The Modern Slavery Act 2015 (the 'MSA') contains provisions relating to transparency in supply chains. The MSA requires the annual publication of a statement (or a link thereto) regarding slavery and human trafficking. The statement must be posted in a prominent place on the organisation's website, and it must be signed by a director. This requirement applies to commercial organisations operating in the UK, regardless of their place of incorporation, with an annual global turnover of more than GBP 36 million.
In terms of the content of the statement, this should indicate the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains, and in any part of its own business; or, alternatively, that the organisation has taken no such steps.
At present, enforcement sanctions for failure to publish a statement in accordance with the MSA are limited. There are no financial penalties for non-compliance; theoretically enforcement would be by way of an injunction brought by the Secretary of State, but there have been no such proceedings to date. The intention when the legislation was introduced was that enforcement would be achieved by the public scrutiny to which commercial organisations are exposed in publishing their statement.
Examples of legal action are rare. A challenge was brought against British American Tobacco and Imperial Brands on behalf of child labourers working on tobacco crops in Malawi and these proceedings are believed to be ongoing.
Due to inconsistency in how seriously organisations have been taking their responsibilities under the MSA, plans have been announced by the government to amend the legislation. The proposals will strengthen the current requirements relating to transparency and the reporting process. Certain content in the report will become compulsory. This will include: reporting on the organisation's relevant due diligence processes; steps that have been taken to assess and manage the risks of slavery and human trafficking in the supply chain; and the organisation's effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains. In terms of reporting, a single reporting deadline is to be introduced, and organisations will be required to publish their statements on a new registry (the government has already launched this registry, and is strongly encouraging organisations to upload their reports voluntarily). It is unclear, however, whether the government will introduce any firmer penalties for non-compliance; the primary motivator for businesses remains reputational risk.
There is also a proposal relating to supply chain due diligence for pension schemes. In March 2021, the UK Department for Work & Pensions published a call for evidence seeking views on how pension scheme trustees understand social factors, and how they are included in their environmental, social, and governance ('ESG') policies. There has been no update on this proposal as yet.
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