UK Modern Slavery Act 2015: to reform or not to reform – that remains the question following latest position from Government

In addition to more general prohibitions against modern slavery, servitude and forced labour, the MSA requires organisations with a turnover of £36 million or more that carry on a business in the UK to prepare and publish a statement that explains the steps taken to eradicate modern slavery from their business and supply chains.

At the time it was introduced, the MSA was considered world-leading, not only in its approach to corporate transparency, but in the creation of new enforcement orders, which sought to protect and compensate victims. The extension of corporate reporting to professional services businesses, in additional to those providing and manufacturing physical goods, was also considered a game-changer. However, international best practice, such as the Corporate Sustainability and Due Diligence Directive in the EU ("CS3D") and the emergence of detailed due diligence laws in countries such as Germany, France, Switzerland and Australia, are now going beyond transparency and are introducing specific obligations on in-scope organisations to carry out due diligence on their supply chains and take steps to prevent and eradicate any identified issues.

In 2018, the UK Government commissioned an independent review of the MSA to assess, among other things, the effectiveness of the transparency measures introduced under the MSA. The report that followed concluded that the six areas of reporting currently recommended under the guidance (set out below) should be made mandatory and that companies should not be able to state they have taken no steps to address modern slavery in their supply chains.

Recognising the need for change, the UK Government launched a public consultation in 2019, following which several key commitments were made, including to mandate the areas that modern slavery statements must cover. However, although the 2022 Queen’s Speech set out the UK Government’s intention to codify these commitments into a new Modern Slavery Bill, no such legislative proposal was brought forward in the 2022–23 parliamentary session.

In 2024, the MSA remains unchanged, which has led to concerns from some that the fight against modern slavery and human trafficking has, in practice, fallen down the priority list for the recent, and possibly incumbent, UK Government.^[3] Under the previous administration, the House of Lords Select Committee was appointed by the Home Office on 24 January 2024 to once again consider the impact of the MSA and, in particular, to assess whether it has kept up-to-date with developments within the UK and internationally. Its Report was published on 16 October 2024 and the Government published its Response to the same earlier this week, on 16 December 2024. The key recommendations of the Report are considered below.  

1. New guidance

The Report urged the government to increase awareness amongst all companies about supply chains and publish standardised and accessible guidance for compliance with section 54. The Response indicates that the Home Office is currently working with a wide group of stakeholders from business, academia and civil society to update the Section 54 statutory guidance. There is no indication in the Response when this new guidance will be published.

2. Mandatory reporting topics

The Report recommends that rather than setting out voluntary areas of reporting, the UK Government specifically mandates the topics for reporting. It states that for the voluntary nature of the content of reporting makes it difficult for companies to be held accountable for their transparency. "The inconsistent quality and content of modern slavery statements obfuscates the transparency section 54 was intended to provide. This might be the result of insufficient guidance or engagement with companies, as well as a result of the lack of mandated topics for statements to cover." The Report also recommends that the Government make publication of statements on its modern slavery registry mandatory (which is also currently voluntary).

Mandating topics for reporting could be as simple as amending the "may" in section 54(5) of the MSA to "shall", which would have the effect of making the list of recommended information a legal requirement. That said, the Report implies that further Government guidance in this area would be helpful to assist organisations in improving both the quality and consistency of MSA reporting.

3. Supply chain due diligence

The Report concludes that developments internationally on due diligence indicate that the UK has fallen behind in its commitment to eradicate modern slavery. In particular, the Report cites a number of international laws (the German Corporate Due Diligence in Supply Chains Act, the French Duty of Vigilance Law, the Norwegian Transparency Act and the EU's CSDDD), which have gone beyond the transparency requirements of section 54 of the MSA by introducing mandatory due diligence obligations.

To ensure that the UK is not left behind, the Report recommends that the Government introduce legislation requiring in-scope companies to undertake modern slavery due diligence in their supply chains and to take reasonable steps to address problems. The Report notes that large UK companies operating internationally will likely already "find themselves obligated to meet the due diligence requirements of other nations."

With this in mind, the Report recommends that any UK due diligence law should be "compatible with the standards of the international landscape to make compliance easier for companies." It also notes that due diligence obligations should not apply to SMEs, and that any thresholds would need to be reviewed.

The Response does not make any concrete proposals in relation to the introduction of mandatory due diligence legislation. 

4. Import bans

As outlined in our related briefing on The World Uyghur Congress Case Ruling: A game changer for supply chains^[5], several countries, including the US and Canada, already have in place legislation banning specific imports implicated in certain modern slavery-related abuses, and this recent UK ruling creates the scope for further liability in relation to the import of higher-risk products. This comes amid discussions currently being held in the UK Parliament about possible steps of action, after an investigative report found that “Italian” tomato purees sold in British supermarkets are in reality often made with Uyghur forced labour in China.

In the US, the Uyghur Forced Labour Prevention Act prohibits the importation of goods mined, produced, or manufactured wholly or in part in the Xinjiang province of China or by an entity on the relevant list specified under the legislation. Import bans of this nature seek to complement existing due diligence legislation and help ensure that products are not rerouted to the US from other jurisdictions with weaker supply chain legislation.

The Report recommends that the "Government should consider introducing import laws which ban goods being brought into the UK if they are produced by certain companies known to use forced labour." The Response does not suggest that any specific import bans are on the way in the near future, stating more broadly that government will "continue to work with businesses and international partners to understand the impact of trade measures to combat forced labour". The Response also emphasises the UK's intention to work alongside businesses and international partners to better understand how trade measures can be used to combat forced labour.

5. Enforcement

The MSA has also been criticised for lacking "teeth" in relation to the potential penalties for businesses that are required, but fail to produce, MSA statements. In terms of enforcement, the Report states that "[t]here are many options for enforcing the supply chain requirements of the [MSA]" and recommends that: "the Government should introduce proportionate sanctions for organisations that do not comply with supply chain requirements."

The Response confirms that the Government is looking for ways that it can strengthen penalties for non-compliance and create a proportionate enforcement regime. However, the Response outlines this will require legislative change and will need to be considered against a wider review of how best the government can use legislative and non-legislative measures to tackle forced labour and increase transparency in global supply chains.

As a result of the Report and its recommendations, we expect new guidance to be published by the government, which should provide more clarity on how to write, approve and publish an MSA statement. When that will be is not however clear, and the recent history of false starts on changes to this regime (discussed above) is not encouraging. And whilst it remains possible the new Labour administration will give the regime more focus than its predecessor, it is striking that the Response makes no firm commitment to actual reform of the MSA in the short term, and whether such a review is carried out in the medium-to-long term continues to be uncertain.

At a minimum, we would expect reforms in this area to include a clearer outline of mandated topics from a reporting perspective, including reporting on (amongst other things) the organisation's effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate. On this basis, organisations would be well advised to carry out a review of their current MSA statements against current legislation and guidance to ensure that they are on the front foot when it comes to future potential changes. 

Large businesses operating internationally will likely already be considering compliance with developing international regimes such as CS3D, and addressing emerging stakeholder expectations, and so could take this time to better understand the key risks of their supply chains in anticipation of more stringent measures being introduced. Such businesses - and in particular those that import products from higher-risk jurisdictions from an MSA perspective - should consider the potential risk implications of their activities, and seek appropriate advice to help ensure compliance with relevant laws in this area.