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Out-Law News 2 min. read

UK legislation proposed to tackle modern slavery

A private members’ bill seeking to address modern slavery, including establishing minimum standards of transparency in supply chains, has been introduced to the UK parliament.

The Modern Slavery (Amendment) Bill (4 page / 164KB PDF), sponsored by independent crossbench peer Lord Alton of Liverpool, would amend the Modern Slavery Act 2015 to prohibit the falsification of slavery and human trafficking statements, to establish minimum standards of transparency in supply chains in relation to modern slavery and human trafficking, and to prevent companies using supply chains which fail to demonstrate minimum standards of transparency.

It is very rare for private members’ bills to progress through both Houses of Parliament due to constraints on parliamentary time and the failure to achieve cross-party support. However, the bill, if approved, would enable the independent anti-slavery commissioner to issue formal warnings to a commercial organisation if it fails to meet transparency obligations in respect of publishing and verifying information about the country of origin of its supply chain, or arrange external supplier audits.

Neil Carslaw of Pinsent Masons, the law firm behind Out-Law, said: “If enacted in its current form, the bill would indirectly require companies to identify and verify information about the country of origin of components and arrange external audits. While it is unlikely that this bill will make it on to the statute book, it represents  a very different change of approach and gives an insight into the different views on strengthening modern slavery legislation. That strengthening is called for as, currently, while companies have to be transparent about what they do in respect of modern slavery, they don’t actually have to take any anti-slavery steps.”

The legislation would also make it a criminal offence for someone responsible for a modern slavery statement, such as a company director, to know or be reckless to the fact that the modern slavery statement that they are publishing is materially false or incomplete. A defence would be available if all reasonable steps had been taken to ensure the statement is accurate.

Sean Elson of Pinsent Masons said: “We will be tracking this and related developments with interest, especially the proposals in respect of criminal liability and how a modern slavery statement would be found to be materially incomplete – that may involve an assessment by reference to external material and guidance.”

The bill proposes a fine of up to 4% of global turnover or £20 million, whichever is lower, and/or imprisonment of up to two years for the relevant individual. The legislation also proposes the same level of fine if a company received a warning from the commissioner but continued to, for example, source from suppliers which have failed to meet minimum levels of transparency.

“The draft legislation effectively creates a minimum level of transparency not only for the companies publishing modern slavery statements, but for their supply chain,” Carslaw said.

Carslaw said that the bill went much further than the proposals contained in a government paper on reforming the 2015 Act published last autumn. Those plans covered reporting requirements for public bodies with a budget of over £36m, and an obligation on public and commercial organisations to publish modern slavery statements on a new digital registry.

In January foreign secretary Dominic Raab told the UK parliament that the government was planning to introduce financial penalties for businesses failing to publish annual modern slavery statements. The legislation is expected to be introduced when parliamentary time allowed.

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