Earlier this month, the U.K. Home Office announced that a measure requiring public reporting by British companies would be included in the Modern Slavery Bill that is currently being considered by the House of Commons. The Modern Slavery Bill is expected to be enacted before the next general election in May 2015.
Observers expect that the public reporting requirement will be modeled after the California Transparency in Supply Chains Act, which requires retailers and manufacturers doing business in the State of California to publicly disclose their efforts, if any, to ensure that their direct supply chains are free from slavery and human trafficking.
Observers do not expect that the public reporting requirement in the Modern Slavery Bill will be limited to retailers and manufacturers. The Home Office, in its announcement, stated that consultations will be held in order to determine what companies would be impacted by the disclosure requirements.
Companies in many industries have been subject to recent scrutiny regarding the potential for forced labor and human trafficking in their supply chains. In the United Kingdom, a recent study by the Chartered Institute of Purchasing and Supply (CIPS) found that 11% of U.K. businesses polled thought that it was “likely” that some form of modern slavery existed in their supply chains.
The inclusion of a public reporting requirement in the Modern Slavery Bill also reflects a broader trend toward requiring companies to disclose what steps that they are taking to manage the human rights impacts associated with their business activities. Consistent with the U.N. Guiding Principles on Business and Human Rights, such disclosure requirements build upon the expectation that companies should conduct human rights due diligence in order to ensure that they are taking appropriate action to prevent or mitigate human rights harms. While companies should expect to be held to account for the quality of their disclosures, ultimately it will be their actions to mitigate human rights-related risks that will be most important to key stakeholders, including legislators and policymakers.