Businesses, human rights and modern slavery: 2022 legislative review

breaking the chains of modern slavery

Businesses are gearing up to publish their annual modern slavery statements. However, additional legislation to address modern slavery is still to be proposed globally.

The following blog will provide insight into some of the newest legislations across the globe to assist governance professionals in remaining up to date with modern slavery governance.

At the end of 2021, US President Joe Biden signed the Uyghur Forced Labour Prevention Act, which came into effect on 21 June 2021. The Act states that goods produced by Xiangjiang Uyghur Autonomous Region of China, or with labour linked to specified Chinese government-sponsored labour programs, are made using forced labour. Companies will want to assess supply chain risks presented by the Act and implement compliance programme enhancements to mitigate risks.

In June 2022, Institutional Shareholder Services (ISS) ESG introduced its Modern Slavery Scorecard, which evaluates 25 quantitative and qualitative factors to assess modern slavery risks focusing on supply chains and business operations. As part of the ESG integration globally, many institutional investors are now focused on human rights risks, therefore, risks relating to modern slavery.

Canada has legislation prohibiting the importation of products produced with forced labour. In 2022, the Canadian Government introduced two bills to the Senate to stop forced labour: (i) Xinjiang Manufactured Goods Importation Prohibition Act and (ii) Fighting Against Forced Labour and Child Labour in Supply Chains Act. The latter-mentioned legislation is at the committee stage, which could reach Royal Assent as early as 1 January 2023.

With stronger regulation to combat modern slavery in Australia, the Australian Labour Party has published a policy on modern slavery, including a pledge to strengthen the country’s modern slavery regime. The plans include the appointment of an independent Anti-Slavery Commissioner to establish a corresponding office within the Attorney-General’s Department to monitor success in tackling the issue at the State and Commonwealth level. They are also proposing to introduce penalties for non-compliance with the MSA.

On 8 April 2022, the Government in New Zealand announced consultation regarding a legislative response to modern slavery and worker exploitation, forced labour, people trafficking and slavery, as numerous cases have been identified in New Zealand recently. This proposal aimed to reduce modern slavery, enhance New Zealand’s international reputation as a country that supports human rights and help the country’s businesses secure overseas trade. The Government has outlined 28 high-level actions planned to be undertaken by 2025.

The UK Government has announced its intention to introduce a new Modern Slavery Bill (it was included in the Queen’s Speech Briefing, published on 10 May 2022). The Bill was originally introduced on 15 June 2021, but unfortunately, it made no further progress than the first reading. The Bill highlighted in the Queen’s Speech includes extending section 54 of the Act to public bodies with annual turnover of over £36m, a single reporting deadline, and a mandated format for Board approval. The Government so far has not indicated that it intends to introduce mandatory human rights and environmental due diligence (HREDD) law. In September 2022, several companies, associations and investors published a statement and addressed it to the UK Government calling for a new UK law mandating human rights and environmental due diligence. They believe the action in this area would allow the UK to show global leadership.

The mandatory HREDD obligation is already in place across Europe. Countries that introduced the law include France, Germany and Norway.

The EU is also expected to adopt the draft Corporate Sustainability and Due Diligence Directive. The Directive will set out a proposed mandatory HREDD standard in 2023. On 14 September 2022, the European Commission issued its proposal for the ban on products made with forced labour. This rule would apply to imported goods into the 27-country bloc and goods made in the EU.

At the Organization for Security and Co-operation in Europe (OSCE) Central Asian regional conference on 4-5 October 2022, the focus was strengthening law in combatting human trafficking and protecting the rights of victims of human trafficking.

While the already existing modern slavery laws, regulations and disclosures are relatively new and emerging, calling on businesses to disclose rather than act may not foster great improvement in working conditions.

Boglarka Radi

Boglarka is a Doctoral Student at London South Bank University in Corporate Governance and Business Ethics and an associate member of The Chartered Governance Institute UK & Ireland.

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