On January 22, an independent commission of three parliamentarians established to review the UK’s Modern Slavery Act released the second of four installments of its report suggesting amendments and improvements to the 2015 law. This installment of the report covers compliance with the Act and quality of the modern slavery statements companies subject to the law are required to submit. The UK Minister for Crime, Safeguarding and Vulnerability, Victoria Atkins MP, ordered the review in July to ensure that businesses are doing enough to combat modern slavery in their supply chains. The order was prompted by the widespread sense that many businesses subject to the Act are not fully complying with it, and that extensive amendments are needed to strengthen it.
According to experts from a range of sectors consulted during the review, one cause of non-compliance with the Act is its lack of enforceability. The review’s recommendations would give the Act teeth, allowing Government to enforce it by issuing warnings, fines, court summons, and even disqualifying certain individuals from serving as corporate directors. If enacted, these measures would be a strong step towards improving compliance with the Act. As it stands, only 57 percent of 19,200 companies required to comply with the law have issued modern slavery statements to date. The review also suggests the Government create a free and publicly available repository of the statements. This would allow consumers and watchdog groups to more effectively monitor compliance.
The review found that another important cause of non-compliance is companies’ attitudes towards issuing modern slavery statements. Many businesses treat the statements as a corporate social responsibility check box, rather than meaningfully examining their supply chains for evidence of modern-day slavery. To increase businesses’ sense of obligation to create high-quality statements, the review recommends requiring them to reference their modern slavery statements in annual regulatory filings that are currently required under UK law. In addition, the review suggests making the six areas of reporting under the Act mandatory and providing a template for such statements to increase consistency and comparability.
The review commission’s report provides strong suggestions for how to improve and strengthen the Modern Slavery Act. The implementation of its recommendations by Parliament would almost certainly increase compliance with the Act by rendering it more enforceable, and by also providing measures to ensure compliance. Even so, top-down enforcement is not the only way to improve compliance with the Modern Slavery Act and other similar laws. Peer leadership can also help foster better compliance with such laws, as consumers (especially millennials) increasingly evaluate the social responsibility records of the companies they choose to patronize. Correspondingly, those brands that are ahead of the game in complying with laws such as the Modern Slavery Act may enjoy advantages in the marketplace that draw the notice of their competitors.
The remaining two sections of the report are due to the Home Secretary by the end of March. It will then be up to the government of Prime Minister Theresa May to introduce legislation in Parliament to implement some or all of the review’s recommendations.