Editor's note: Sara Martinetto is a research intern at the T.M.C. Asser Institute. She has recently completed her LLM in Public International Law at the University of Amsterdam. She holds interests in Migration Law, Criminal Law, Human Rights and European Law, with a special focus on their transnational dimension.
In my previous
explained how the negotiations on a prospective Treaty on Business and Human
Rights are going hand-in-hand with the implementation of the United
Nations Guiding Principles on Business and Human Rights
(UNGPs). The Principles – developed by Professor John Ruggie, and approved by
the UN Human Rights Council in 2011 – have attracted widespread consensus among
both States and corporations. Nowadays, the UNGPs are regarded as crucial to
hold corporations accountable for human rights abuses connected to their
activities. However, the UNGPs are not binding, and they need to be operationalized
in national law, as reaffirmed in Human Right Council Resolution
26/22. To date, National Action Plans
appear as the preferred tool to transpose the Principles into national law. Nevertheless,
their provisions are often of a descriptive nature, resembling more a
declaration of intent rather than an effective implementation of the UNGPs.
Only recently, some States have actually adopted hard law instruments on Business
and Human Rights, and the UK
Modern Slavery Act (2015) is one of them. The Act, aimed at
tackling modern slavery and human trafficking, was sponsored by Theresa May and
Lord Bates in 2014 and came into force on 29 October 2015.
two years from the entry into force of the Act, this post aims at giving a
brief account of what the Modern Slavery Act is and how it has been applied so
far. The main focus will be on Section
54 of the Act (‘Transparency
in the supply chain’), which prescribes a reporting obligation for
Modern Slavery Act is considered as part of a broader set of hard law
instruments adopted in the face of the inability of soft law to prevent and
punish corporate abuses.
This array of laws ranges from the California
Transparency in the Supply Chain Act of 2010 (which has
deeply influenced the UK Act),
to the EU
Non-Financial Reporting Directive of 2014, and the French
‘due diligence’ law of 2016.
there is a fundamental difference between the Modern Slavery Act and its
American and French counterparts: it aims at tackling modern slavery and human
trafficking in a broad sense, even when these crimes have been committed
without any connection with corporations. For example, the Act covers offences
against domestic workers, who work in the employer’s household and not in a
In fact, the Act has been adopted in the aftermath of the European Court of
Human Rights ruling in C.N. v United Kingdom, where the Court found the UK lacking of an adequate
legal framework to tackle violations of Art. 4 ECHR (prohibition on slavery).
Thus, the Act implements relevant international and European instruments
regarding modern slavery and human trafficking.
the primary aim of the Act is to establish criminal liability for natural
persons committing such crimes. Indeed, the first version of the Bill did not
contain any reference to modern slavery in the supply chain. It was only due to
the strong criticism the draft attracted, especially in the light of the recent
scandals some British corporations were involved in, that the
British Parliament decided to introduce a provision addressing exploitative
practices perpetrated by businesses (Section 54).
one fundamental point is to be stressed: natural persons can be criminally
liable under the Modern Slavery Act. Members of any entity, be it a criminal
organisation or a company, may be found guilty of human trafficking and modern
What Section 54 prescribe is a separate obligation, binding on corporations, to
report whether the offences covered by the Act occur in any part of their
business. Thus, only Section 54 has been regarded as an implementation of
offences covered by the Act
diving into the analysis of the obligations set out in Section 54, it might be
useful to look at what offences are covered by the provision. This analysis
serves two purposes: it allows drawing some general considerations on the Act
and it defines which criminal conducts have to be reported by corporations.
12 of Section 54 recalls the offences defined in the first two sections of the
Act (specified in Section 3 and 4), together with some similar provisions,
contained in other pieces of legislations enacted in Scotland and Northern Ireland.
All in all, four crimes are listed: slavery, servitude, forced or compulsory
labour, and human trafficking.
the reference made by the Modern Slavery Act to Art. 4 ECHR, the constitutive
elements of such crimes are the object of much debate in international legal
scholarship, which lead to a proliferation of different definitions.
Therefore, ‘modern slavery’ is used as an all-encompassing concept, which
includes ‘all activities involving someone obtaining or holding another person
in compelled service’.
As a result, the judiciary enjoys a great margin of discretion in defining the
scope of application of the Act.
it is worth noting that the narrative surrounding modern slavery often revolves
around human trafficking and sexual exploitation, and the UK Modern Slavery Act
is no exception to it. This appears clearly both from the focus maintained
during the negotiations of the Act and from the Modern
Slavery Strategy adopted by the British Government in November 2014.
As a result, modern slavery is considered more an immigration and border
control problem, rather than a question of labour standards and corporate
conduct. However, according to the
Labour Organisation, only 29% of people implicated in
modern slavery actually crossed borders.
Thus, the broad scope of application of the Act, and the political
orientation underlying it, pose the risk of narrowing down the focus of
investigations on natural persons, disregarding enslavement practices which did
not entail trafficking. This emphasis placed on migration-related exploitation
could ultimately have a negative impact on the understanding businesses have of
what constitutes modern slavery under the Act. Therefore, it is up to companies
covered by Section 54 to report each and every exploitative practice occurring
in their supply chain, regardless of their link with migration issues.
54 obliges any company with a minimum global turnover of £36m, which supplies
goods or services in the United Kingdom, to produce a slavery and human
trafficking statement for each financial year. The statement has to be approved
by the board, signed by the director and published on the company’s website.
Each element of this provision is in need of further clarification.
of all, a slavery and human trafficking statement requires an analysis of the
steps the corporation has adopted to prevent these crimes from occurring in its
supply chain or in any part of its business. This would compel corporations to
come clean about the possible presence of such exploitative practices in their
supply chain. However, Section 54(4)(b) explicitly provides for the possibility
to state that no such steps have been taken: there is no legal obligations for
corporations covered by the Act to assure that their products and services are “slavery
and trafficking – free”.
there is no indication on how this Statement should be drafted. Ideally, it
would include the elements listed in Paragraph 5 of the Section: the structure
of a company and of its supply chain; slavery and human trafficking internal
policies; due diligence processes adopted with regard to these crimes; risk
assessment and risk management of exploitative practice along the supply chain;
effectiveness of the measures taken; the training about slavery and human
trafficking available to its staff. However, these components are introduced in
the provision by the word “may”, leaving it totally up to corporations to
decide whether to include such items in their own statement. In particular,
there is no indication of what “supply chain” means: according to the
guidelines issued by the Home Office, this expression has to be read in its
considerations might be drawn from these first two points. Firstly, one can only
notice the discrepancies between the obligation set out in Section 54, and the
due diligence obligation enshrined in Principle 17 UNGPs. According to this
provision, due diligence consists in “assessing actual and potential human
rights impacts, integrating and acting upon the findings, tracking responses,
and communicating how impacts are addressed”. Section 54 focuses only on the
last element, leaving outside its scope measures related with modern slavery
risk assessment and management, which are recalled in Paragraph 5 as a mere
suggestion. In so doing, this norm falls very short of the previous attempt by
the judiciary to establish a duty of care for parent companies vis-à-vis
operations of their suppliers and subsidiaries.
Secondly, companies are left with a great margin of appreciation on what
constitutes their supply chain, and whether they should disclose data regarding
the far ends of their businesses (e.g. indirect suppliers, suppliers of minimal
components of the finished good etc.).
the personal scope of application, Section 54 applies to all enterprises which carry
out their business or part of their business in the United Kingdom (54.12),
whatever their State of incorporation. Overall, the Government estimates the
provision applies to around 12000 entities. The underlying idea is to render
the British market free from modern slavery. Even if many have welcomed this
sort of extraterritorial reach of the provision, others have criticised its
In fact, the provision does not apply to foreign subsidiaries which, albeit
fully-owned by British companies, do not do any business in the UK. In such
way, a large segment of some companies’ operations might fall outside the scope
of the provision. Moreover,
the expression “to carry on a business” has been defined neither by the Act
itself, nor by the Government, which stated that the wording is to be
interpreted following a “common sense approach”: the extent to which companies
operate in the UK market is irrelevant, as long as their corporate presence is
the approval of the statement by the board and its signature by the director has
the positive effect of placing the modern slavery issue at a prominent place in
companies’ agendas. Moreover, the statement has to be published on a visible part
of the company’s website, or be disclosed if requested, in case no website is
available (54.7-8). The
possibility to access the statements is of the utmost importance, especially if
one considers the sanction regime prescribed by Section 54: the only possible remedy
against a failure to comply with the reporting obligation is to start a civil
proceeding aimed at obtaining an injunction to comply and a non-specified fine. Thus,
the Act heavily relies on the scrutiny that consumers, partners, and investors
could exercise on the statements. In order words, the rationale of the
provision is that enterprises will not only comply, but also adopt a proactive
stand against modern slavery, in order to avoid the reputational risk of being
associated with such offences. Perhaps, failure to comply or publishing cursory
statements could be an incentive for authorities to investigate the company.
However, this would only be an indirect consequence of the Act.
Section 54 is being applied in practice
of the statements published pursuant to Section 54 is hindered by the lack of a
central public database collecting all of them. Thus, monitoring of
publications has been left to civil society. The Business & Human Rights
Resource Centre, in collaboration with other organisations, has created the UK
Modern Slavery Act Registry. The Registry performs an essential
function, namely it creates a level playing field for all corporations, since
they are all exposed to the same public scrutiny.
major reports have examined the statements released in 2016 (here and here). From
their findings it is possible to appraise some positive trends. No company has
declared that no steps have been taken; conversely, there is an increasing
engagement in the issue, resulting in greater allocation of resources in
tackling exploitative practices. However, numerous shortcomings have also been
reported: many statements fail to meet minimum requirements set out in the
provision (e.g. they are not signed or they are not visibly published on
websites), and do not include the optional elements listed in Paragraph 5. Specifically,
businesses omitted a complete account of the structure of their supply chain,
making it impossible for the public to grasp how businesses are organised
beyond the first tier of suppliers. Additionally, if the Act provides for very
limited sanctions in case of non-compliance, no actual sanctions are prescribed
in case of poor-quality disclosure. 
It is true
that many companies had never performed this type of investigation before 2016.
Thus, it is possible that the quality of statements will improve over time. To
date, it is hard to assess the evolution between 2016 and 2017, since those
organisations whose financial year ends between 29 October 2015 and 30 March
2016 were exonerated from publishing the 2015/2016 statement. In a 2017
report, Ergon found marginal progress in reporting techniques,
although in most cases it remains unclear how investigations, risk assessment
and management have been performed.
Modern Slavery Act has been described as an “example of meta-regulation”,
or even of “reflexive law”,
a sort of hybridization between public and private governance. It establishes a
minimal hard-law framework (i.e. the reporting obligation), and then leaves
private entities free to decide how to implement it. Supposedly, an advantage
of this approach is the higher knowledge corporations possess about their own
supply chain, which could result in better strategies to tackle modern slavery.
At the same time, public intervention helps to create a level playing field
among corporations, where everyone is subject to the same level of inspection.
In this way, companies would be invited to be transparent, without the fear
that disclosure would leave them alone into the public eye. Therefore, the idea
is to create a virtuous cycle, were corporations would start a sort of race to
the top to eradicate modern slavery.
not all that glitters is gold. In practice, the UK Modern Slavery Act seems to
be a weak form of regulation, which is “fully dependent on private governance
tools, standards, and enforcement mechanisms”, without any reference to
international standards and no proper sanctions in case of non-compliance.
It has been described as “little more than an endorsement of existing voluntary
The freedom of enterprises in carrying out their reporting obligation is
accompanied by the fear they will fulfil it in the way it suits them best, using
the statement to promote their virtuous
practices and to hide the less-virtuous ones. The use of independent experts
who would perform unannounced inspections remains a mere recommendation.
Even more voluntary appears to be the performance of a full-blown due diligence
appraisal as prescribed by Principle 17 of the UNGPs, which the Acts lists
among the voluntary features of an already very weak reporting obligation.
awareness of the Act’s weaknesses, a new
bill amending Section 54 was presented to the British House of
Lords. This amendment would make the reporting requirements more stringent, and
would also attach further consequences to non-compliance. However, the
discussion is stalling, and, for now, victims of modern slavery practices seem
to be left with an Act that glitters, but it is certainly not gold.