Overview
On March 11, 2021, the Home Office launched an online registry for organisations required to publish annual modern slavery statements under Section 54 of the Modern Slavery Act 2015 (“MSA”). The launch of the registry makes good on one of a series of commitments made by the UK government in October 2020 to strengthen the transparency in supply chains provision of the MSA, which we discussed in greater detail in a previous blog post (here).
Commercial organisations that carry on all or part of a business in the United Kingdom and have a total annual turnover of £36 million or more currently are required to publish a modern slavery statement reporting on the steps that they have taken during the financial year to ensure that slavery and human trafficking are not taking place in their business or supply chains.
The UK government’s 2020 UK Annual Report on Modern Slavery reported that 17 percent of covered organisations had not published a modern slavery statement and were unlikely to be covered by a group modern slavery statement. One goal of the new registry is to enable the UK government to more effectively monitor compliance with the reporting obligations imposed by the MSA.
A requirement that covered organisations must submit their annual modern slavery statements to the new registry was among the proposals announced by the UK government in October 2020 to strengthen the transparency in supply chains provision of the MSA. Legislative changes to the MSA will be required to give effect to this measure. While the UK government repeated its commitment to making the changes “as soon as parliamentary time allows” in its announcement of the registry’s launch, a specific legislative timetable still has not been set.
In the meantime, the UK government has sought to motivate voluntary use of the new registry by submitting the UK government’s current modern slavery statement to the registry and strongly encouraging all covered organisations to follow its lead as a means of demonstrating their compliance with the MSA’s reporting requirements.
The new registry also is intended to improve transparency around the steps businesses and public bodies take to combat modern slavery. The UK government hopes that making this information more easily available will empower consumers, investors and civil society to hold organisations accountable for management of their modern slavery risks by analysing and comparing the steps organisations are taking across sectors and over time to identify and address modern slavery risks in their operations and supply chains. In a statement announcing the launch of the registry, the Home Office stated that “[t]he registry will enhance transparency and accessibility, by bringing modern slavery statements together in one place and will make it easier to find and compare them.”
As businesses and public bodies start to populate the registry with their modern slavery statements, civil society, the media and other interested groups likely will use the registry as a tool to more easily access information about whether and to what extent covered organisations are complying with their reporting requirements and appropriately identifying and mitigating their modern slavery risks.
The launch of the registry reflects the UK’s continuing efforts to tackle modern slavery. The increased threat of harsher public scrutiny of organisations subject to the transparency in supply chains provision of the MSA – whether for failing to take appropriate measures to combat their modern slavery risks or submit modern slavery statements to the registry – underlines the need for organisations to dedicate serious thought and resources to these issues. While these developments are most immediately relevant to companies that are themselves subject to the reporting requirements under the MSA, investors also will need to be familiar with and alert to these issues when deciding whether to invest in large companies located or operating in the UK.
