New Government guidance for businesses on section 54 statements under the Modern Slavery Act

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 this Insight, we set out some key takeaways from the new guidance. We are also preparing a more detailed analysis that we will share with clients soon: please get in touch if you’re not already on our Inside ESG mailing list.

Brief background

Under section 54 of the Act, a company supplying goods and services with more than £36 million in turnover must produce an annual statement 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 (often referred to as the “modern slavery statement” or the “section 54 statement”). 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. The statement must be approved by the board (or equivalent), signed by a director and put onto the company’s website.

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).

Overview of the new guidance

It is important to note at the outset that the new guidance does not amend section 54. However, the guidance seeks to better explain how businesses should “comply with the letter and spirit” of this provision. It sets out the Government’s expectations for the section 54 statement, provides practical advice to support businesses to undertake meaningful action to combat modern slavery, and provides advice on “good” and “best” practice. Specifically, for each of the six voluntary reporting areas in section 54(5), the guidance demonstrates the type of content companies can disclose. These areas are: (i) the company’s structure, its business and supply chains; (ii) its policies in relation to modern slavery; (iii) its due diligence processes in relation to modern slavery in its business and supply chains; (iv) assessment and management of risk of modern slavery in its business and supply chains; (v) effectiveness in ensuring modern slavery is not taking place in its business or supply chains; and (vi) relevant staff training.

Underpinning the new guidance is the Government’s desire to create a “race to the top” culture where companies are transparent about the modern slavery they do find in their supply chains, have accountability in relation to such incidents and show sustained progress in improvement over the long-term.

Key points

Some key points for companies coming out of the guidance are highlighted below.

All companies

Though the guidance is primarily aimed at companies in scope of the Act (see above), the Government encourages smaller businesses to also produce a statement.

Voluntary registry

Companies are encouraged to upload their statements to the Government’s voluntary modern slavery statement registry.

Reflects international standards

The guidance refers to 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.

Stakeholder engagement

The guidance emphasizes collaboration being crucial, both with internal stakeholders (e.g., workers and, if done in an informed way, people with lived experience of exploitation) and external stakeholders, including both direct and indirect suppliers, NGOs and trade unions. The guidance highlights that industry risks are often systemic, unsolvable by a single business.

Collaboration and rebalancing

Related to the point above, companies are encouraged to think about their position within a supply chain; top tiers of supply chains should seek to fairly share (or assume responsibility for) the cost, time, capacity and admin of undertaking due diligence with those with less leverage or capacity, as well as to harmonise data requirements.

Continuous improvement

Companies are expected to continuously improve their response to modern slavery, with the guidance categorising possible disclosures as either “level 1” or “level 2”; as companies become more familiar with their reporting requirements, they should progress to include more level 2 disclosures and beyond.

Transparency and expectation of finding risks

The guidance encourages companies to go beyond publishing a modern slavery statement as a compliance exercise to instead disclose actual risks and actions taken, noting “it is expected that organisations will find instances of modern slavery in their operations and supply chains if they conduct thorough risk assessments and due diligence”. In fact, the guidance states “not finding risks is likely to demonstrate poor due diligence”. 

Limitations of audits

Companies are cautioned that though audits can be a powerful tool, they may not uncover all instances of modern slavery where not immediately apparent, and therefore should not be singularly relied on; audits should be supplemented with worker-centred practices should as worker voice procedures and engagement with worker associations and representatives.

Remediation

The guidance refers to remediation as playing a “crucial role” in addressing modern slavery—this means ensuring that those who have been directly impacted receive the support, justice and opportunity to recover and rebuild their lives. Companies are referred to the international standards (addressed above) which state companies have a responsibility to provide remediation where they cause or contribute to an adverse impact.

Disengagement

Where companies are unable to facilitate the mitigation or ending of adverse impacts within businesses in their supply chain, they need to be mindful of how to exit relationships responsibly, if at all, as exit may have a worse impact on workers. The guidance again here refers companies to the key international instruments (addressed above) which address this.

Looking ahead

Though the guidance does not change the legal requirements of the Act, there will be good reason for companies to update their modern slavery statements. Key stakeholders (investors, lenders, and corporate customers for example) are likely to look for increased disclosures which give more detail into the steps a company is actually taking in the fight against modern slavery in its business and supply chains. Any company with a valuable brand or that makes claims to strong ESG credentials should pay particular attention.

It is also noted that the new guidance now refers to “failure to comply”: where a company required to produce a modern slavery statement fails to do so, 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 with an unlimited fine.

The Government, in considering the recommendations of the House of Lords Select Committee on updating the Act, has said it is continuing to develop its policies on modern slavery prevention. The Government 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. We will continue to stay on top of related developments.

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.