Modern slavery – looking out for shackles in the supply chain

With the threat of slavery persisting in modern times, the Government commissioned an independent review of the Modern Slavery Act 2015 (“the Act”) in July 2018, to determine the effectiveness of the Act and to suggest potential improvements.

The outcome of that review was published in May 2019 which highlighted areas for improvement. The Government have now published their response, which can be found here.

Review of the Independent Anti-Slavery Commissioner and Independent Child Trafficking Advocate roles

The review made a number of recommendations, including greater independence of the Independent Anti-Slavery Commissioner role, and greater clarity around the role of Independent Child Trafficking Advocates. The Government rejected the review’s findings that the Commissioner role lacks independence on the basis that it is constrained by Government influence, but plans to issue statutory guidance about how Independent Child Trafficking Advocates (to be renamed Independent Child Trafficking Guardians) should work with public authorities.

While further guidance on the Independent Child Trafficking Advocates role is welcome, it is questionable whether the Government is really in a position to decide that the Commissioner’s role is already sufficiently independent of the Government. Clearly, the Government feels the Commissioner is sufficiently independent to hold the Government to account, although it has accepted that improvements can be made so that the Commissioner is less influenced by the Home Office.

Changes to Section 54 and transparency in supply chains

The review also looked into the effectiveness of the transparency requirements in Section 54 of the Act. Currently, these transparency requirements require commercial organisations ¹ to publish statements on what steps they are taking to ensure human trafficking is not taking place in their supply chains. The Government is now proposing to extend this duty to public bodies (including local authorities) whose annual budget exceeds £36 million and further develop the extent to which public bodies should be brought within the remit of the Act.

The Government also proposes the following:

• to improve the quality of Section 54 statements by strengthening guidance, including issuing a template to show the information reporting organisations are expected to provide;
• to remove the option to say that “no steps” have been taken as a way to demonstrate compliance with the Act;
• to set up a single reporting deadline to help identify those not responding; and
• to publish an online register where all statements would be submitted, recorded and available publicly.

This means that the burden on organisations is likely to increase, as they will need to dedicate more resource to carry out due diligence against their supply chains, as well as report on them in more detail. These changes also make it even more important for organisations to comply with their modern slavery reporting obligations, as the changes will make it easier to identify those organisations not complying, and in turn make it easier to apply sanctions for non-compliance. The Government has issued a consultation on these proposals, where organisations can submit their views and feedback. The deadline for responses is 17 September 2019 and you can find the consultation here.

The Government rejected some of the review’s recommendations that enforcement powers for non-compliance should be increased. The Government wants to encourage disclosures about instances and risks of modern slavery, and it is concerned that heavy enforcement might create an “overly compliance-driven” approach that would be counterproductive and discourage detailed disclosures. On the one hand, this reflects that modern slavery is an issue that needs to be taken seriously, and that compliance should not be viewed as a “tick box” exercise. However, the risk of this approach is that the requirements of the Act lack “teeth”. Given that historically, companies have under-reported regarding modern slavery, the Government’s stance risks being naïve.

Ultimately, the changes mean that organisations already caught by the Act should be reviewing their modern slavery reporting processes to ensure they are up-to-date and their reporting is sufficiently robust to stand up to scrutiny. As this new obligation is likely to extend to them in the future, public authorities with a budget of £36 million or above should be starting to prepare by examining their existing supply chains and considering how this duty can be satisfied within their procurement processes.

Further information

If you have any questions or require further support with compliance with your organisation’s modern slavery obligations, please contact Martin Brown or Emma Watt.

Citations

1. Those organisations who engage in commercial activities (including not-for-profits) with a turnover (or group turnover) of £36 million or above.

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