Tougher modern slavery reporting requirements

Following an Independent Review (“the Review”) of the UK’s Modern Slavery Act 2015 (“MSA”), the Home Office launched a public consultation in July 2019. One of the Review’s key focuses was section 54, which requires that commercial organisations that supply goods and/or services and have an annual turnover of £36m+ produce a modern slavery and human trafficking statement every financial year. It set out to address transparency within organisations' supply chains and to bolster the enforcement regime to ensure that appropriate penalties were issued to non-compliant businesses. The Review then led to the Government’s Transparency in Supply Chains Consultation. This invited consideration from consumers and businesses, of which PwC was one of the respondents.

Following a review of the responses, the Government published its proposed amendments to the MSA last month. These include:

• Mandating that specific topics be reported on by obliged entities - this measure is intended to improve compliance levels and establish greater consistency in reporting. Additionally, this may assist obliged entities in identifying which procedures, due diligence and training is required to achieve compliance.
• Introducing a single reporting period of 1 April - 31 March - synchronising the reporting procedure will clarify the process for obliged entities and may relieve administrative uncertainty.
• Creating a central online registry - this is set to be launched in early 2021 and will ensure that all published statements are available in one place.
• Extending the section 54 reporting obligations to public bodies - those public sector bodies with £36m+ annual turnover will now also be required to publish a statement. By aligning public and private sector reporting requirements the aim is to heighten accountability across all supply chains and encourage collaboration through group statements and across the sectors. Guidance for public sector bodies will be published to help determine applicability.

Next steps

The amendments to the MSA will take some time to come into force. However, with the changes to organisations’ obligations now confirmed, it would be prudent to consider how these amendments will impact the preparation and drafting of your organisation’s next statement. Particular focus should be spent on the six, soon to be mandatory, reporting areas.

Our legal team can help organisations prepare for the changes to the MSA and the new obligations under it. From conducting a modern slavery ‘health-check’ to the preparation of tailored modern slavery compliance training for your employees, our services help our clients to remain compliant and adhere to best practice standards.

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