Out-Law News 2 min. read
17 Mar 2021, 3:09 pm
UK businesses required to produce an annual modern slavery statement are being urged to publish this in a new online registry operated by the Home Office.
The Modern Slavery Statement Registry is designed to make it easier for consumers and investors to search for statements, and to compare the actions that businesses subject to the requirements are taking to identify and address the risks of modern slavery in their operations and supply chains. Publication in the registry is currently voluntary, but the government intends to legislate for mandatory reporting under planned changes to the regime.
The government has also issued new guidance on publishing a modern slavery statement and submitting it to the registry.
Section 54 of the 2015 Modern Slavery Act requires organisations that carry on a business or part of a business in the UK and that provide goods and services to report annually on the steps that they have taken during the financial year to ensure that slavery and human trafficking are not taking place in their own business or in their supply chains. The requirements apply to organisations with a turnover of £36 million or more, including turnover of subsidiaries.
So far the government has used guidance rather than legislation, and public and stakeholder pressure, to drive compliance steps rather than by enhancing reporting thresholds, introducing fines and making threats of enforcement
Currently, the government may issue civil proceedings to require an organisation within scope to produce a statement if it does not do so. It cannot currently impose monetary penalties for non-compliance. An organisation can comply with the letter of the law by publishing a statement that it has not taken any steps to ensure there is no slavery or human trafficking in its business or supply chains.
Following an independent review of the Act, published in May 2019, the government consulted on measures to strengthen the regime. This includes extending the reporting requirements to public bodies which have a budget of £36m or more, including local authorities in England and Wales; mandating the content of modern slavery statements and requiring director sign-off; and introducing civil penalties for non-compliance in line with the development of a planned single enforcement body for employment rights.
The creation of the new registry, which replaces a previous voluntary initiative run by the non-profit Business and Human Rights Resource Centre, follows a recommendation of the independent review. The government has published its own modern slavery statement of March 2020 in the registry and is encouraging businesses in scope to submit their most recently published statement "to demonstrate that they have reported". Of the respondents to the government's recent consultation on strengthening the 2015 Act, 82% did not consider there would be challenges to publishing on a government registry. However, publishing on the registry is still optional at this stage.
Regulatory law expert Neil Carslaw of Pinsent Masons, the law firm behind Out-Law, said: "UK legislation is still not overly prescriptive in its stance in relation to modern slavery reporting and in particular the structure of statements".
"So far the government has used guidance rather than legislation, and public and stakeholder pressure, to drive compliance steps rather than by enhancing reporting thresholds, introducing fines and making threats of enforcement. It still remains to be seen if the government will give real teeth to the legislation. That said, the government consultation last year confirmed the intention in respect of fines, a mandatory structure for statements, a single reporting deadline of 30 September and a central reporting registry – all of these factors, if made compulsory, would considerably increase the reporting obligations and consequences of non-compliance," he said.
In a new report, published this week, the House of Commons Business, Energy and Industrial Strategy (BEIS) committee called on the government to accelerate its proposals to amend and strengthen the Act and introduce civil penalties for non-compliance. It also recommended that the Department for BEIS develop a 'whitelist' and 'blacklist' of companies which do and do not meet their obligations to uphold human rights throughout their supply chains.
The BEIS committee's inquiry was prompted by what a committee statement said was "mounting evidence of forced labour and wider human rights abuses affecting Uyghur and other ethnic minorities in Xinjiang". Among the fashion, retail, media and technology companies with large UK presences which gave evidence to the committee, many could not guarantee that there were no connections between the province and their wider supply chains.
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