Posted by Genevieve Auld
Modern Slavery in the UK: What’s the state of play?
Posted by Genevieve Auld
In recent years, there has been a marked shift in the UK government’s position on modern slavery. From being a pioneer in promoting awareness and legislation, there has been a gradual relegation of the issue as a policy priority. Despite evidence that modern slavery remains a salient risk in the UK, the post-Brexit political discourse on modern slavery now focuses more on securing national borders, with less emphasis on safeguarding the rights of victims, as evidenced by the current Illegal Migration Bill.
In this blog, we are interested in reflecting on where the UK Modern Slavery Act fits in with broader developments in regulatory and company action on human rights issues in the UK and elsewhere.
The Modern Slavery Act: Responding to the ‘great human rights issue of our time’
In 2015, the UK introduced the Modern Slavery Act (MS Act) in response to what the then Prime Minister Theresa May described as ‘the great human rights issue of our time.’ The legislation introduced a range of new measures including tougher criminal penalties for slavery and trafficking, providing support and protection to victims, and requiring businesses to annually report on activities to eliminate slavery and trafficking from their supply chains and their own business.
Eight years of reporting
Looking just at the company reporting requirements, eight years on from the passing of the MS Act, evidence suggests that reporting on modern slavery has stalled. A 2022 analysis of 100 Modern Slavery statements by the Financial Reporting Council (FRC) and Lancaster University found that 12% of companies failed to provide a modern slavery statement and that where companies did publish one, the majority were ‘fragmented,’ ‘largely descriptive and superficial.’ These findings echo a 2018 Ergon analysis of 150 companies’ modern slavery statements. Common issues include:
- Superficial reporting with often limited reporting on due diligence, risk assessments, detailed information on actions taken to combat modern slavery, policy effectiveness, or training.
- Many companies are not meaningfully assessing or disclosing or acting on risk with only 40% of the sample statements providing sufficient disclosure of slavery risks in their supply chain, and only 28% disclosed an action plan for acting on these risks
- Limited signs of continuous improvement: While the length and sophistication of statements have increased and improved, this has not resulted in increased reported actions to address impacts.
That there has not been more progress on reporting may at least partly be attributed to the UK government’s less than rigorous approach to enforcing compliance. For example, the government has never brought any injunctions that require a company to fulfil its reporting obligations, And scrutiny of company’s compliance has fallen to civil society groups, in contrast to other corporate reporting and regulatory regimes such as on the gender pay gap and anti-bribery and corruption which the government directly monitors and enforces. Moreover, an intended overhaul of the MS Act’s reporting requirements announced in 2020 (including the introduction of financial penalties for non-compliance), has not been enacted and the position of Anti-Slavery Commissioner has been vacant since April 2022.
What does the future look like?
While we should not downplay the early role of the UK’s MS Act in raising awareness of forced labour and introducing many companies to the concept of due diligence on human rights issues, we have to recognise that in many ways the game has moved on. Though there are other countries that have followed the UK’s lead on similar modern slavery laws – see Australia and Canada – there is an emerging consensus from researchers and regulators in other jurisdictions that reporting requirements alone cannot lead to changes in companies’ behaviour and legislative approaches have developed.
Modern slavery reporting superseded by import bans
Where governments are beginning to introduce new modern slavery focused legislation, it is increasingly through trade prohibitions and import bans, rather than modern slavery reporting requirements. For example, there are now import bans on goods produced with forced labour in place in the United States, Canada and Mexico – and they are being proposed in the EU.
New focus on mandatory human rights due diligence
Governments are moving away from single-issue focused legislation – such as modern slavery – in favour of broader laws on mandatory human rights due diligence (mHRDD) and reporting. This is evident from the introduction of mHRDD requirements in France, Germany and Norway, as well as in the EU Draft Directive on Human Rights Due Diligence. There are promising signs that mHRDD legislation will be more effective in terms of meaningfully changing company behaviour. Research on the French Duty of Vigilance found that ‘in the financial year after the introduction of the Act, 70% of companies started or revised their human rights and environmental risk mapping, and 65% of companies had dedicated human rights impacts identification processes (compared to 30% before the law).’
And there are calls for the introduction of mHRDD legislation from business in the UK, with 48 leading companies and investors releasing a statement calling for human rights due diligence legislation. However, this does not appear to be on the UK government’s agenda.
A more holistic approach to identifying and addressing human rights
It’s also the case that mHRDD legislation requires companies to consider a wider array of salient impacts associated with their businesses and supply chains, such as a living wage, deforestation or safe working conditions. A more holistic approach to due diligence avoids exceptionalising the issue of modern slavery, whilst not removing it as a salient human rights issue that companies may need to address.
In our work at Ergon, we have seen a shift by leading clients over the last five years away from a focus on modern slavery statements, to an emphasis on carrying out broader human rights due diligence. For example, many clients are now developing broad-based human rights strategies, commissioning Human Rights Impact Assessments (HRIAs), and taking action in response to these findings.
It seems that a focus on modern slavery reporting alone now feels both too narrow and too weak as a lever for improving company impacts on human rights.