Electronic Supply Chain industry research from the Z2Data Team

What Is the UK Modern Slavery Act?

Find out more about the UK's Modern Slavery Act and how it affects companies and entities around the world.
Chase Correll
February 15, 2022

The UK Modern Slavery Act was approved by the UK Parliament in 2015. Individual trafficking for the aim of modern slavery is prohibited under the law.

The law compels enterprises to provide declarations verifying efforts taken to guarantee that slavery and human trafficking do not occur on their premises.

Knowing the terms under which the manufacturer of your components operates is essential in order to avoid any problems that may occur due to a lack of compliance on their part, which could impair the manufacturing of your goods.

Who Does the Law Apply To?

This law applies to any firm doing business in the United Kingdom with yearly revenue of $40.9 million or higher. The regulations apply to the activities of these firms as well as their supplier networks.

The requirements of the Modern Slavery Act are divided into two key action items:

  1. Take steps to detect, prevent, and reduce modern slavery in your operations and supply networks.
  2. Within six months after the end of your company's fiscal year, publish an annual statement to report on these initiatives.

2020 Updates to the Modern Slavery Act

The UK government agreed to certain additional Modern Slavery Act provisions in 2020. The new provisions required businesses to tackle specific topics in their modern slavery statements, as well as submit their statements on a new Government platform.

Many of the additional criteria will become required once the Act's amendments are approved by the UK Parliament.

The specific actions businesses must do after the 2020 update are as follows:

Businesses having a revenue of more than $40.9 million and public bodies with a budget of more than £40.9 million will be required to produce an annual modern slavery statement. Additionally, the statement must explain the efforts taken by the organization that year to detect, prevent, and minimize modern slavery in their operations and supply networks.

Six recommended areas must be covered in a company’s or public entity’s statement:

  1. Structure of the organization and supply chain
  2. Assessment and management of risks
  3. Employee education on contemporary slavery and human trafficking
  4. Modern slavery and human trafficking policies
  5. Efforts made to prevent contemporary slavery
  6. Processes of due diligence

Companies and public bodies that are unable to report on any of the six areas above must include a letter of explanation detailing their inability to do so.

The annual modern slavery statements must be published by September 30 each year at the UK’s registry site.

New Amendment Proposed in 2021

A Modern Slavery (Amendment) Bill was introduced in the House of Lords on June 15.

The Bill proposes new disclosure and substantive compliance requirements, as well as sanctions for failure to comply with certain provisions of the Act.

What the Bill Would Change

The Bill would modify the Act to make it a crime to provide a false statement on modern slavery and human trafficking.

A person who is accountable for a modern slavery statement would constitute an offense under a new section of the Act if information in the statement is false or incomplete in a substantial particular, and the person either knows this or is irresponsible as to whether the statement is false or incomplete.

The bill proposes a person would be liable for a statement if they are a director (for a company), partner (for a partnership), or member (for a limited liability partnership).

If the UK adopts this bill, then additional pressure would be put on companies and public entities to publish accurate slavery statements.

Another new section of the proposed bill would make it a violation for a company to continue to source from a supplier or sub-supplier that fails to comply with minimum transparency requirements after receiving a formal warning by the Independent Anti-slavery Commissioner.

Will the Bill Pass?

The Bill must be approved by both Houses of UK Parliament. It is also possible that it will be altered and changed as time goes on, as has been the case with modern slavery and required human rights due diligence laws in the majority of regions.

The Bill may also succumb to legislative limitations. The Bill is classified as a “private member’s bill,” which means it has been introduced into the legislature by a legislator who is not acting on behalf of the executive branch.

This attribute is key because there is a restricted amount of legislative time available to private members’ bills and they also traditionally lack cross-party support. Due to this, private members' bills are exceedingly unusual to get through both Houses of Parliament.

Stay Up to Date With The Modern Slavery Act

With Z2Data's descriptive compliance reports and documentation sourcing, you can easily stay up to date with the latest regulations like the UK Modern Slavery Act. Request a free trial with Z2Data's Part Risk Manager.

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