An independent review of the Modern Slavery Act has published an interim report on the transparency and reporting requirements of the legislation, recommending a swathe of new requirements for companies obligated to report and penalties for those that fail to comply.
Section 54 of the Act requires all large businesses (defined as those with turnover exceeding £36m) to produce and publish a statement setting out what they are doing to eradicate modern slavery risks from their operations and supply chains. For many firms who have not had to consider this before this has been a new area of regulatory work and we reported last year on how the tech sector was complying. Overall the quality of statements varied, and we’ve run a number of events (including one with the Home Office in a few weeks) to support members with their reporting and in identifying key areas of risk.
Whilst the law is not enforced per se, we have heard from many members that requiring firms to produce statements, but giving little guidance on what that statement must contain, r has been a powerful driver compared to more tick-box style reporting, however the report’s authors believe this has led to poor and inadequate reports.
The report makes several recommendations for tough new requirements for businesses, recommends that the scope of the Act extends to the public sector and suggests new penalties for non-compliance.
A full summary of the report and recommendations was sent to members of the Sustainable Supply Chain group (get in touch if you want a copy), but among the key recommendations:
- The Government should run a repository of all modern slavery statements
- Changes to the Act and accompanying guidance to ensure statements report against 6 core areas
- New responsibilities for the Independent Anti-Slavery Commissioner to review compliance annually
- A requirement for companies to designate a board member with overall responsibility for the statement
- New offences and fines for companies and individuals for non-compliance
- An extension of s54 to the public sector and banning non-compliant businesses from bidding for public sector contracts.
It is worth saying these are recommendations, not policies so the next step is for the Home Office to determine consider which, if any, recommendations it wants to adopt. Some require amendments to primary legislation (tricky with such a constrained parliamentary timetable), but changes to guidance would be quick and easy to implement.
While we would not support a central repository for statements, there are a few excellent and free repositories created by civil society which already fulfil his role, there is a good case for better guidance for businesses about what they should cover in statements – providing businesses have sufficient time to adapt to any new requirements.
We’re discussing statements, KPIs and how to improve them at a workshop with the Home Office on Wednesday 27 February. Spaces are still available so let me know if you would like to attend.