Olivier Roth discusses how solicitors can help businesses produce effective Section 54 statements as part of their obligations under the Modern Slavery Act.   

In July 2016,  the prime minister addressed the United Nations on the subject of modern slavery, calling it ’the greatest human rights issue of our time’. It is two and a half years since the Modern Slavery Act came into force, and eighteen months since companies were required to publish a Section 54 (S54) modern slavery statement. 

The media has taken a strong interest in modern slavery - the Evening Standard has created a pledge that companies have signed up to, and Thomson Reuters created a Stop Slavery Award, celebrating companies that have contributed to the eradication of slavery.

Yet it seems that many companies are choosing to look the other way. The TISC Report and the Business and Human Rights Resource Centre, the two main repositories of S54 statements in the UK, estimate that out of 19,633 UK organisations that are required to comply with the Act, only 5,554 have published statements to date. This leaves well over two thirds of organisations that have not. This is not only morally problematic, it raises questions as to the effectiveness of the Modern Slavery Act’s strategy of using a voluntary, public shaming approach.

To be fair, it is not all negative. Victims are increasingly being referred to the National Referral Mechanism, the UK’s system of support for victims of modern slavery. Numbers have risen from 2340 in 2014 to 3805 in 2016. The number of criminals being prosecuted and convicted is also increasing.

In an analysis of FTSE 100 companies, the Business and Human Resource Centre has identified a cluster of leading companies taking robust action, such as Marks & Spencer, Sainsbury (J), Vodafone or and Unilever. They explained the risks identified in their supply chains, whether these were location based or sectoral, implemented large scale reviews of their practices, and collaborated with experts and peers to implement best practice. They have been honest and transparent about their efforts to tackle modern slavery in their supply chains, and about the work that remains to be done. Out of those 100 companies, only two haven’t produced a statement.

Even amongst companies that have published a S54 statement, the statement itself has been rather lacklustre. 

  • 69 per cent of the companies provide no information on whether their actions were effective in addressing modern slavery risks.
  • 43 per cent of the companies failed to meet all three of the minimum requirements (approval by the board, signature from a director, and publication on the company website). 
  • 28 company statements did not explicitly say they were approved by the board (or equivalent). 
  • 9 company statements were not signed by a director (or equivalent). 
  • 16 companies did not have a link to the statement on the homepage of the company website. 

These are the basic legal requirements stemming from the MSA, which are not especially onerous.

You may choose to look the other way but you can never say again that you did not know. - William Wilberforce

There is a strong case to be made to the UK Government about improving monitoring and enforcement mechanisms to ensure companies feel pressure to comply, and are penalised for failing to do so. A public list of the companies required to produce statements under the Act would facilitate monitoring by civil society. Providing clear incentives for corporate action, such as a requirement that bids for public contracts should be dependent on companies demonstrating due diligence in their operations and their modern slavery statements, would also incentivise good behaviour.

The Law Society has made recommendations to government as to how it could improve reporting, access to remedy for victims, incentives and sanctions. For example, working with European partners and governments to ensure early transposing of the Non-Financial Reporting Directive into national law, thereby providing the highest levels of accountability regarding human rights due diligence. Or, with regards to victims and remedies, improve extraterritorial access to civil remedies for victims of corporate abuse by introducing an amendment to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) to ensure that it is financially feasible for law firms to take on such cases, and that victims receive fair compensation.

There is a role to play for solicitors in reminding businesses of their obligations under the Act. Solicitors are ideally placed to conduct reviews into practices and supply chains, and to produce Section 54 statements. They might be the final push that some companies need in order to get their act together.