Government proposes changes to S54 Transparency in Supply Chains Statements
25 September: Significant changes have been proposed in response to the transparency in supply chains consultation, including the mandation of areas a section 54 statement should include and the introduction of a single reporting deadline.
The Government has published its response to its July 2019 consultation Transparency In Supply Chains Statements. The consultation arose out of the Independent Review into the Modern Slavery Act 2015 led by Frank Fields, Maria Miller and Baroness Butler-Sloss (link here).
In response to the consultation, the government has now proposed the measures below – although no dates for implementation have been set and most will require legislative action:
1) Areas that a section 54 statement should include will now be mandated: previously the areas to include were merely suggestions. For the moment, the government does not propose to mandate any new areas, but this may change when the necessary legislative changes are introduced.
2) If an organisation is in scope, then in future its statement will be published on a government-run reporting service, currently being developed by the Home Office.
3) A single reporting deadline will be introduced. All those in scope will now have to publish an annual statement covering the twelve months ended 31 March. All will have to be published on or before 30 September of the same calendar year. Currently, the statement could coincide with an organisation’s financial year, with publication within six months of the financial year end.
4) The existing regulations will be amended to improve clarity and aid scrutiny as follows:
- The statement must include the date on which it was approved by the organisation’s board or top management body and the date on which it was signed by the senior individual responsible (director, chair of trustees, senior partner etc).
- Any statement prepared for a group must name all the entities included in the group statement.
The government has also committed to publishing more detail guidance, including tips on best practice to enable organisations to produce more meaningful statements and pledges for action. It is clear, however, that the government remains committed to the Modern Slavery Act’s transparency legislation and believes that it is more important than ever that businesses take responsibility for conditions in their supply chains.
Jane Berney, Business Law Manager commented: “These are very significant changes, particularly with regard to the change in the period that a statement will cover and the extension of the regime to public bodies.
“A central registry and clarity over what should and should not be included, however, are very welcome as both will help organisations in their attempts to eradicate the evil that is modern slavery”.