The House of Lords is due to consider the following question for short debate:
Baroness Ritchie of Downpatrick to ask Her Majesty’s Government what assessment they have made of the implementation of the Modern Slavery Act 2015 in respect of ensuring that (1) large, and (2) small to medium sized businesses, adhere to human rights due diligence requirements across their supply chains.
At the time of writing, no date has been scheduled for the debate.
What is modern slavery?
Modern slavery encompasses:
- forced labour; and
- human trafficking.
Globally, the International Labour Organisation has estimated that in 2016 over 40 million people were in modern slavery and that 25% of victims were children.
In the UK, the charity Anti-slavery has said that modern slavery can take the form of “forced sexual exploitation, domestic slavery or forced labour on farms, in construction, shops, bars, nail bars, car washes or manufacturing”.
The UK Government has said that the hidden nature of modern slavery can make it difficult to measure its prevalence. However, it has reported that over 10,000 potential victims of modern slavery were reported to UK authorities in 2019. The Centre for Social Justice thinktank has estimated that the number of victims could be 100,000.
Slavery in UK supply chains
There have been concerns that UK businesses, and goods sold in the UK, are exposed to slavery in international supply chains. Particular concern has been raised about labour conditions in the Xinjiang region of north-western China. It has been alleged that China uses the forced labour of the Uyghur Muslim minority to produce cotton in the region. China produces 20% of the world’s supply of cotton and it has been reported that one in five of all cotton products worldwide may contain cotton linked to human rights abuses.
What are the reporting requirements for businesses in the Modern Slavery Act?
The duties on businesses to report on their efforts to eradicate slavery in their supply chains are contained in section 54 of the Modern Slavery Act 2015. Commercial organisations with an annual turnover of over £36 million must produce a slavery and human trafficking statement every financial year. The statement must set out the steps the organisation has taken to eradicate modern slavery in its supply chain and in its own business, or it must state that the organisation has taken no such steps.
What impact have the reporting requirements had?
In February 2021, the Business and Human Rights Resource Centre (BHRRC) published the report ‘Modern Slavery Act: Five Years of Reporting: Conclusions from Monitoring Corporate Disclosure’. The BHRRC assessed the compliance of over 16,000 slavery statements published by businesses since the act had entered into the force. The report stated that the act had raised awareness of modern slavery and produced improvements among a “cluster of leading companies”. However, the report concluded that the act had “failed in its stated intentions” to eradicate modern slavery from UK supply chains.
The BHRRC found that 40% of in-scope companies had not complied with the reporting requirements, and “not one injunction or administrative penalty” had been applied to a company for failing to comply. The report concluded that the act’s provisions had “not been monitored or enforced” and they had “failed to drive systemic corporate action to expunge forced labour, even in high-risk sectors.”
In March 2021, the House of Commons Business, Energy and Industrial Strategy Committee published the report of its inquiry on Xinjiang forced labour and UK supply chains. The committee concluded that the reporting requirements in the Modern Slavery Act were “out of date, [and had] no teeth”. The committee said that it did not accept “that businesses should be excused from doing basic due diligence to guarantee that their supply chains are fully transparent and free from forced labour and slavery”.
The committee recommended that the Government should:
- introduce “tough” civil penalties for non-compliance with reporting requirements;
- extend the reporting requirements to public bodies; and
- create a publicly accessible depository for modern slavery statements on the Government’s website.
What is the Government doing?
In 2019, following the final report of the Independent Review of the Modern Slavery Act 2015, the Government ran a consultation on changes to the business reporting provisions in section 54 of the Modern Slavery Act.
In its response to the consultation, the Government committed to make a range of changes to section 54, which included:
- improving the transparency of slavery statements by mandating reporting deadlines and the areas the statements must cover;
- extending the provisions to public bodies; and
- a commitment to “consider” enforcement options and the introduction of civil penalties for non-compliance.
As set out in the report of the House of Commons Business, Energy and Industrial Strategy Committee of March 2021, many of those commitments have not yet been implemented. The Government published its response to the committee’s report in June 2021. The Government said that it had implemented its commitment to set up a registry of slavery statements on the Gov.uk website and that in future it would mandate that companies submit their statements to the registry.
On financial penalties for companies that failed to comply with the reporting requirements, the Government confirmed that it would legislate to introduce such penalties “as soon as parliamentary time allows”.
- House of Lords Library, ‘Tackling modern slavery in the Commonwealth’, 1 March 2021
- HM Government, 2020 UK Annual Report on Modern Slavery, October 2020
- House of Commons Library, ‘Worker exploitation in UK clothing supply chains’, 8 July 2020
- House of Commons Library, The Modern Slavery Act 2015 Five Years On, 18 March 2020
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