Higher Education leaders have naturally been focused on the big policy and funding questions brought to the fore since the election of the majority Conservative Government – the future levels of tuition fees, the Teaching Excellence Framework, the future model of quality assurance – all brought into even sharper focus by Jo Johnson’s speech to UUK’s Annual Members’ Conference last week.
When they have not been concerned with the big strategic issues, there have been compliance requirements for Registrars and Secretaries to worry about – the PREVENT Duty and CMA probably at the top of the list.
Well, one new compliance requirement that has appeared to slip through largely unnoticed arises from the Modern Slavery Act 2015. This Act is due to come into force in October 2015 following a White Paper in December 2013 and a consultation on some aspects of the Bill in February to May 2015.
What is Modern Slavery?
The introduction to the Act states that it relates to “slavery, servitude and forced or compulsory labour and to human trafficking”.
What does the Act do?
The Modern Slavery Act 2015 consolidates and simplifies existing offences, increases penalties, creates an Anti-Slavery Commissioner, establishes a duty to report potential victims to the National Crime Agency and most significantly for this readership requires supply chain reporting.
Are Universities covered by the Act?
Section 54 of the Act requires that “a commercial organisation within subsection (2) must prepare a slavery and human trafficking statement for each financial year of the organisation”.
Subsection (2) defines a commercial organisation as one which supplies goods or services and has a total turnover of not less than an amount prescribed by regulations made by the Secretary of State.
The turnover threshold has been set at £36million which aligns with the Companies Act 2006 definition of “big” for reporting purposes.
The definition appears to include Universities as we supply services and in almost all cases have a turnover in excess of £36 million. In their Education Sector Group Briefing dated 18th December 2014, Eversheds stated that for the purposes of the then Bill, businesses covered by its requirements would include “fee charging education institutions, whether charitable or for-profit”.
What is the Slavery and Human Trafficking Statement?
Section 54 (4) of the Act states that the Slavery and Human Trafficking Statement is “(a) a statement of the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place (i) in any of its supply chains (ii) in any part of its own business, or (b) a statement that the organisation has taken no such steps”.
That appears to suggest that one would be compliant with the Act if one published a statement that no steps had been taken to ensure that slavery and trafficking are not taking place. However, the PR damage that could be caused by that is clear. It is likely therefore that Universities will wish to publish a statement detailing the steps they have taken.
What should be included in the Statement?
The Home Office is expected to produce further guidance once the Act comes into effect in October, but the Act already states that the Statement may include the organisation’s structure, its business and supply chains; its policies in relation to slavery and human trafficking (how many Universities have such a policy?); its due diligence processes in relation to slavery and human trafficking in its business and supply chains; risk assessments undertaken in this area; effectiveness of ensuring that slavery and human trafficking is not taking place in its supply chains (how can this be measured?); and that training is available to staff.
Who should approve the Statement?
The governing body should approve and sign the Statement.
How should the statement be published?
The Act requires that the Statement is published on the organisation’s website and there should be a link to the Statement “in a prominent place on that website’s homepage”.
What are the sanctions for non-compliance?
The duties of the Act will be enforced by the Home Office bringing civil proceedings and apply to all parts of the UK.
Implications for Universities
The first Slavery and Human Trafficking Statement will be required in the Financial Report for year ending 31st July 2016, so there is some time to prepare this. However, priorities would appear to be as follows:
- Engage Procurement function at the University to establish how to obtain the evidence to support the statement, including the due diligence and risk assessment elements;
- Review or consider need for Slavery and Human Trafficking Policy;
- Identify who requires training in this area;
- Brief senior teams and governing bodies on the requirement.
Conclusion
With the focus on big picture policy matters, it appears that this new compliance requirement has not really had the attention it maybe deserves and really has come in under the radar. Some of the legal firms’ regular updates did make reference to it, but there did not seem to be much awareness in the sector. No one is going to oppose efforts to remove slavery and human trafficking, but it will be a challenge in some areas where there is a long supply chain to review and I am not sure what the real value is other than a moral one.
Some questions which have occurred to me….
- At what point does the due diligence end when there are sub-contractors and multiple suppliers?
- What questions will need to be asked to provide the evidence for the statement?
- How will we deal with overseas campuses or recruitment agents?
- Will the sector agonise and then over-comply as we often do?
- Will this make any difference at all to the level of slavery and human trafficking?