Modern Slavery Act (MSA)

What is the Modern Slavery Act?

The Modern Slavery Act is an Act of the Parliament of the UK. The Act received royal assent on 26 March 2015 and came into force on 29 October of the same year. It is the first piece of UK legislation – and the first in Europe – to focus on prosecuting and preventing acts of modern slavery in supply chains.

Modern slavery covers an array of issues including human trafficking, child labour and cases of debt bondage. In practice, the Modern Slavery Act makes companies accountable for cases of labour abuses and slavery across the entire value chain.

The Act was introduced to ensure that no form of slavery is linked to UK services and products and to show investors, employees and consumers that more transparent and proactive stances are being taken by businesses to tackle modern slavery. The UK Home Office has said it is not acceptable for any eligible companies to avoid the Act, and statements of compliance must be issued annually.

Why is the Modern Slavery Act important? 

The Act ensures that UK businesses are not benefitting – willingly or otherwise – from modern slavery. The International Labour Organisation (ILO) estimates there are more than 21 million people across the world suffering from some degree of forced labour – the term used to describe all forms of modern slavery.

In the UK alone, an estimated 13,000 people are working under modern slavery conditions across an array of sectors ranging from brothels and cannabis farms to the agriculture and hospitality sectors. According to the UN, modern slavery is the second-largest criminal industry in the world, and the ILO claims that $150bn in annual profits are sourced from it.

Who does the Modern Slavery Act apply to?

Any business or business subsidiary with a global turnover of £36m or more that supplies goods and services to the UK, or is based in the UK, now has to publish an annual statement of compliance with the Modern Slavery Act.

Foreign companies and subsidiary arms that carry out business actions or transactions in the UK will also have to comply with the legislation, along with any overseas arm of a UK company.

How does the modern slavery statement process work?

Businesses that are covered by the Act will have to publish an annual slavery and trafficking statement. The business must ensure the statement is made visible on an easily-accessible and prominent part of the company website, and it must be signed off at the boardroom level.

There is no rigid template for any company to follow when producing a statement, but it must set out the steps that a business has taken to ensure that modern slavery isn’t present in any part of its operational business and supply chain.

What are the benefits of complying with the Modern Slavery Act?

The Modern Slavery Act is an effective piece of legislation for raising corporate awareness of modern slavery. The fact that the modern slavery statement must be approved at boardroom level means the issue – which may have previously been overlooked – will gain the attention of the individuals responsible for setting the business agenda.

In an era of heightened public scrutiny – epitomised by the strong reaction to a recent TV programme highlighting human rights abuses found in supply chains of high-street retailers – the Act can help to enhance a company’s reputation. Embedding a modern slavery statement as best practice could also lead to greater trust from consumers, suppliers and the workforce.

What happens if a company fails to comply with the Modern Slavery Act?

Companies that fail to comply with the Modern Slavery Act could be subjected to a High Court injunction that orders them to comply, which would be accompanied by a fine.

An ‘unlimited’ fine is possible if a company does not submit an annual modern slavery statement. However, the Home Office – the body that oversees the statements – is yet to issue any legal enforcements, meaning the risks up to this point have been entirely reputational.

These reputational risks are of great importance, though, as any company that fails to produce a statement or produces one with minimal or no level of ambition could face external pressure from campaigners for avoiding the issue or treating it as a ‘tick-box’ exercise.

Companies that reach out to consultants to help them produce a modern slavery statement could also suffer reputational risks if they don’t move beyond compliance. Consultants may offer the same, standardised template to numerous companies, leaving little difference in the statements of various businesses across different sectors which will again appear to be a ‘tick-box’ approach.

Related items

Some report suggest that business compliance with the Act still falls below 50%

Big businesses face mandatory digital modern slavery reporting

The UK Government has made the first major changes to the Modern Slavery Act since its introduction in 2015, extending requirements to public bodies including local authorities and tightening rules for big businesses.

Pictured: A small cobalt mine in the DRC. Image: Fairphone

Businesses including Glencore launch joint bid to improve conditions in cobalt supply chains

A coalition of businesses including Signify, Glencore and Fairphone have launched a joint initiative to improve the economic, working and social conditions of those working in the cobalt supply chain.

The report adds that Scope 3 emissions account for 90% of BAT’s total carbon footprint

British American Tobacco targets carbon neutrality by 2030

British American Tobacco (BAT) has announced a new ambition to achieve carbon neutrality by 2030 and eliminating unnecessary single-use plastics by 2025, having slashed emissions by almost 50% since 2000.

2016 figures estimate there are 13,000 victims of modern slavery in the UK

UK Government publishes statement to tackle modern slavery across its supply chain

The UK has become the first country to publish a statement outlining how the Government will tackle modern slavery across its supply chain and spending measures.

The Investor Alliance for Human Rights has penned a letter to the 95 companies calling for the businesses to take decisive action before the next assessment of the benchmark

Investors write to businesses calling for action on human rights

Hundreds of investors have written to global companies deemed to be performing poorly on human rights indicators, calling for immediate action to improve standards across operations and value chains.

The analysis ranked corporates across four high-risk sectors, including agriculture

Half of corporates unable to prove they are protecting human rights , report finds

An analysis of 200 of the world's biggest corporation has found that 95 are unable to prove they are taking action to protect and improve human rights for their direct employees, supply chains and the communities they serve.