UK mandatory due diligence laws are overdue

The UK has officially gone from a leader to a laggard when it comes to supply chain laws. It passed the first national law globally with the Modern Slavery Act 2015 and by and large this law was a success. Even if many statements were (and remain) a bit rubbish, it got a lot of attention among tech (and other) firms. It forced them to think about something they never did before and we saw loads of new partnerships, businesses and action to radically increase supply chain transparency. 

However, like The Force Awakens, the iPhone 6 and hoverboards, this 2015 relic is obsolete and needs updating now. At techUK, we and members are encouraged by an official recognition that the law needs to change and are cautiously optimistic the Department for Business and Trade review on Responsible Business Conduct will heed the many calls to update the law. 

In terms of the updates nothing short of mandatory human rights due diligence will suffice. It’s where the party is at now, and with the EU finally passing a due diligence directive in the Omnibus package, the British government should use this as a basis. Labour is pushing closer alignment with the EU and for tech firms that operate globally it is much more efficient and impactful to have aligned international legislation. Pounds wasted on multiple compliance efforts can go towards meaningful impact. 

The key difference between having to do due diligence and the current Modern Slavery Act is the former is a ‘doing’ law and the latter is a ‘reporting law’. Under the Modern Slavery Act, it is perfectly fine to say you are doing nothing as long as you mention it and analysis has shown statements have homogenised and become ‘tick-boxy’ as they have become embedded in normal business operations. That isn’t to say all of them are bad (many tech firms are held up as exemplars!), but too many are and cannot possibly be effective as having to conduct meaningful exploration of where, how, and when firms source components.  

Should the UK do the right thing and adopt similar laws to the EU in this regard, it also needs to do some legalistic housekeeping. The GB Energy Act, Procurement Act and recent healthcare legislation all include some form of due diligence, import bans or extra questions for those bringing products in or selling them, and while well intentioned create a real headache for businesses. New due diligence can ditch the relevant Sections in this legislation and have a wide-ranging more effective legal book. 

So, what happens next? We’re waiting on the Department for Business and Trade (DBT) to conclude the Responsible Business Conduct Review; we’ve made our case to them time and time again and are hopeful they see the light. At a recent event we didn’t get a date (but expect April) and it will need what is called ‘primary legislation’ that goes through the full parliamentary procedure. It may be too close to this King’s Speech given the inevitable consultation periods and decision-making practices, so hopefully we will get strong intent and proper legislation next year.  

And my advice to tech businesses? Look at the requirements of the EU and start implementing!