Detailed analysis of new Government guidance for businesses on Modern Slavery Act section 54 statements

On 24 March 2025, the UK Government, via the Home Office, released new statutory guidance for businesses in respect of their obligations under section 54 - the transparency in supply chains provision - of the Modern Slavery Act 2015 (the Act).

The new guidance comes ten years after the Act became law, and follows recent criticisms that the Act, once ground-breaking, has now fallen behind current international legislation and best practice. (See our prior pieces on assessments of the Act from a House of Lords Select Committee and the Business and Trade Committee.)

In a recent Insight, we set out some key takeaways from the new guidance, highlighting general principles for companies undertaking anti-slavery activities. This Insight builds on those points to provide a more detailed analysis of the content of the guidance.

Brief background to modern slavery statements

Under section 54 of the Act, a company supplying goods and services with more than £36 million in turnover must produce an annual statement - approved by the board, signed by a director and published on its website - setting out the steps it has taken during the year “to ensure that slavery and human trafficking is not taking place in any of its supply chains, and in any part of its own business”, or that it has taken no such steps. Though section 54(5) lists six areas about which a company may include information, such as its policies and due diligence processes in relation to modern slavery, it is not obligated to do so.

At high level, the criticisms against the section 54 provision are that it does not go far enough in trying to prevent, identify or address modern slavery in supply chains, in particular that it does not mandate a company to undertake due diligence or any other action. This contrasts, for example, with the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), (the scope of which  is currently facing some uncertainty due to proposed amendments via the EU Omnibus I, about  which we recently wrote here).

The new guidance at high level

It is important to note at the outset that the new guidance does not amend section 54. Rather, it can be seen as an overlay to the legal requirements of section 54: the guidance seeks to better explain how businesses should “comply with the letter and spirit” of this provision. In effect, it seeks to raise the bar in terms of the Government’s expectations for the section 54 statement, encouraging companies to move beyond viewing it as a compliance exercise and, instead, as a way to “embed anti-slavery activity within an organisation’s operations and supply chains as standard practice”.

Underpinning the guidance is the Government’s desire to create a “race to the top” culture where companies conduct thorough risk assessments and due diligence in their operations and supply chains, are transparent about the modern slavery they do - and are expected to - find, have accountability in relation to such incidents including remediation, and show continuous improvement in their response to modern slavery over the long-term.

The guidance refers to, reflects and aligns with the key international frameworks in this area: the UN Guiding Principles on Business and Human Rights (UNGPs), which sets out how businesses should conduct human rights due diligence, and the OECD Due Diligence Guidance for Responsible Business Conduct and OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.

How to report on a company’s response to modern slavery

A large focus of the guidance is on the six voluntary reporting areas listed in section 54(5) of the Act. The guidance summarises these as:^[1] (1) organisational structure, its business and supply chains; (2) organisational policies; (3) assessing and managing risk; (4) due diligence in relation to modern slavery (including approach to remediation); (5) training; and (6) monitoring and evaluation.

For each area, the guidance provides a robust list of information a company can include, categorised into sub-topics and then designated as “level 1” or “level 2” disclosures: companies are encouraged to progress to include more level 2 disclosures (in addition to level 1) as they become more familiar with their reporting requirements. Level 2 disclosures are often more detailed and in-depth versions of their level 1 counterparts. In addition, for each area the guidance addresses why the recommendations are important and details what processes or considerations a business can take to achieve meaningful action.

The illustrative table below provides some examples from the guidance.

What this means for companies and looking ahead

Though the guidance does not change the legal requirements of the Act, it has been viewed by many as an attempt to bring company behaviour under the Act more in line with international standards and best practice, as well as a stepping stone toward a future amended, more robust Modern Slavery Act. The Government has said it is continuing to develop its policies on modern slavery prevention and is planning to bring forward “a reformed modern slavery system that puts victims first and rebuilds the UK’s international standing in the global fight against modern slavery”. However, no timeline is clear at this stage as to when any new legislation may be proposed.

In terms of legal risk, however, the new guidance now refers to “failure to comply”: where an in-scope company fails to produce a statement, the Secretary of State may bring civil proceedings in the High Court for an injunction. If the organisation fails to comply with the injunction, they will be in contempt of a court order, which is punishable by an unlimited fine.

Regardless of the legislative landscape, in light of the new guidance, there will be good reason for companies to update their modern slavery statements. Key stakeholders, including investors, lenders, and corporate customers, are likely to look for increased disclosures which give more detail into the actions a company is taking in the fight against modern slavery in its business and supply chains rather than a tick box. Any company with a valuable brand or that makes claims to strong ESG credentials should pay particular attention.

For further guidance and tailored advice on the Modern Slavery Act, human rights related issues in your business or supply chain or anything else discussed in this briefing, please get in touch with Kerry Stares or with your usual Charles Russell Speechlys contact.

 
[1] It is noted that this summary from the guidance does not perfectly map to the order of sections 54(5)(a)-(f) of the Act. Readers are encouraged to also refer to each of the six areas as listed in the Act.