UK Gov't publishes 2nd interim report from Independent Review of UK Modern Slavery Act

In July 2018, the Home Secretary, at the request of the Prime Minister, announced a review of the Modern Slavery Act 2015 (Act) including Section 54. The transparency in supply chains provisions set out in section 54 of the Act require large commercial organisations supplying good or services, and carrying on a business in the UK, to prepare a slavery and human trafficking statement for each financial year. The company must state the steps it has taken to ensure that slavery and human trafficking is not taking place in its business or its supply chains, or it must state it has taken no such steps.

The report principally addresses the question: “how to ensure compliance and drive up the quality of slavery and human trafficking statements produced by eligible companies”. The review panel sought evidence from civil society, Parliamentarians, government bodies, business and international organisations. 

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Article
23 January 2019

NGO welcomes Independent Review recommendations to strengthen Modern Slavery Act

Author: FLEX

The Independent Review of the Modern Slavery Act, chaired by Baroness Butler-Sloss, Frank Field MP and Maria Miller MP, has this afternoon published its second interim report which focuses on the 'transparency in supply chains' requirement (section 54) of the Act...

...The report makes clear that it is time for government to step up and make businesses take this legislation seriously. In 2017, 43% of the FTSE 100 failed to comply with this law alongside only 58% of the top 100 companies awarded government contracts...

...FLEX welcomes the recommendations to:

  • Develop sanctions against non-compliant companies
  • Introduce a central state-run repository for statements
  • Remove section 54(4)b which allows companies to be legally compliant with the law simply by stating that they have done nothing to address the issue
  • Make it mandatory to cover specific areas of the business, instead of advisable to do so
  • Extend section 54 to the public sector so that public procurement can also be used to tackle modern slavery and human trafficking in supply chains

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Article
23 January 2019

UK: Parliamentarians call to sanction companies that don't comply with Modern Slavery Act

Author: Reuters

"Lawmakers urge UK to punish big companies that fail to tackle modern slavery", 22 January 2019

Britain should give its landmark modern slavery law more bite and punish businesses and public bodies that fail to combat slavery in their supply chains, lawmakers said on Tuesday.

The 2015 Modern Slavery Act requires firms whose turnover exceeds 36 million pounds ($48 million) to produce an annual statement outlining the actions they have taken to avoid slavery in their operations...

...Yet a lack of enforcement and penalties, and confusion around the reporting requirements, have resulted in many companies flouting the law, three politicians said in a government-ordered review of the first-of-its-kind legislation...

...The politicians behind the review - Frank Field, Maria Miller and Elizabeth Butler-Sloss - said Britain should change the law to introduce penalties, ranging from fines and court summons to disqualifying directors of firms that fail to comply...

...The review said the law should be sharpened to specify the scope of the anti-slavery statements, and remove a section that allows companies to comply by stating they have taken no action.

Britain should also follow the example of Australia - which in November passed a modern slavery law - by requiring large public bodies to file an anti-slavery report, the review said.

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Report
22 January 2019

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

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

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

 

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