1. Introduction and Background
The Modern Slavery Act 2015 (the “MSA”) was once widely regarded as a pioneering piece of legislation, placing the UK at the forefront of global efforts to combat forced labour and human trafficking. Section 54 MSA requires commercial organisations carrying on business in the UK with annual turnover of £36 million or more to publish an annual slavery and human trafficking statement ('Modern Slavery Statement') describing the steps taken to address modern slavery in their business and supply chains, or stating that no such steps were taken. The content of the statement is largely voluntary, and there is wide variation between the approach taken by businesses, with no legal consequence for vague or inadequate disclosures.
Since 2015, however, global expectations and regulations have changed. The MSA has attracted sustained criticism for the absence of sanctions for companies who do not comply with reporting requirements, and the poor quality of many published Modern Slavery Statements. In October 2024, the House of Lords Modern Slavery Act 2015 Committee recommended progressing towards standards of international best practice on supply chain due diligence and on 30 June 2026 the UK Government introduced proposed amendments to section 54 MSA within the Immigration and Asylum Bill (the “Bill”), currently before the House of Commons. Wider legislative reform is expected later this parliamentary term.
This coincided with the extension of corporate liability for all UK criminal offences - including modern slavery offences - to the actions of "senior managers", a change brought in by s.250 Crime and Policing Act 2026, on 29 June 2026.
This article examines the practical implications of these changes for companies carrying on a business in the UK.
2. Three Key Elements of the Proposed Amendments
The Bill’s amendments to section 54 MSA introduce three principal changes: mandatory due diligence disclosures with enhanced approval requirements; strengthened governance and sign-off process; and a new financial penalties regime.
A. Mandatory Supply Chain Due Diligence Disclosures and Director Declarations
Currently, section 54 MSA lists areas for recommended reporting which organisations may, but are not required to, address. By contrast, the Bill mandates reporting on the following:
- Risk assessment: the processes undertaken to identify and assess modern slavery risks within the organisation’s own operations and throughout its supply chains;
- Policies: the policies the organisation has in place to address identified modern slavery risks;
- Due diligence processes: the specific due diligence steps applied in relation to the organisation’s business and supply chain relationships;
- Training: the training provided to relevant staff to build awareness and capability in identifying and responding to modern slavery indicators; and
- Effectiveness: measures taken to assess the effectiveness of the steps described, including key performance indicators and outcomes.
This significantly increases the data and detail organisations would be required to disclose, publicly, supported by declarations from the company's directors confirming the accuracy and completeness of the statement. The scale of the exercise of compiling information and data from within the organisation and its supply chain will increase, and the degree of transparency the proposed measures impose will expose internal processes and third party management to a new level of scrutiny by shareholders, investors, NGOs and commercial counterparties.
There is no proposed change to the practicalities of publishing the statement:
- annual publication, as soon as reasonably practicable after the end of the financial year and, in any event, within six months;
- on the website, where the company has one, with a link in a prominent place on the homepage;
- a copy to be provided upon written request for one, within 30 days;
- voluntary publishing on the Government’s modern slavery statement registry.
B. Strengthened Governance and Approval Requirements
The Bill increases the ambit and impact of director approval of a modern slavery statement. As is currently the case, under the new proposal, the board of directors must approve the statement, and it must be signed by a director.
This requirement becomes more significant with the shift to more onerous mandatory reporting. Under the Bill, directors would be required to approve broader disclosure, increasing the responsibility of directors to attest to the accuracy and completeness of more extensive, detailed data and explanations. This is of particular note, read against the new failure to prevent fraud offence (s.199 of the Economic Crime and Corporate Transparency Act 2023), in force since 1 September 2025. Dishonest statements made about a company's supply chain management can now expose the company to criminal investigation and prosecution for failing to prevent fraud by its employees and those acting for it or on its behalf. Controls to ensure accuracy in published statements – such as the Modern Slavery Statement – should be part of the fraud prevention procedures companies now have in place, as a defence to the new offence.
For public authorities, the statement must be certified by the most senior official who is responsible for the day-to-day management of the authority’s operations. Where that individual is unable to act, certification falls to the next most senior official who is able to do so. This ensures that accountability for the statement’s content rests with operational leadership, not a delegated compliance function.
C. New Financial Penalties Regime
Perhaps the most significant proposed change is the introduction of a financial penalties regime for non-compliance: a conspicuous gap in the current framework.
The maximum penalty would be the greater of 1% of the organisation’s total turnover, being the global turnover of the organisation and any of its subsidiary undertakings – including those operating wholly outside the UK (for private sector organisations), or total budget (for public sector bodies); or £1 million.
For large multinational organisations with substantial total turnover, the 1% threshold could result in a fine far exceeding the £1 million alternative. In addition to financial penalties, the Bill includes the power to seek an injunction against non-compliant organisations, for specific performance of the statutory duties set out in the amended act. Taken together, these measures transform the reporting obligation from a largely unenforceable “name and shame” exercise into one carrying notable legal, financial, and reputational consequences.
This is an area attracting close focus by the House of Lords, as well as the government, indicating a real possibility of further reform in the near future. A private members' bill introduced in the House of Lords in June (Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill) proposes the introduction of a positive duty on companies to prevent human rights and environmental harm and to conduct due diligence throughout their value chain, new corporate criminal offences, and an independent enforcement body.
3. Extension to Public Authorities
For the first time, section 54 MSA requirements will apply to public authorities (a person exercising functions of a public nature) which meet the financial thresholds, bringing consistent requirements to commercial and public organisations.
This extension is expected to have significant implications on government bodies and departments, where supply chains and procurement arrangements are complex. Recent high-profile difficulties for government, for example around the procurement of IT systems or PPE during COVID, demonstrate the scrutiny applied to public sector supply chain. Public authority implementation of more demanding due diligence expectations looks set to impact the private sector companies which supply them, exposing their own supply chains to heightened scrutiny.
4. Extension of Senior Manager Attribution to Modern Slavery Offences
Wholesale changes to corporate criminal liability have been introduced by s.250 Crime and Policing Act 2026 (“CPA 2026”), in force from 29 June 2026 (see our briefing). Previously, a company could be held liable for the criminal acts of its most senior individuals - its “directing mind and will”, typically directors – a test prosecutors have long complained is too tough to meet. Under the new law, the criminal acts of a 'senior manager' acting within their actual or apparent authority, are attributable to the company. The 'senior manager' test brings in a much wider class of individuals and applies to all UK criminal offences including modern slavery offences.
This creates a second set of modern slavery risks for a company, exposing it to prosecution for the MSA offences of holding a person in slavery or servitude, and human trafficking, if committed by one of its 'senior managers'. A company may be held liable even if it had robust compliance measures in place. This significantly increases risk, and calls for tailored mitigation procedures.
5. Practical Guidance
Companies should be ready for the increased transparency requirements, and the increased legal, financial and reputational risks.
Steps to mitigate legal and financial risk
- Risk assessment: build modern slavery into existing risk assessments to understand the business lines, geographies and supply chain elements which pose the greatest risk. Understand whether the risks are met by current controls, or whether risk management frameworks and governance need to be strengthened or enhanced.
- Enhancing due diligence: Review and expand supply chain due diligence processes to cover the full range of modern slavery risks. Are you asking the right questions during selection and onboarding of suppliers, or during pre-merger or acquisition assessment?
- Governance and sign-off: Ensure boards have the MI they need to approve the detailed disclosures which the Bill introduces. Update board training on failure to prevent fraud to include the accuracy of a Modern Slavery Statement.
- Senior manager training and authority limits: Update training programmes and review delegations of authority to reflect the risk arising from the extension of criminal liability to 'senior managers'.
Steps to mitigate reputational risk
- Public scrutiny: Brief senior leaders on the impact of increased transparency. Data currently considered to be confidential may require publishing. Mandatory disclosures will allow direct comparison between organisations, showing where processes or approaches within a sector diverge.
- Stakeholder action: shareholder activists, investors, NGOs and the media routinely examine supply chain practices. Mandatory reporting will disclose data which could create litigation risk, or be used for hostile action. Consider legal risks ahead of time.
- Risk assessment for criminal liability: Identify whether modern slavery offences could be committed by the company's 'senior managers'. Use that assessment to tailor training and risk mitigation. Remember that reputational harm will be caused by an investigation, even if no penalty, injunction or prosecution follows.
- ESG and capital markets: Institutional investors increasingly factor modern slavery risk into investment decisions. Robust supply chain governance supports access to capital markets and investor confidence.
6. Conclusion
The proposed amendments to the MSA represent a long-awaited overhaul of the UK’s modern slavery reporting framework. Enhancing the MSA to introduce mandatory reporting and significant financial penalties for breach has been long-discussed and has cross-party support.
The proposed introduction of mandatory disclosure requirements, the extension of reporting obligations to public authorities, strengthened governance and sign-off obligations, and the introduction of financial penalties signal a wholesale change in approach by UK Government.
Organisations in the private – and for the first time, the public - sector should begin preparing now for what will be a significantly more demanding compliance environment, and commence actions to mitigate legal, financial and reputational risk.
Other authors: Eleanor Zhao
