Hardly Soft Law: The Modern Slavery Act 2015 and the Trend towards Mandatory Reporting on Human Rights

By Lindsay, Rae; Kirkpatrick, Anna et al. | Business Law International, January 2017 | Go to article overview

Hardly Soft Law: The Modern Slavery Act 2015 and the Trend towards Mandatory Reporting on Human Rights


Lindsay, Rae, Kirkpatrick, Anna, Low, Jo En, Business Law International


Introduction

Governments are increasingly imposing disclosure requirements on businesses in an effort to encourage practices that will help stamp out human rights abuses. Such transparency provisions are designed to improve access to information about what companies are doing (if anything) to identify and address the risks of human rights impacts that arise from business operations. The intention is to promote better accountability regarding the direct or indirect involvement of businesses in human rights abuses, and exert pressure on businesses to improve the efficacy of their efforts to tackle these issues.

A recent example of such transparency measures is the United Kingdom's Modern Slavery Act 2015 (MSA), a domestic measure with international reach. The section below outlines the requirements of the MSA and its policy objectives, and highlights some themes emerging from practice under the MSA to date. Through a comparison of the MSA with other similar measures, the article draws some conclusions on international policy trends relating to mandatory reporting measures. The section titled 'Tools to assist businesses in responding to mandatory human rights reporting requirements' reviews the United Nations Guiding Principles on Business and Human Rights (UNGP) as a guide for businesses seeking to act in accordance with both the spirit and the letter of mandatory reporting requirements on human rights. Finally, the article considers some of the challenges and opportunities for businesses in this area, and the potential effectiveness of mandatory reporting requirements in promoting the protection of human rights.

UK Modern Slavery Act

The objective of the MSA is to stamp out 'modern slavery', a term encompassing slavery, servitude, forced and compulsory labour, and human trafficking (referred to in this article as 'modern slavery'). Modern slavery is a worldwide problem on an enormous scale.1 The MSA aims to improve UK law enforcement in the area by consolidating existing slavery-related criminal offences and increasing the penalties for committing offences. It also introduces new measures designed to provide the courts with tools to prevent modern slavery and to assist victims of such crimes, and establishes an Anti-Slavery Commissioner tasked with overseeing the prevention, detection, investigation and prosecution of offences. For businesses, a major innovation of the MSA has been the provision designed to promote 'transparency in supply chains' - a requirement for defined 'commercial organisations' to publish a statement of any steps they are taking to eliminate modern slavery in their business and supply chains (the 'reporting requirement').

When it began its legislative path, the initial Modern Slavery Bill (the 'Bill') contained no mention of transparency in supply chains,2 despite recommendations to do so that emerged from an evidence review set up by the UK Government.3 The inclusion of the reporting requirement was initiated by the Transparency in Supply Chains Coalition (among others)4 and gained the backing of prominent businesses and investors.5 By the time it was passed into law, the MSA enjoyed support across all political parties, and was hailed by the UK Government as a 'truly groundbreaking measure'.6

The mandatory aspects of the reporting requirement are quite limited. Nothing in the reporting requirement compels an organisation to take any action to address modern slavery, or to ensure that any steps taken are effective. Organisations need only report on steps they have taken, or state they have taken none. The policy objective of the reporting requirement is, however, broad, being to 'require businesses to be transparent about what they are doing' in order to increase supply chain accountability.7 At the core of the UK Government's approach is the notion that transparency will 'create a level playing field' between businesses that act responsibly and those that need to do more, and thereby 'increase competition to drive up standards'. …

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