Modern slavery compliance requires you to certify that your business and supply chain don't use forced labor, human trafficking, or exploitative labor practices. This matters legally because in the UK, the Modern Slavery Act 2015 already requires large companies to report on slavery risks—but a contractual clause makes it your specific obligation to the other party and gives them the right to audit and terminate if you fail. The legal principle is "due diligence": you must actively investigate and monitor your suppliers, not just assume they're compliant. For example, if you source clothing from a factory that uses migrant workers in debt bondage, you could be liable even if you didn't directly employ those workers. This is high-risk because it requires you to police your entire supply chain, which is expensive and complex.
Negotiate for a "reasonable steps" standard rather than absolute compliance, and ask the other party to define exactly what due diligence they expect (e.g., annual audits, certifications, or self-assessments). Get clarity on who pays for compliance audits and what happens if a supplier fails—you shouldn't bear unlimited liability for suppliers' actions beyond your control. ---
Frequently Asked Questions
What does this clause mean in simple terms?
Modern slavery compliance requires you to certify that your business and supply chain don't use forced labor, human trafficking, or exploitative labor practices.
Why should I care about this clause?
This matters legally because in the UK, the Modern Slavery Act 2015 already requires large companies to report on slavery risks—but a contractual clause makes it your specific obligation to the other party and gives them the right to audit and terminate if you fail.
What are my options?
The legal principle is "due diligence": you must actively investigate and monitor your suppliers, not just assume they're compliant.
How does this affect small businesses?
For example, if you source clothing from a factory that uses migrant workers in debt bondage, you could be liable even if you didn't directly employ those workers.