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Clifford Chance

Clifford Chance

Business & Human Rights Insights

UK government strengthens expectations on businesses reporting under the UK Modern Slavery Act 2015

When the UK Modern Slavery Act 2015 (MSA) came into force in October 2015, it was accompanied by guidance from the UK government foreshadowed by the statute.

This guidance articulates the UK government's stance on the appropriate interpretation of the MSA. It also provides practical guidance to companies on the application and implementation of the MSA. Two years on, the statutory guidance has been revised and updated to clarify the application of the Act in certain areas, set the Government's expectation of companies required to comply with the reporting regime in the MSA and reflect the emerging practice of corporate reporting against the MSA.

The key changes are explained below.

  • Scope of report: The guidance states that organisations should aim to include all the coverage areas set out in section 54(5) of the MSA. Each statement should provide a "detailed picture" of all steps taken to address modern slavery.
  • Signing and authorising the statement: The guidance states that it is best practice for the director who signs the statement to also be a director who sits on the board that approved the statement and the date of the board approval should be included in the statement.
  • Voluntary reporting: Organisations not caught by section 54 of the MSA may nevertheless choose to issue statements detailing the steps they have taken to prevent modern slavery. Often, this may help meet requirements of third parties in their supply chains, or to meet the standards set by potential customers in competitive procurement processes. This applies to smaller organisations who are not obliged by the MSA to produce a statement but may do so voluntarily given that there are many benefits for doing so. Commercial organisations should report annually, even if they fall below the turnover threshold in some years.
  • Timing of publication: The guidance states that the statement should be published within six months from the organisation's financial year end.

The UK's commitment to tackling modern slavery has not waned. At the recent UN General Assembly session in September, the Prime Minister announced that the UK would direct £150 million of funding at modern slavery initiatives both at home and abroad.

Indeed, a possible amendment of the MSA is being considered by Parliament that would strengthen the reporting requirement in the MSA.

The UK's stance is in line with global political commitments to abolish slavery by the G20 and as set out in the Sustainable Development Goals. It also reflects increasing efforts internationally to introduce legislation which focuses on the role that the business sector can play in combating slavery-like practices. Such legislation is already in effect in California and similar legislation is being considered in Australia.

For more information, please read the full briefing, available here.

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