The Government’s Response to the House of Lords Modern Slavery Committee Report

This week, the Government published its response to the House of Lords Select Committee’s (the Committee) report on the impact and effectiveness of the Modern Slavery Act 2015 (MSA). See here for our previous blog on the report. 

In its response, the Government has reaffirmed its commitment to tackling the broader issue of modern slavery and driving forward a “victim-centred approach”. However, no significant legislative changes were outlined in relation to section 54 reporting and supply chain due diligence requirements, although the response notes that the Government is currently updating its section 54 statutory guidance. Currently, section 54 of the MSA imposes a duty on commercial organisations with a turnover of £36 million or above and which carry out business in the UK to produce a statement detailing actions taken to ensure that their business and supply chains are free of modern slavery and human trafficking. 

Overall, the Government seems to have largely kicked the can of reform down the road, pending a wider review of how best to tackle forced labour and increase transparency in global supply chains. The response does not set out a specific timetable for next steps, instead noting that these will be revealed “in due course”. However, developments in jurisdictions elsewhere, such as the EU’s Corporate Sustainability Due Diligence Directive, and recent proposals to create a supply chain due diligence regime in Canada, may increase calls for the UK to keep pace with international regimes in order to remain a “world-leader” in the fight against modern slavery. We have summarised the key points in the response for business below. 

Elements of the Government’s response which may impact business

The Committee made recommendations to address the lack of uniformity and comparability of section 54 MSA statements.

The Committee found that the lack of mandated content requirements impeded the ability to compare companies’ MSA statements and hold them accountable for their transparency. They recommended (i) issuing a list of mandatory topics, which should include a description of how companies have assessed the effectiveness of their actions; and (ii) creating a summary dashboard which provides examples of good and bad reporting, amongst other things.

The Government’s response focused on improving access to data on the modern slavery statement registry, rather than the overall content of statements. The Government is developing a public facing data dashboard that will provide more data to the public and assist with greater transparency overall. However, there was no mention of introducing mandatory reporting topics.

The Committee recommended that the Government increase awareness amongst all companies about supply chains and publish standardised and accessible guidance for compliance with section 54. 

The Government referred to their regular engagement with trade bodies and companies (both in and out of scope of the legislation) to increase awareness of modern slavery and best practice measures to reduce the risk of exploitation in operations and supply chains. In addition, it is currently working with a wide group of stakeholders from business, academia and civil society to update the section 54 statutory guidance to further support businesses with producing high quality statements. 

The Committee recommended the introduction of proportionate sanctions for organisations that do not comply with the supply chain transparency requirements.

The Government responded by highlighting the power of the Home Secretary to seek an injunction to require compliance. However, this power has not been exercised due to anticipated costs and difficulties. The Government is reviewing how it can strengthen non-compliance penalties; however, it is aware that this will necessitate legislative change which must be weighed against the benefit of other non-legislative measures available. The Government will outline next steps “more broadly in due course”. 

The Committee recommended that the Government meet the same standards of responsibility to reduce modern slavery in its supply chains that are required of private companies.

The Government notes that public sector organisations can publish modern slavery statements voluntarily, and that it is reviewing the scope and nature of section 54, and will need to consider this suggestion as part of this review. 

The Committee noted that the Modern Slavery Bill outlined in the Queen’s Speech in 2022 is an improvement but could go further.

The Government points to recent legislation it has presided over such as the Employment Rights Bill and its manifesto commitment to introduce a new offence of the criminal exploitation of children. It is reviewing how best to tackle forced labour and increase transparency in global supply chains; further details shall be set out more broadly in due course. 

The Committee recommended introducing mandatory due diligence requirements compatible with international regimes. 

The Government supports voluntary due diligence approaches taken by businesses, which is in line with the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises. It is carrying out a national baseline assessment on the implementation of the UNGPs. This will help inform the UK’s approach to business-related human rights abuses, including in global supply chains. 

Looking forward, the Government will assess the best ways to prevent environmental harms, modern slavery, and human and labour rights abuses in both the private and public sector. This includes considering more effective due diligence rules. The Government will consult with interested stakeholders as it considers any further action. 

The UK should consider introducing import laws on products which are produced by certain companies known to use forced labour i.e., company driven not country driven.

The Government states that it will continue to assess and monitor the effectiveness of the UK’s measures and work with businesses and international partners to “understand the impact of trade measures to combat forced labour.”