Clifford Chance

Hardly Soft Law: The Modern Slavery Act 2015 and the Trend Towards Mandatory Reporting on Human Rights

10 February 2017

Governments are increasingly imposing disclosure requirements on businesses in an effort to encourage practices that will help stamp out human rights abuses. Such transparency provisions are designed to improve access to information about what companies are doing (if anything) to identify and address the risks of human rights impacts that arise from business operations. The intention is to promote better accountability regarding the direct or indirect involvement of businesses in human rights abuses, and exert pressure on businesses to improve the efficacy of their efforts to tackle these issues.

A recent example of such transparency measures is the UK’s Modern Slavery Act 2015 (MSA), a domestic measure with international reach. The section below outlines the requirements of the MSA and its policy objectives, and highlights some themes emerging from practice under the MSA to date. Through a comparison of the MSA with other similar measures in ‘Trends in mandatory transparency legislation’, the article draws some conclusions on international policy trends relating to mandatory reporting measures. The section titled ‘Tools to assist businesses in responding to mandatory human rights reporting requirements’ below reviews the United Nations Guiding Principles on Business and Human Rights (UNGP) as a guide for businesses seeking to act in accordance with both the spirit and the letter of mandatory reporting requirements on human rights. Lastly, the article considers some of the challenges and opportunities for businesses in this area, and the potential effectiveness of mandatory reporting requirements in promoting the protection of human rights.

This article was first published in Business Law International, Vol 18 No 1, January 2017, and is reproduced by kind permission of the International Bar Association, London, UK. © International Bar Association.

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