The UK government is planning to toughen modern slavery reporting rules following a parliamentary review of the Modern Slavery Act 2015 (MSA) and the Home Office Transparency in Supply Chains Consultation that closed in September 2019.

Amongst other changes, the current guidance on the key areas of focus for voluntary statements will be made mandatory, and reporting obligations will be extended to public bodies with annual budgets in excess of £36 million.

Contents of the statements

The current legislative guidance sets out six key areas of focus for voluntary statements. Under the proposed reforms, it will become mandatory to report on these areas, as set out below:

  1. organisational structure and supply chains;

  2. policies on modern slavery and human trafficking;

  3. due diligence in relation to slavery and human trafficking;

  4. risk assessment and management;

  5. the actions that the organisation has taken to prevent slavery and human trafficking in its business or supply chains, measured against performance indicators, if appropriate; and

  6. staff training on slavery and human trafficking.

The proposals indicate that some of these six reporting areas may be combined and that new mandatory reporting areas may also be introduced. 

Once the legislation is amended and these reporting areas are made mandatory, organisations must state clearly if they have failed to take any steps within a particular area and will be encouraged to provide a reason for this.

As under the existing requirements, the date of the authorising board approval and the date of director signature will be required on each statement and, if relevant, the entities covered by the group statement will need to be declared.

Further updated guidance for businesses, including best practice approaches to reporting against these mandatory areas, is expected later in 2020.

Timing and method of submission

The proposals will require organisations to publish their modern slavery statements on a Government-run reporting service, which is currently in development.

A single reporting deadline of 30 September will also be introduced, 6 months after the reporting period of 1 April – 31 March. The proposed reporting deadline is designed to mitigate any conflict with financial year ends, which might affect the timing of publication of their modern slavery statements.

Enforcement and civil penalties

Crucially, due to mixed views on civil penalties amongst the respondents to the consultation, the response does not contain any concrete proposals on changes to the nature and level of civil penalties in the event of non-compliance with the MSA. As such, the Home Office is considering enforcement options in line with the development of a new Single Enforcement Body for employment rights and an update will be issued in due course.

Public bodies

The modern slavery statement requirements will be extended to public bodies which have an annual turnover of £36 million, the current threshold for commercial organisations.

Under the proposals, public bodies will also be allowed to publish ‘group statements’ e.g. a central government department may publish a group statement which also covers their arm’s length bodies. Further guidance will be published on this in due course.

Next steps

Companies should review the contents of their modern slavery statements in light of the proposed changes, particularly the 6 reporting areas which are set to become mandatory and also the potential additional reporting areas.

We will provide further updates as further guidance is released.