UK Modern Slavery Law: Change Around the Corner?

In October 2024, the House of Lords Committee on the Modern Slavery Act 2015 (Select Committee) published a report outlining that the UK has fallen behind internationally in combatting modern slavery. Of particular interest to businesses, the Select Committee recommended the introduction of legislation requiring organisations to conduct modern slavery due diligence in their supply chains. Such legislation would align the UK more closely with international developments in this area such as the EU's Corporate Sustainability Due Diligence Directive (CS3D).

This briefing looks at the key recommendations from the Select Committee report on supply chain due diligence, changes to the Modern Slavery Act 2015 (MSA) statement regime and import bans.

Background

The Select Committee was appointed on 24 January 2024 to consider the impact and effectiveness of the MSA, which was considered a world-leading piece of legislation when introduced in 2015. 

Section 54 of the MSA requires businesses with an annual turnover of over £36 million to publish a slavery and human trafficking statement. The statement must cover the steps a business has taken to ensure that modern slavery is not taking place in its supply chains (or that it has taken no such steps). The MSA includes areas that 'may' be covered in a modern slavery statement (e.g. regarding due diligence, risk assessments and training) but does not mandate their inclusion. The Government also operates a voluntary registry for organisations to publish their modern slavery statements. Failure to comply with section 54 can be enforced through an injunction, but the Government has never used this power.

In the intervening years since 2015, despite calls to strengthen the MSA, no major changes to the legislation have been implemented.

Key Recommendations of the Select Committee Report

MSA statement regime

The report found that the lack of mandated requirements for the content of modern slavery statements has led to inconsistencies between statements which undermine the objective of increasing transparency. The report recommends that the Government:

• Mandatory publication: Make publication of statements on the modern slavery registry mandatory.
• Mandatory content: Set out the topics that each statement must (as opposed to 'may') cover, including a description of how the organisation has assessed the effectiveness of its actions.
• Increased awareness: Publish online guidance and figures on the total number of statements published (including examples of good and bad reporting).
• Enforcement: Introduce proportionate sanctions for organisations that do not comply with supply chain requirements. This dovetails with wider recommendations in the report to set up a Single Enforcement Body to act as the point of contact for labour exploitation across all sectors.
• Extension to government bodies: Extend the section 54 requirements to public sector bodies with an equivalent annual budget (currently the requirements only extend to private sector bodies over the turnover threshold).

Supply chain due diligence

There has been a proliferation of mandatory supply chain due diligence legislation in recent years, including in France, Norway, Germany, the US and Canada. The EU's CS3D (approved in May 2024), for example, will require companies with more than 1000 employees and a turnover of more than €450 million to conduct due diligence to ensure that human rights and environmental obligations are upheld in their chain or activities. The report notes that, in light of developments such as this, the UK has "fallen behind" other jurisdictions. UK companies which operate internationally may in any case also become obligated to meet the new due diligence standards of other nations.

The report therefore recommends that the government:

"…introduce legislation requiring companies meeting the threshold to undertake modern slavery due diligence in their supply chains and to take reasonable steps to address problems."

The Select Committee acknowledged the current threshold for companies to publish a modern slavery statement (£36 million of annual turnover) and provided various international comparators (which are often based on the number of employees working for an organisation). The report does not recommend a specific threshold, but suggests that the Government consider the range of options available and ensure that the requirements are applied equally to the public sector.

Import bans

The report highlights the impact of the US Uyghur Force Labor Prevention Act (UFLPA), which prohibits the importation of goods mined, produced or manufactured in the Xinjiang province of China or by an entity on the UFLPA Entity List.¹ While acknowledging the importance of such laws, it also notes the "significant foreign policy implications" of country-specific legislation. The report therefore recommends that the Government should consider introducing import laws which ban goods being brought into the UK if produced by companies known to use forced labour, but that such laws should not be targeted at particular countries. 

Next steps

The Government has until 16 December 2024 to respond to the Committee's recommendations. If the Government takes forward the recommendations, it will likely initiate a consultation process to ensure that the changes are effectively implemented and address the concerns of a range of stakeholders.

The Select Committee report begins by stating that there is a substantial opportunity for the Government to "take action and make the UK world-leading in the battle against modern slavery once again". In light of international developments in this area, we expect the Government to take forward the majority of the Select Committee's recommendations.

Authors: Ruby Hamid, Tom Stroud, Anya Brown