The government is proposing changes to strengthen the UK’s Modern Slavery Act. Introduced in 2015, it was the first piece of national legislation requiring businesses to annually report on what steps they are taking to limit and remedy modern slavery risks in their business and supply chains. It applies to businesses that operate in the UK with a turnover above £36m.
The CBI has responded to the government’s proposals because business fully supports working with the government to improve the effectiveness of the Modern Slavery Act. The proposals include requiring businesses to publish specific information in their statements, introducing a single reporting deadline and new civil penalties for non-compliance. The government’s intention is to improve the consistency and comparability of business’ statements and strengthen its approach to enforcement.
Responsible businesses have long taken steps to prevent modern slavery and promote sustainable development. The CBI believes that the Modern Slavery Act must continue to build upon the UN Guiding Principles on Business and Human Rights, which business fully supports. Driving compliance with the Modern Slavery and encouraging action that goes above and beyond minimum standards needs to be balanced with proportionality in what businesses are expected to report and in the practicality of what the government can enforce.
The CBI is calling on the government to:
- Make it mandatory, on a comply or explain basis, for businesses to report against six areas in their modern slavery statements that they are already advised to include
- Introduce guidance that clearly states legitimate reasons that a business might not report against all six mandated areas
- Through guidance, set out proportionate expectations for what level of detail businesses are required to report
- Introduce functionality into a public registry (e.g. sector-searches, notifications, minimum compliance criteria) that gives businesses, investors and consumers information to drive up the quality of modern slavery statements
- Avoid a simplistic assessment of reporting quality in a public registry that creates a risk that business’ statements are judged as poor-quality because of a benchmark that cannot take the diversity of supply chains into account
- Retain the deadline for businesses to report their modern slavery statement six months after their year-end to ensure the quality of statements – this supports accurate, impact-led reporting, effective board-scrutiny and international and voluntary disclosures
- Establish a robust, staged enforcement approach which focuses resources on proactively targeting wilfully or repeatedly non-compliant businesses, sharing this information where appropriate with other government bodies to improve risk-based and intelligence-led enforcement
- Introduce proportionate fines, levied against the company, to businesses that fail to publish non-compliant modern slavery statements after being notified of the breach in the first instance
- Raise awareness of business’ obligations to prevent unintentional non-compliance by promoting the statutory guidance and highlighting any changes to the MSA to businesses in scope.
For more information or to get involved in the CBI’s work on sustainable supply chains, please get in touch with Jennifer Beckwith.