

You might be working hard to eliminate slavery risks, but how will you measure and record that? Wherever possible, include concrete goals and how you will judge progress; for instance, ensure that all employees are trained within three months, or that all suppliers have signed up to a contractual policy.

Narrow involvement

It's hard for one person or small team within an organisation to produce a great statement. It remains nigh-on impossible to tackle modern slavery risks without proper awareness and buy-in at all levels of the business. The very best policies even make provisions to engage external stakeholders; for example, a process for whistleblowing from within their supply chain.

Failure to update

It is still early days, of course, but the intent is that organisations create an ongoing focus of concern, building on their statements year-on-year as they better understand and address the issues. Your first statement might be brief and show many areas for improvement, but next year's should show progress, which will mean significant work to do in the interim.

Georgina Rowley is a partner and Allison Crabtree a paralegal in the employment and pensions group at DAC Beachcroft