Updated UK Modern Slavery Act Guidance Published – An In-depth Look at the Statement Content Guidance

The UK Home Office has updated its modern slavery guidance. The updated guidance – the most significant refresh since the guidance was issued almost ten years ago – is intended to explain how businesses should comply with the letter and spirit of the UK Modern Slavery Act. It discusses the Home Office’s content expectations for statements under the Act. It also provides programmatic guidance. In this post, we take an in-depth look at the Home Office’s statement content guidance. The guidance update is timely as many companies will be preparing annual updates to their modern slavery statements over the next few months. 

A Brief Overview of the UK Modern Slavery Act

The Act requires “commercial organisations” conducting business in the UK, with an annual turnover of at least £36 million, to annually produce a modern slavery statement that indicates the steps taken by the company in its most recent fiscal year to ensure that slavery and human trafficking are not taking place in its own business or its supply chains. 

The Act indicates the following suggested content areas for modern slavery statements. For companies preparing combined statements that meet other modern slavery transparency requirements, these topics are largely consistent with the required disclosures under the California, Australian and Canadian acts in this space.

• The company’s structure, its business and its supply chains;
• Its policies in relation to modern slavery;
• Its due diligence processes in relation to modern slavery in its business and supply chains;
• The parts of the business and supply chains where there is a risk of modern slavery, and the steps the company has taken to assess and manage that risk;
• The company’s effectiveness in ensuring that modern slavery is not taking place in its business or supply chains, measured against the performance indicators it considers to be appropriate; and 
• The modern slavery training available to staff.

The statement is required to be published on the company’s website, with a link to the statement on the homepage. 

Content Guidance

The content guidance addresses each of the foregoing topics, as further described below. The disclosures are broken out into level 1 and level 2 disclosures. The guidance indicates that, for companies drafting modern slavery statements for the first time, it may be more appropriate to focus on meeting level 1 disclosures but, as they become more familiar with the reporting requirements, they are encouraged to progress to include level 2 disclosures and beyond. Since most companies have been producing modern slavery statements for years, we have not indicated below whether disclosure recommendations are level 1 or level 2.

Notwithstanding the extensive statement content recommendations in the guidance, it notes that the statement can be succinct while still covering all the relevant points. Companies have discretion in determining how they present information in the statement and how much detail they provide. Among other things, the information included will be determined by the company’s sector, the complexity of its structure and supply chains, or the particular sectors and countries of its suppliers.

Structure, business and supply chains

• The company’s size, the countries in which it operates and its trading entities.
• The company’s main products and services, the sector(s) in which it operates and the volumes of goods/services it produces.
• The countries in which the supply chains operate and how goods and/or services are sourced, produced/assembled and distributed. Supply chains include both the primary value chain (i.e., the goods the company sells or the services it delivers) and the secondary value chain (activities that support the primary value chain, such as human resource management, catering and cleaning services). The supply chain also can include the labor supply chain, i.e., how and from where workers have been recruited.
• Structures and relationships with suppliers and subcontractors, such as long-term partnerships, contracts, spot purchases and direct operations versus outsourced functions.
• The labor supply chain structure, such as how workers are recruited at different stages in the supply chain, source and transit countries of migrant workers in the supply chain and involvement of agents, brokers and other labor market intermediaries.
• Informational gaps relating to supply chains, such as if the company has not been able to map beyond tier 1.
• A high-level profile of direct and indirect suppliers (e.g., subcontractors), such as location, industry and modern slavery risk management governance.
• Who at the company is responsible for identifying, assessing and responding to modern slavery and the governance structure that provides senior level oversight and management of modern slavery risk.
• How information is gathered to respond to the Act’s requirements. 
• The external stakeholders engaged with to map the company’s supply chains, such as technology companies, industry initiatives, NGOs, trade unions and government agencies, and how the company engages with these stakeholders.

Policies

• A summary of internal operating policies relevant to modern slavery (including links), such as (1) employee and supplier codes of conduct, (2) policies relating to recruitment, responsible purchasing practices, incentives to mitigate modern slavery, freedom of workers to terminate employment and freedom of movement, association and collective bargaining, (3) prohibitions on threats of violence, harassment and intimidation, compulsory overtime, child labor and  confiscation of identification documents and (4) access to remedy.  The guidance notes that addressing modern slavery does not necessarily require a standalone policy.
• How policies are communicated, implemented, monitored and enforced, including at suppliers and subcontractors, and how often policies are reviewed and updated.
• How policies are linked to international standards, such as the UN Guiding Principles, OECD Due Diligence Guidance for Responsible Business Conduct and ILO Labour Standards.
• The stakeholders the company has engaged with to develop and implement its modern slavery policies, such as buying teams, suppliers, subcontractors, trade unions, NGOs, industry initiatives and government agencies, and how the company engages with the relevant stakeholders.
• Where relevant, the number of languages policies have been translated into and how the company ensures workers, business partners and local communities can access and understand the policies.
• High level detail on relevant suppliers’ policies and practices and how these have been assessed.

Due diligence

• A summary of actions, programs and initiatives undertaken to cease and prevent modern slavery and mitigate specific modern slavery risks in the company’s operations and supply chains.
• In-depth detail on the actions taken to prevent and mitigate modern slavery in the company’s direct (tier 1) and/or indirect (beyond tier 1) supply chain.
• An outline of potential unintended consequences of any preventive approaches to managing risk and how the company plans to mitigate these.
• Supplier and worker engagement and collaboration to develop and implement actions, programs and initiatives to prevent modern slavery and minimize specific risks, beyond contractual compliance. 
• Details of the company’s existing human rights due diligence approach, policies and processes and assigned responsibilities, including consideration of how they relate to modern slavery.
• The company’s ongoing progress regarding its approach to modern slavery due diligence.
• Grievance mechanisms for workers or other ways in which they can report concerns and access remedy, including anonymous whistleblowing services and through trade unions or other worker representative groups.
• Remediation mechanisms, policies and processes, including details on (1) grievance mechanisms to assist whistleblowing or reporting of suspected incidents of modern slavery, (2) the languages in which policies and processes are available and accessible, (3) how the company has engaged with workers, suppliers, subcontractors, trade unions, NGOs, industry initiatives and government agencies to ensure grievance mechanisms are accessible, effective and safeguard workers from retaliation, (4) how remediation processes in the company and its supply chains integrate with relevant judicial remediation processes, (5) how workers and/or modern slavery survivors have been consulted in developing remediation policies/processes in the company and its supply chains and (6) how the remediation mechanism has been communicated to relevant stakeholders.
• Incidents of modern slavery found in the company’s operations and supply chains, including the total number of incidents and what steps were taken to remedy them.
• The results of any remediation processes undertaken at the company and in its supply chains, including (1) the number/proportion of workers receiving remediation, (2) the outcome from remediation and whether the remedy was considered satisfactory, (3) the outcomes of individuals who have been through judicial processes and (4) how the company has worked with suppliers/stakeholders to provide remediation in response to modern slavery incidents.
• How the company has considered whether its business model and business-related key performance indicators may cause, contribute or directly result in modern slavery in its operations and supply chains.

Assessing and managing risk

• When the risk assessment was carried out and how often it is updated.
• The individuals and/or departments responsible for the risk assessment.
• How modern slavery risks are identified and assessed and the sources used, such as desk-based research and key third-party sources, audits or other assessments, self-assessment tools, engagement with workers, trade unions and NGOs, supplier questionnaires, digital tools, industry tools, engagement with competitors, data collected through early warning systems (such as hotlines) and grievance mechanisms.
• The highest priority modern slavery risk to workers in the company and its supply chains, including relating to goods and/or services supplied, country, region, sector, stage of supply chain, worker vulnerabilities (e.g., women, migrants, refugees, children or other vulnerable groups) and the type of risk identified (e.g., forced labor and deceptive recruitment).
• The complete list of modern slavery risks regularly reviewed by the board or equivalent.
• Leverage to address priority risks.
• Engagement with internal and external stakeholders to identify, understand and prioritize current and future risks. This includes stakeholders such as workers, local communities, buying teams, suppliers, subcontractors, trade unions, NGOs, industry initiatives and government agencies. 
• Continuous direct engagement with workers/worker representatives to help identify risk.

Monitoring and evaluation

• Goals for ensuring year-over-year progress in identifying, preventing and responding to modern slavery, including goals tailored to sector-specific risks.
• Short-, medium- and long-term plans to achieve the desired goals.
• Key performance indicators to measure progress towards goals and who at the company is responsible for setting goals and KPIs and tracking their implementation.
• How quantitative and qualitative data is used to assess the effectiveness of the company’s  measures.
• The outcomes of the company’s approach.
• How findings from monitoring and evaluation have influenced business practices, such as contract management.
• Success stories and case studies that demonstrate continuous improvement in the company’s response to modern slavery.
• How the company works with internal and external stakeholders to ensure effective monitoring and evaluation.
• Direct worker engagement to measure the impact of policies, programs and initiatives.

Training

• An outline of the training delivered to internal and external stakeholders to support the company’s response to modern slavery, including the content, objectives and outcomes of training delivered to the entire organization, frontline staff, those most at risk of exploitation, human resources staff, executive-level staff, procurement staff, suppliers and the wider community (including in each case numbers trained).
• How modern slavery training is part of the company’s ongoing training package.
• Frequency of training.
• How training has been tailored to different roles/responsibilities and sector-specific risks in supply chains. 
• How training is reviewed and updated.
• The materials used in the modern slavery training program, such as awareness-raising campaigns.
• The resources and tools provided to staff members and suppliers to improve their practices, such as templates for ethical recruitment or guidance on conducting risk assessments and understanding the impact of purchasing practices on modern slavery risk.
• How the training was developed and delivered, including whether it was developed internally or by an external organization. 
• Involvement of workers, NGOs, trade unions and, where appropriate, those with lived experience, in developing raining programs.
• Training activities undertaken by suppliers, and in which areas of the supply chain.

Continuous improvement

• Companies should highlight areas of change and improvement in each annual modern slavery statement so that stakeholders can understand year-over-year progress. The guidance includes examples for each of the topical areas above.

Selected Other Recommendations

Joint statements

• If the statement is a joint statement or a report covering the activities of multiple entities, it should clearly indicate each entity that is covered by the statement.
• The joint statement should explain the general consultation process contributing to the development of the joint statement.

Registry submission

• The government encourages all companies to upload their modern slavery statements to the government’s voluntary modern slavery statement registry.

Looking Ahead

Strengthening of the Act seems to always be just around the corner. See this Ropes & Gray Alert from 2020. 

More recently, in January 2024, the House of Lords appointed a committee to consider the effectiveness and impact of the Act. In October, the committee published a report of its findings, including a number of recommendations for consideration in reforming the Act. These recommendations – some of which date back to the last decade – include, among others: 

• Required statement topics, including a description of how the company has assessed the effectiveness of its actions.
• Mandatory publication of statements on the online registry.
• Mandatory due diligence.
• A forced labor import ban.

All of the foregoing recommendations borrow from or align with requirements in other countries. 

In December, the government responded to the committee report, indicating that many of the recommendations would be accepted in some form. However, when and how are still open questions.

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