UK House of Lords Select Committee calls for the introduction of mandatory human rights due diligence

On 16 October 2024, the UK House of Lords Select Committee (Committee) on the Modern Slavery Act 2015 (MSA) published a report (Report) setting out the conclusions of its parliamentary inquiry into the MSA's impact and effectiveness. The Report recommends that the UK Government implement significant changes to the UK's modern slavery regime, including by introducing legislation obliging in-scope companies to conduct modern slavery due diligence, and considering import bans applicable to certain producers. This post summarises some of the Report's key conclusions.

Background

The Committee was first appointed on 24 February 2024 to review the effectiveness of the MSA. The MSA introduced obligations on certain businesses to report on forced labour risks in their operations and supply chains, as well as on steps taken to address those risks. It also consolidated and updated related areas of UK law, including UK criminal law relating to forced labour.

As outlined in our previous post (here), the Committee made its first public call for written evidence on 28 February 2024. The Committee indicated that it would focus on the MSA's operation and enforcement, as well as on the MSA's relationship with more recent legislation, and whether it remained current considering developments in the UK and internationally.

The Report's recommendations

The Committee's Report recommends a number of changes aimed at making the UK's modern slavery regime "world-leading again". These are set out in chapters concentrating on issue areas such as the impact of immigration legislation on action against modern slavery and human trafficking, labour exploitation in the care sector, the enforcement of the MSA, and the role of the Independent Anti-Slavery Commissioner.

The Report also includes a chapter dedicated to examining the efficacy of the MSA in the context of business supply chains, which is the focus of this post. The Report's principal recommendations on this topic centre on: (i)  strengthening the MSA's existing reporting requirements, (ii) the introduction of new modern slavery due diligence obligations, and (iii) the potential introduction of import bans.

Strengthened supply chain reporting requirements

Section 54 of the MSA requires any commercial organisation carrying on a business (or part of a business) in the UK with a turnover of more than £36 million to prepare an annual modern slavery statement. The statement must cover the steps the organisation has taken to ensure slavery and human trafficking are not taking place within "any part" of its business or supply chains, or expressly state that no such steps have been taken.

The MSA does not however prescribe detailed further requirements for the content of modern slavery statements, and the use of the UK Government's Modern Slavery Statement Registry for their publication (see our previous post here) remains voluntary. The Report identifies that the modern slavery statements published since the MSA's enactment have been of "inconsistent quality and content", which "obfuscates the transparency section 54 [MSA] was intended to provide". The Report also raises concerns regarding a lack of enforcement of reporting requirements, as well as gaps in the coverage of organisations subject to them.

The Report consequently recommends that the UK Government take steps including:

• making publication of modern slavery statements on the Modern Slavery Statement Registry mandatory, while setting out prescribed content including "a description of how the organisation has assessed the effectiveness of its actions" against modern slavery and human trafficking;
• introducing "proportionate sanctions" for organisations which fail to comply with supply chain reporting requirements;
• extending section 54 MSA to cover all public sector bodies with an equivalent annual budget to in-scope commercial organisations; and
• improving cross-departmental coordination on the enforcement of the UK Government's modern slavery strategy.

A number of these changes were contemplated in legislative proposals published by the UK Government in September 2020 (see our previous post here) which were not ultimately pursued.

Modern slavery due diligence

The Report makes the significant recommendation that the UK Government "introduce legislation requiring [in-scope] companies… to undertake modern slavery due diligence in their supply chains and to take reasonable steps to address problems". The Committee explains that it has "contemplated what the threshold should be, if any, for the due diligence legislation that we have recommended" but does not make an express recommendation in this regard, except to recommend that the threshold should be consistent across all business sectors.

The Report refers to foreign legislation prescribing mandatory human rights due diligence, including the French Duty of Vigilance Law and the EU Corporate Sustainability Due Diligence Directive (CS3D) and recommends that a UK modern slavery due diligence obligation should be made "compatible with the standards of the international landscape to make compliance easier".

Import ban

Additionally, the Report calls upon the UK Government to "consider introducing import laws which ban goods being brought into the UK if they are produced by certain companies known to use forced labour". The Report emphasises however that such laws "should not be targeted at particular countries", in light of the potential "significant foreign policy implications".

Conclusion

If implemented in full, the Committee's Recommendations would represent an important shift in the UK's approach to modern slavery and would see the introduction of a considerably strengthened regime relative to the MSA's current requirements.

The introduction of mandatory modern slavery due diligence would align the UK more closely with the global trend towards the introduction of mandatory human rights due diligence requirements. Businesses preparing for the implementation of the EU CS3D's human rights and environmental due diligence regime (see our previous post here) should continue to keep abreast of UK developments, given the potential for  due diligence obligations in the UK to overlap with obligations elsewhere, particularly in the EU.