Modern Slavery Act – the next steps for the UK

In 2015 when the UK passed the Modern Slavery Act 2015 (MSA) it was considered world-leading. A recent October 2024 House of Lords Committee Report (Report) however suggests that the UK is now lagging behind other countries.

The Report made various recommendations for improvement to which the government responded in December 2024. The government response (Response) acknowledges the fears that the UK has fallen behind and sets the aim of once again being at the forefront of advances.

The Response is vague on timescales and implementation, with changes planned "in due course", making it difficult to predict when legislative and regulatory changes may be implemented. There are pre-emptive measures, especially around supply chain due diligence, that commercial organisations could implement now to stay ahead and ensure compliance with more evolved international regulations.

Existing regime

The MSA created general prohibitions against modern slavery, servitude and forced labour. For commercial organisations that supply goods or services in the UK with an annual turnover of £36 million or more section 54 also created a specific obligation for them to publish an annual statement setting out the steps they are taking to prevent modern slavery. If the organisation has a website this statement must be published there. It is worth noting that the MSA allows for the statement to merely report that no steps have been taken, and no injunction has ever been sought to enforce the publication on an organisations' website.

The MSA sets out six recommended areas of reporting, however none of these are mandatory and no uniform template is prescribed. Although information about supply chains is one recommended area to report against, not all businesses do.

Supply chain in the EU

Although there are no mandatory due diligence obligations regarding the supply chain under the MSA, any large UK companies operating in the EU will be required to undertake mandatory human rights and environmental due diligence under the Corporate Sustainability Due Diligence Directive (EU 2024/1760) (CSDDD). The CSDDD includes a due diligence duty to address adverse human rights and environmental impacts in supply chains.

The CSDDD is being implemented into national law by member states, with a deadline of 26 July 2026. Starting from 26 July 2027 the CSDDD will start to be applied on a staggered basis starting with the largest companies.

Committee Report

In October 2024, following its call for evidence, the House of Lords Committee published "The Modern Slavery Act 2015: Becoming World-Leading Again", a report on the MSA (Report).

The Report made several recommendations for improvement, including to strengthen company accountability for modern slavery in their supply chains, and urged the current government to revisit and strengthen the former government's draft Modern Slavery Bill mentioned in the 2022 Queen's Speech.

Mandatory reporting topics

The Report called for the government to publish standardised and accessible guidance for compliance with section 54. The current inconsistency between statements impedes the ability to make fair and accurate comparisons. The Report recommended a list of mandatory areas to report against, with the government to make the publications of statements on its modern slavery registry mandatory.

Sanctions

The Report recommended the introduction of proportionate sanctions for organisations that do not comply with supply chain requirements, and for the government to clarify responsibility for the modern slavery strategy enforcement.

The government notes in the Response that the Home Secretary has the power to seek an injunction to require compliance, but that this has not been used due to anticipated costs and difficulties. The Response concludes that strengthening the penalties for non-compliance will require legislative change and be considered alongside non-legislative measures.

Our thoughts

The Response does not give information on specific timings, however there are steps that businesses can proactively take.

It seems likely that there will be revised section 54 statutory guidance, possibly mandating reporting on specific areas and introducing a new data dashboard. Businesses can take action now to ensure they are data gathering and ready to report against all six areas of reporting (listed below) that are currently recommended under the MSA.

1. Organisation structure and supply chains
2. Policies in relation to slavery and human trafficking
3. Due diligence processes
4. Risk assessment and management
5. Key performance indicators to measure the effectiveness of steps being taken
6. Training on modern slavery and trafficking

Supply chain due diligence is already a requirement for in-scope businesses trading in the EU and various international markets. Getting ahead of the game through conducting due diligence exercises would cut the timeframe needed to comply with such a duty if and when it is introduced in the UK.

The regulatory landscape is a constantly evolving one. Beyond legal requirements consumers and investors are increasingly looking for businesses to act responsibly. The reputational damage of a supply chain tainted by forced labour can be disastrous. Our team of regulatory lawyers are ready to advise on all aspects of the MSA and supply chain due diligence, contact us today.