We have previously reported on the independent review of the Modern Slavery Act 2015 - which concluded in May 2019 with its Final Report and 80 recommendations. The UK government responded to the Final Report by launching a consultation on transparency in supply chains later that year, and finally published the results of that consultation in September 2020.
In a response, which goes beyond the Governments consultation results, on 15th June 2021, the Modern Slavery (Amendment) Bill 2021 (the “Bill”) sponsored by crossbench peer, Lord Alton of Liverpool, began its journey through the House of Lords.
The Bill seeks to amend the Modern Slavery Act 2015 (the “Act”) in a number of key areas:
- To prohibit the falsification of slavery and human trafficking statements – and make it a criminal offence to do so.
- To improve standards by establishing minimum standards of transparency in supply chains in relation to modern slavery and human trafficking.
- To prohibit companies using supply chains which fail to demonstrate minimum standards of transparency – and make it a criminal offence to continue to use such identified supply chains.
We don’t yet know whether the Private Member’s Bill will make it onto the statue books, but if it does, we have collated the key points to consider and note them below, the Bill does however show the continued pressure in this area for businesses to make changes and improve supply chain transparency:
New powers for the Anti-Slavery Commissioner
As many readers will recall, the Act created the UK’s first Independent Anti-Slavery Commissioner post in a bid to spearhead the UK’s fight against human trafficking and modern slavery. Dame Sara Thornton DBE QPM, a police officer with 33 years’ experience, was duly appointed in 2019 to take on the new role.
The Bill seeks to widen the Commissioner’s powers by introducing a formal warning process whereby the Commission can issue such warnings to any commercial organisation that fails to meet the requirements of disclosure and transparency.
What are the proposed requirements of disclosure and transparency?
The Bill seeks to require that all commercial organisations must:
- Publish and verify information about the country of origin of sourcing inputs in its supply chain;
- Arrange for credible external inspections, external audits, and unannounced external spot-checks; and
- Report on the use of employment agents acting on behalf of an overseas government.
Minimum standards of disclosure and transparency
The Bill seeks to prohibit companies from using suppliers who fail to demonstrate the UK’s minimum standards of disclosure and transparency by introducing new sanctions for those who contravene the rules.
In this regard, the Bill sets out that an offence shall have taken place if a commercial organisation “continues to source from suppliers or sub-suppliers which fail to demonstrate minimum standards of transparency after having been issued a formal warning by the Independent Anti-Slavery Commissioner.”
Section 54ZB (2) sets out the proposed sanctions for those held to be guilty of an offence:
- On conviction on indictment, to imprisonment for a term not exceeding 2 years, to a fine amounting to 4% of global turnover of their commercial organisation, to a maximum of £20 million, or to both;
- On summary conviction in England & Wales, to imprisonment for a term not exceeding 12 months, to a fine, or both;
- On summary conviction in Scotland, to imprisonment for a term not exceeding 12 months, to a fine not exceeding the statutory minimum, or both;
- On summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months, to a fine not exceeding the statutory minimum, or both.
Slavery and human trafficking statements
The Bill seeks to prohibit the falsification of slavery and human trafficking statements by setting new standards and introducing new criminal sanctions and fines for failure to meet those standards.
Who is required to make a statement?
- Corporate bodies: director(s) or equivalent.
- Limited liability partnerships: a member of the organisation.
- Other kinds of partnerships: a partner of the organisation.
What will be considered an offence?
The Bill states that “a person who is responsible for a slavery and human trafficking statement commits an offence if information in the statement is false or incomplete in a material particular, and the person either knows it is or is reckless as to whether it is.”
It is important to note that those who publish materially incomplete statements will be considered guilty of an offense, not just those who publish false statements. The Bill seeks to introduce a standard which sees the statements being taken seriously and given due consideration by those in charge of UK organisations.
Those who are held to be guilty of an offence will be subject to the same criminal and financial sanctions are those set out in Section 54ZB (2) and detailed above.
Whether the sanctions proposed under the Bill are introduced in their entirety remains to be seen at the present time. What is clear, however, is the change in attitude towards modern slavery and human trafficking in the UK via the suggested introduction of penalties extending so far as to imprisonment for false or materially incomplete statements, in addition to businesses continuing commercial relationships with suppliers or sub-suppliers that do not meet the UK’s standards.
There has never been a more important time for UK companies to stop, take stock of their current supply chain practices and in the first instance, ensure they comply with the Act. We will continue to monitor the developments of the Bill and provide timely updates as required.
How we can help
Should you have any queries in relation to your working practices and compliance with the Modern Slavery Act 2015 or the changes proposed under the Modern Slavery (Amendment) Bill 2021, please do not hesitate to get in touch with our specialised Regulatory & Compliance team.
This article was co-written by Kirsty Fryer, Trainee Solicitor.