Modern Slavery Act: New offences proposed

A Private Members' Bill (the "Bill") has been introduced to the House of Lords with a view to amending the UK Modern Slavery Act 2015 (the "Act"). The Bill seeks the introduction of new minimum standards of transparency and offences for failure to meet such standards and for providing false or misleading information in modern slavery and human trafficking statements published under section 54 of the Act. 

Minimum standards of transparency - new obligations

The Bill introduces a new power for the Independent Anti-Slavery Commissioner to issue formal warnings to commercial organisations failing to meet the requirements of disclosure and transparency. Which is a rather neat way, when looking at the newly defined term "requirements of disclosure and transparency" of introducing what are effectively new reporting and operational obligations. 

These require commercial organisations to: (i) publish and verify information about the country of origin of sourcing inputs in its supply chain; (ii) arrange for credible external inspections, external audits and unannounced external spot-checks (it is unclear on/of what/whom); and (iii) report on the use of employment agents acting on behalf of an overseas government. 

There is no indication of where the new information required under (i) and (iii) is to be reported, nor any indication of what constitutes a "credible" external inspection. The notion of "unannounced external spot-checks" is also likely to cause some consternation amongst businesses and it is unclear how this will be implemented practically if legislated for. 

Modern slavery statement - new offences

The Bill also introduces two new offences under the Act. 

The first of these is the offence of providing information in modern slavery statements that is knowingly or recklessly false or materially incomplete. There is, however, a defense for those who takes all reasonable steps to ensure the statement is corrected and inform the Independent Anti-Slavery Commissioner as soon as practicable after becoming aware that it contains false or materially incomplete information.

The second is the offence of continuing to source from suppliers (or sub-suppliers) which fail to demonstrate the minimum standards of transparency after having been issued one of the new formal warnings mentioned above by the Independent Anti-Slavery Commissioner. 

Interestingly, both of these offences can only be committed by individuals (directors or equivalent in the case of body corporates). Even more interestingly, the fines for those found guilty on indictment are tied to the global turnover of the individual's commercial organisation - with the fine being 4% of global turnover, to a maximum of £20 million. Oh, and/or 2 years imprisonment in the case of the false information offence. 

Takeaways

The Bill represents an attempt to give the section 54 reporting requirement under the Act some bite, perhaps in light of the developments on human rights due diligence regimes developing around Europe that appear to be leaving the UK in their dust. Although given that most Private Members' Bills do not progress very far unless the government supports them, one might also skeptically suggest it is an attempt to push the Government into legislating for the changes to the reporting regime promised in 2020... Only time will tell if either the Bill and/or the Government's changes will progress.