We take a look at the supply chain recommendations in the UK Government’s response to the House of Lords Modern Slavery Act 2015 Committee report.
The Modern Slavery Act 2015 (MSA) is almost 10 years old, and the House of Lords Modern Slavery Act 2015 Committee published a report towards the end of 2024 indicating that the UK has fallen behind other nations in its efforts to combat modern slavery (although those UK companies which operate globally may be subject to higher standards imposed elsewhere in any event).
We previously took a look at the recommendations of the Committee. That article can be accessed here if you missed it: https://www.fsp-law.com/modern-slavery-act-2015-requirements-for-businesses/
The Government has since reviewed the Committee report and outlined its plans in a number of areas. We set out the supply chain aspects below.
Requirement to publish modern slavery statement on registry dashboard
The Committee recommended that the Government make the publication of MSA statements on its modern slavery registry mandatory. It is hoped that this will improve accountability. The Committee also recommended that a dashboard is created to publish the MSA statements online.
The Government encourages all organisations to upload their statements to the registry and to provide a summary of their statement by answering a series of questions. This is intended to improve understanding of modern slavery risks and best practice. The Government is currently developing a public facing dashboard to provide more information on modern slavery compliance and to increase transparency.
New guidance for section 54 compliance
The Committee recommended that the Government publish guidance for organisations to follow, with a view to increasing their awareness.
The Government has been working with businesses, academia and civil society to update the current section 54 statutory guidance. The existing Transparency in Supply Chains (TISC) statutory guidance has recently been updated, and sets out:
- Which organisations are required to publish a statement: Essentially organisations carrying on business in the UK with an annual turnover of £36 million or more. Organisations are responsible for determining whether the legislation applies to them although the guidance includes information relevant to group companies, franchise networks, overseas organisations, charities, investment trust and companies in administration, including worked examples. The guidance also encourages smaller organisations not meeting the £36 million threshold to voluntarily report on their efforts to address modern slavery risks.
- What the statement needs to include: Although it is up to individual organisations to decide how to present information in their modern slavery statement, the guidance explains that as the statement is a public-facing document, it should be written in simple language and set out in a way that promotes transparency.
Typically, the issues to be considered when preparing a statement might include:
- How does the organisation operate within its supply chain and do its activities involve purchasing products/services, outsourcing or subcontracting?
- In which countries do the organisation’s suppliers operate and are any high-risk territories?
- How does the organisation go about preventing modern slavery in its supply chain, including due diligence activities?
- Does the organisation have a modern slavery policy, what does it say, and how is this integrated into its business and the appointment of its suppliers?
- How and when are relationships with suppliers reviewed?
- What training is given to staff?
- How are modern slavery issues addressed when identified, and are whistle-blowers protected?
- How and when the statement should be published: The statement should appear in a prominent place on the organisation’s website. For organisations with no website, a copy of the statement should be provided to anyone who requests this in writing, within 30 days of the request being made. The statements are to be published for each financial year that an organisation operates, within 6 months of the end of the financial year.
The Home Office website contains further guidance, and the Home Office can be contacted directly for questions arising in relation to modern slavery reporting requirements.
Mandatory reporting for public bodies
The Committee recommended that section 54 reporting should also be extended to cover all public sector bodies, under a similar financial threshold to that used for businesses. Public bodies have a duty to ensure that exploitation is not occurring in their supply chains.
Supply chain due diligence and enhanced reporting
The Committee recommended that supply chain due diligence should be made a legal requirement for businesses to carry out, with the possibility of extending this to small and medium businesses. They recognised that the previous government had drafted legislation about this and that the draft laws could do with strengthening.
The Government responded to the above by citing that the UK was signatory to the UN Guiding Principles on Business and Human Rights (UNGPs) as well as the Organisation for Economic Co-operation and Development’s Guidelines on Multinational Enterprises. The implementation of the UNGPs is currently being assessed and it is hoped that this will inform the Government’s approach to human rights abuses both at home and globally. The Government is expected to consult with stakeholders on private and public sector compliance and is looking at ways to combat modern slavery by legislative and non-legislative measures.
Import bans on forced labour products plus trade negotiations
The Committee recommended introducing import laws to ban goods coming into the UK that have been produced by forced labour, this to also be a part of trade negotiations.
The Government has not confirmed how it will do this and is lagging behind the EU which has just brought in a regulation prohibiting products made with forced labour from entering the EU. The UK Government says it will continue to monitor the effectiveness of the UK’s existing measures. It will also continue to work with businesses and international partners to strengthen workers’ rights and improve global labour standards.
Proportionate sanctions for non-compliance
The Committee recommended introducing sanctions for organisations that do not comply with supply chain requirements. The updated TISC guidance provides that if an organisation fails to produce a modern slavery statement for a particular financial year, then the Secretary of State may bring civil proceedings in the High Court for an injunction for specific performance of a statutory duty under section 45 of the Court of Session Act 1988 requiring the organisation to comply. If the organisation fails to comply with the injunction, they will be in contempt of a court order, which will be punishable with an unlimited fine.
Timing
The rules in this area of law are set to continue changing as the Government works through the recommendations of the Committee and looks to strengthen the UK’s regime to tackle the threat of modern slavery and human trafficking. If you have any questions arising from this article or about your company’s compliance with the MSA as it currently stands, please contact [email protected]
