UK modern slavery reporting rules to be strengthened with public bodies included

Out-Law News | 06 Oct 2020 | 11:11 am | 2 min. read

UK public bodies with a budget of over £36 million will be required to report on the steps they have taken to prevent modern slavery risks in their supply chains as part of government proposals.

The UK Home Office said in a response to last year’s transparency in supply chains consultation that it would include large public bodies in the requirement which already exists for corporates with a turnover in excess of £36m to report annually on the steps they have taken to prevent modern slavery.

Public bodies, including government departments, will be able to report as a group or individually within a ‘family’ of organisations.

Also proposed is an obligation on public and commercial organisations to publish modern slavery statements on a new digital reporting service to be launched early next year, with a set April to March reporting period and a deadline of 30 September to complete reports. The structures of statements are also to be tightened.

Regulatory expert Alistair Wood of Pinsent Masons, the law firm behind Out-Law, said the reforms to the Modern Slavery Act 2015 were welcome as modern slavery risk was not restricted to the private sector.

“It is crucial for corporates and public bodies to understand their supply chain because as recent stories show, a failure to do so can have profound implications. The establishment of a new digital government reporting service and the mandatory structure for reports will further drive the need for commercial organisations and public bodies to be comfortable with their approach to modern slavery compliance. The changes should increase scrutiny of their approach,” Wood said.

Wood said the reforms were likely to prompt action by corporates in their handling and reporting of modern slavery risks.

“To date whilst there has been guidance on the content of modern slavery statements, the structure has been voluntary. As a result, there has been an option available not to report on the areas where companies have taken no action rather than to explicitly acknowledge this lack of action in their statements,” Wood said.

“However, if the government's proposed reporting requirements become law corporates will have to address in their statements areas such as supply chain risk and the effectiveness of their modern slavery compliance plan, and gaps could be apparent. Either way corporates, and now public bodies, should be taking steps now to ensure that they are adequately addressing modern slavery risk,” Wood said.

In the transparency in supply chains consultation response (45 page / 409KB PDF), the government said it would mandate the areas which modern slavery statements must cover, and organisations will have to state clearly when they have taken no steps within a particular area.

The current guidance for voluntary statements recommends a focus on six key areas, including structure and supply chains; policies on modern slavery and human trafficking; due diligence; risk assessment and management; action taken to address modern slavery; and training. These six areas will be mandatory under the proposed reforms.

The government will publish guidance helping organisations to report using best practice approaches. It said this would highlight the importance of transparency, risk-based action and industry level collaboration to address shared challenges.