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22 Jan 2019

The Rt Hon Frank Field MP, The Rt Hon Maria Miller MP, and The Rt Hon Baroness Butler-Sloss GBE

Independent Review of the Modern Slavery Act: Second interim report: Transparency in supply chains

As the first national legislation on this matter, Section 54 of the Modern Slavery Act was ground-breaking legislation...However, the impact of the section has been limited to date. Evidence gathered...shows that there is a general agreement between businesses and civil society that a lack of enforcement and penalties, as well as confusion surrounding reporting obligations, are core reasons for poor-quality statements and the estimated lack of compliance from over a third of eligible firms. [I]t is time for the Government to take tougher action to ensure companies are taking seriously their responsibilities to eradicate modern slavery from their supply chains. The Australian Federal Parliament, which has just passed its own Modern Slavery Act, has gone much further in respect of transparency of supply chains than the provisions established in section 54

Summary of recommendations (full list of recommendations in report):  

Clarifying which companies are in scope

  • Government should establish an internal list of companies in scope of section 54

Improving the quality of statements

  • Section 54(4)(b), which allows companies to report they have taken no steps to address modern slavery in their supply chains, should be removed.
  • [T]he six areas set out as areas that an organisation’s statement may cover will become mandatory
  • [R]eporting should include not only how businesses have carried out due diligence but also the steps that they intend to take in the future
  • The legislation should be amended to require companies to consider the entirety of their supply chains

Embedding modern slavery reporting into business culture

  • The Companies Act 2006 should be amended to include a requirement for companies to refer in their annual reports to their modern slavery statement
  • Businesses should be required to have a named, designated board member who is personally accountable for the production of the statement

Increasing transparency

  • There should be a central government-run repository to which companies are required to upload their statements and which should be easily accessible to the public, free of charge

Monitoring and enforcing compliance

  • The Independent Anti-Slavery Commissioner should monitor compliance
  • Government should make the necessary legislative provisions to strengthen its approach to tackling non-compliance

Government and the public sector

  • Section 54 should be extended to the public sector and Government departments should publish a statement
  • Government should strengthen its public procurement processes to make sure that non-compliant companies in scope of section 54 are not eligible for public contracts
  • The Crown Commercial Service should keep a database of public contractors and details of compliance checks and due diligence carried out by public authorities