On 9 July the UK government published its response to the recommendations made by the independent review of the Modern Slavery Act 2015 (MSA). At the same time, the government issued a public consultation on the proposed changes arising from the review, with the goal of improving the legisliation and strengthening the section 54 supply chain transparency provisions.
UK Government's Response to the Independent Review
The final report from the commissioned independent review of the MSA was submitted to the UK Home Secretary in March 2019 and was laid in parliament in May 2019. The government has now published an official response to the findings of the review and has accepted the majoriy of the 80 recommendations which were made.
In relation to the supply chain transparency provisions in section 54, the review set out a compelling case to ramp up and strengthen the obligations imposed under the MSA through a series of legislative amends. The government, in its published response, agreed with the majority of the suggested amends and has issued a public consultation to collect feedback on those proposed.
Notable accepted amends to section 54 include:
- keeping a list of in-scope organisations under the MSA;
- revising statutory guidance on supply chain transparency, including the provision of a template of information obliged organisations are expected to provide when reporting;
- requiring organisations to consider the entirety of their supply chains, and to include specific due diligence steps which an organisation intends to take over the course of the subsequent year, as well as those taken in the previous year;
- making the six areas in section 54(5) compulsory to report on;
- creating a centralised registry of all published statements; and
- various legislative provisions to strengthen the approach to tackle non-compliance.
Some of the recommendations which were rejected by the Government include:
- a recommendation to create an offence under the Company Directors Disqualification Act 1986 for obliged organisations that fail to comply with reporting requirements or to act when instances of modern slavery are discovered;
- the immediate introduction of fines as a penalty for non-compliance. The government instead, to avoid creating an overly compliance driven regime, responded that it would like a more gradual introduction of new enforcement measures over an appropriate timeline, consistent with growing business awareness; and
- requiring obliged organisations immediately having to consider the entirety of their supply chains. The government recognised that mapping complex and far reaching supply chains is challenging and that an organisation’s influence over suppliers may weaken further down the supply chain. Instead, the government is proposing to make clear the need for organisations to strengthen their human rights due diligence beyond the first and second layers of suppliers over time as part of a risk-based approach.
Click here to see the government's full response
In order to inform any changes to the MSA, the government has issued a public consultation to gather views on the proposed measures coming out of the independent review. It is inviting comments from organisations who currently publish statements under the regime, as well as other interested parties such as consumers and charities, and is looking to collect feedback specifically on the following three areas:
Section 1: Content of statements
The UK government would like to address the issue that many organisations who are MSA obliged are failing to go beyond the minimum compliance requirements, which makes comparing and benchmarking statements challenging and inconsistent.
The government is looking to establish mandatory reporting for MSA obliged companies by making the six criteria listed in section 54(5) compulsory. It is recognised however that some flexibility in reporting should be retained to reflect that different organisations and companies face different risks, and seeks responses on how to balance these two sides.
Section 2: Transparency, compliance and enforcement
Publishing a new online registry: The government is looking to develop an online registry where it will be mandatory for all MSA statements to be published. The government hopes that this will make it easier to monitor compliance and increase accessibility of MSA statements.
Single reporting deadline: The government is looking to introduce a single annual deadline for all obliged organisations to publish their statements by. It hopes that this will bring clarity for obliged organisations and facilitate their compliance.
Enforcement: The independent review suggested that sanctions for non-compliance should be toughened, and the government is seeking to obtain views on how to achieve this. Proposals include a regime of increasingly severe reprimands and the introduction of a civil penalty scheme.
Section 3: Public sector supply chains
The government is considering extending the scope of the MSA regime to include public sector organisations and bodies with an annual budget exceeding £36 million.
The consultation is open until 17 September 2019.
Click here to view the full consultation note