It has been a long-winded journey to get the draft Bill on Modern Slavery to the point that it has reached in the Lords this week.
Over three years ago I first sat in the House of Commons where the Labour MP Michael Connarty proposed a private members bill on eradicating modern slavery. Already then there was heated debate on what this would look like. Should it follow the California Transparency Supply Chain Act? How would it address concerns on cutting red tape for business? Would the bill refer to ‘slavery’ or ‘human trafficking’? Opinions were divided on many issues, other than the agreement that something had to be done to try and tackle the growing numbers of people caught in slavery and human trafficking in both the UK and across the globe.
All this came to naught as the coalition ‘talked it out of parliament’ in January 2013. Nonetheless, Michael Connarty did say, ‘whatever happens to my Bill today, it will come back’.
He was right.
Human trafficking has been getting more attention in the media and arguably was a result of the EU Directive on Human Trafficking the UK government had to return to the issue . A report published by the Coalition of Social Justice set out recommendations for tackling human trafficking and included a proposal to adopt a Modern Slavery Bill. A draft Bill was introduced in 2014.
What is interesting is how politics has got in the way of the overall objective of this Bill. Perhaps that is unsurprising but given that the rise in cases of human trafficking is exponential one would have thought that getting it right was more important than the pandering of egos that has taken place. There have been battles on many fronts about what this Bill should incorporate.
Stop the Traffik, a global NGO campaigning for the prevention of human trafficking advocated a simple addition to the wording on non-financial requirements under the Companies Act 2006. The suggestions was to simply add ‘including slavery and human trafficking in supply chains’ after the term ‘human rights’ . That’s right, there is already a requirement that listed companies report on human rights in their annual reports. The rationale for this stance was to provide business with consistency and certainty (companies have already had to start thinking of reporting on human rights issues), and, more importantly, it would place the obligation at the centre of the UK governance structure. The threat of personal liability for directors that have signed off incorrect or misleading information would also be an incentive to ensure that any disclosure is substantiated. Finance Against Trafficking, a not for profit working with business on raising awareness of human trafficking, supported this stance.
This approach was rejected by the Government. However, delving into Hansard transcripts it was apparent the inclusion of the ‘human rights’ provision in the Companies Act, was originally supposed include a reference to ‘supply chains’. Unfortunately, somewhere this got overlooked
Now we hear that this Bill is ‘the first of its kind’; it is unique and so forth However, the first draft of the Bill made NO mention of supply chains! This was only included after extensive lobbying by various NGOs.
What we have now is arguably no more than a slightly different version of the California Transparency Supply Chain Act, which is not even regarded as being a world class model to follow. The current draft’s core requirement is the inclusion of a ‘slavery statement’ by captured companies. There is no detail on what the turnover will be to capture companies. In addition, until its passage through Parliament, there was also no requirement for senior management or Directors to sign off the statement, the implication being that it could simply be drafted by the companies marketing department and uploaded onto the website. An amendment has been proposed to require directors to sign off the statement.
Yet another consultation is being run on the current draft Bill. The Government is seeking views on the turnover threshold that should be applied to capture certain companies.. Interestingly, the proposed detail to be included in the ‘slavery statement’ are no more stringent than those requirements set out in the UK Companies Act. All the more reason to amend the Companies by including only one sentence! Instead, legislators seem to be opting for more confusion, duplication and, perhaps the most frustrating point of all, a separate requirement that can simply be dealt with by setting out a vague statement on a website. Although arguably if director’s are going to have to sign it off they may apply their mind to the statement.
What is causing even more uncertainty is that the Bill should receive Royal Assent prior to the General Election; however, the consultation on threshold closes on that same day. This presumably means further clarifying legislation and guidance will be required.
So, will se see more transparency? Perhaps we might see companies seeking to take a leadership position on this. There might be companies that decide to include this as part of their human rights work and we would recommend that this is what should happen. Who knows, we might even see Directors taking this seriously.
But we will just as likely not see any of that -only some half-hearted marketing statement with no real accountability to shareholders and stakeholders alike.
The verdict is out as to whether this legislation will prove to be a game changer. One thing is for sure: if it does disrupt some of the human trafficking networks and activities then it will indeed be heralded as a success and a key piece of legislation internationally.
For an overview of the Modern Slavery Bill and how this could affect your business click here.
Want to have your say? There is still time to give your feedback and share your insight with government under the most recent consultation. See here.
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