Three-quarters of a century have passed since the adoption of the Universal Declaration of Human Rights, but its statement that “no one shall be held in slavery or servitude” remains far from universal in the world’s supply chains. With the volume of regulation designed to stamp out modern slavery in value chains set to increase, Jenny Messenger reports on how incoming legislation aims to reduce forced labour and what firms can do to mitigate risks.


The crime of modern slavery is largely a hidden one, yet it touches most people’s lives on a daily basis. Its fingerprints are on our coffee, clothes, chocolate and mobile phones.

The International Labour Organization (ILO) estimates that in 2021, 50 million people worldwide – one out of every 150 humans – were living in modern slavery. Over the last few years, a quarter (47) of the 198 countries on Verisk Maplecroft’s Modern Slavery Index have witnessed a significant increase in the risk of exploitation occurring.

And when the ILO last calculated the profits from modern slavery back in 2014, it arrived at an estimate of US$150bn.

The term ‘modern slavery’ covers a range of abuses, including compulsory labour, human trafficking and debt bondage, and while exploitation is present worldwide, it varies depending on sector and country.

According to the National Crime Agency (NCA), global supply chains are most at risk of human rights abuses when it comes to “the production and manufacture of electronic equipment, textiles and construction materials”, particularly the mining of resources used in electric vehicle batteries, like copper and lithium.

Even in the UK, which was ranked third in Walk Free’s 2018 Global Slavery Index of governments that have done the most to fight modern slavery, exploitation is evolving faster than the legislation designed to prevent it.

Construction workers and those in service sectors such as cleaning, catering and security are most vulnerable in the UK. 2022 was a record year for the number of potential modern slavery victims referred to the Home Office, increasing by 33% to 16,938, the highest figure since the referral mechanism began in 2009.

“I think it can feel quite far removed. It can feel very foreign, even though it’s a huge problem in the UK,” says Olivia Dakeyne, think tank manager at Themis, a financial crime intelligence provider that also offers financial institutions free training in tackling modern slavery.

This disconnect is reflected in the legal system, too. According to Finance Against Slavery and Trafficking (Fast) – an initiative based at the United Nations University, the UN’s research think tank – “the prohibition of slavery is one of the strongest norms in international law”, but enforcement is weak while prosecutions and convictions are low.

The reasons for this are partly due to an overwhelming lack of intelligence, which Gavin Miller, a former detective who spent over six years in the Modern Slavery Human Trafficking Unit for the Police Service of Northern Ireland, describes as “cavernous”.

In the UK, the Modern Slavery Act (MSA) 2015 allows victimless prosecutions, “because of the intimidation that many victims feel, or because they don’t feel they are victims themselves, even though they are”, Miller tells GTR. “The victims in these sorts of cases end up doing exploitative work because they’re vulnerable, either for social, political or economic reasons, and they’re in a really desperate place.”

“I thought, when I began these sorts of investigations, that if I could explain to someone that they’ve earned £50,000 or £100,000 in the last few years, but haven’t retained any of it, they would support us,” Miller says. “But the vast majority don’t get it, because for them, there’s been no normality or love in their entire life. These exploiters and traffickers are very good at manipulation.”

This creates difficulties when it comes to sentencing, Miller adds, because if details are lacking, a judge may not have access to aggravating factors – such as a victim’s age – that would allow them to give a more substantial sentence.

Prosecutions are on the rise in the UK though, albeit slowly. Completed prosecutions for offences flagged as modern slavery increased from 261 in 2020 to 451 in 2021, but numbers are still low compared to estimates of how many people are actually living in servitude.


Mounting regulation

In response to the problem, governments around the world have taken steps to introduce regulation aimed at eliminating modern slavery, although some of the measures are fast becoming outdated.

Back in 2010, California brought in legislation requiring due diligence in supply chains, which was followed by the UK’s MSA in 2015 and similar legislation in Australia in 2018.

More recently, the US government signed the Uyghur Forced Labor Prevention Act into law at the end of 2021, while in some European countries, legislation has become tougher, enabling victims to bring claims against companies and introducing financial penalties.

France enacted the Corporate Duty of Vigilance Act in 2017, which allows firms to be fined up to €30mn if the resulting damage was preventable, and Germany’s Supply Chain Due Diligence Act, which came into force on January 1 this year, echoes the General Data Protection Regulation (GDPR) in its penalties for non-compliance, with fines of up to 2% of global turnover.

The EU’s incoming ban on forced labour – expected to be adopted this year – is likely to follow suit, with the introduction of substantial fines for non-compliance. It will prohibit products made using forced labour from entering the EU’s internal market, covering EU-made products for domestic consumption and export, and imported products.

“We’re pretty sure that’s going to jump on the bandwagon of the French and the German-style approach, which is direct enforceability by consumers and victims, and big GDPR-style fines,” says Tim Constable, partner at law firm Dentons, speaking to GTR.

“If you want to be encouraged to comply with getting rid of modern slavery, then the threat of a class action against you is a very significant one,” he adds.

Meanwhile, the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) will require EU companies to conduct due diligence checks on their suppliers to ensure that they are complying with human right standards and environmental protections.

The CSDDD, which is still being finalised in the European Parliament, will initially apply to very large EU companies with over 1,000 employees and a turnover of more than €300mn.

Businesses will have to identify and mitigate impacts of their activities on human rights and the environment, and will be held accountable for adhering to minimum age requirements and occupational safety.

While legislation on the European continent means businesses may face significant penalties for failing to comply, the picture is different in the UK.

The MSA 2015 currently requires businesses with a turnover of more than £36mn to produce an annual statement explaining the steps they’ve taken to ensure their supply chains are free of modern slavery and human trafficking.

According to the transparency in supply chains provision in the MSA, the idea is to “create a race to the top by encouraging businesses to be transparent about what they are doing, thus increasing competition to drive up standards”.

In reality, though, there is not much to motivate companies to ensure their value chains are entirely clear of exploitation, with the only tangible consequences being the potential for reputational pressures exerted by customers, investors and NGOs.

“There are some very good examples of modern slavery statements, but your statement could simply say that you have not taken any steps to comply and that would pass the legislation,” Constable says. “The only sanction is that you might be named and shamed, or that a court might oblige you to publish a statement, but that’s as far as it goes.”

As Themis’ Dakeyne puts it, there’s a question over whether modern slavery statements “go far enough or whether they have become something of a tick-box exercise”.

Constable says that while the UK previously led the way in legal measures against modern slavery, it is now falling behind. In June 2021, a private members’ bill entered the House of Lords with details of potential reforms to the MSA that would make it a criminal offence for a business to provide a false statement on modern slavery, punishable with either imprisonment or a fine of 4% of global turnover, subject to a cap of £20mn.

While private members’ bills rarely become law, a new Modern Slavery Bill was announced by the UK government in May last year. It plans to mandate the reporting areas to be covered in modern slavery statements and introduce civil penalties for non-compliance, though further details are still forthcoming.

“Europe is now streets ahead in terms of enforcing anti-modern slavery legislation,” Constable says.

“If I was advising a client at the moment that was involved in an international supply chain, which they invariably are, I’d be saying, worry less about the UK legislation as about European legislation.”

So far, the UK is still without an independent anti-slavery commissioner after Sara Thornton completed her three-year term in April 2022. “While she hasn’t yet been replaced, I hope that she will be because that role has the power to make a huge difference and push this up the agenda where it belongs. Not replacing her feels like it’s maybe not as high up the agenda as it possibly could be,” says Dakeyne.

Yet UK businesses may still face an increase in litigation. According to Dentons, English courts are becoming more willing to hear group claims brought for abuses committed overseas.

For example, Tesco is facing a lawsuit over allegations that workers in a Thailand factory producing clothes for the supermarket’s F&F clothing range were made to work up to 99 hours a week on unlawful wages and in forced labour conditions.

And despite the failure of a recent action brought by the World Uyghur Congress against the NCA, the Home Office and HMRC for neglecting to investigate cotton products allegedly made in labour camps in the Xinjiang Uyghur Autonomous Region, the NCA acknowledged that these products could be deemed the proceeds of crime and intends to investigate further.


Next steps

In the face of such overwhelming statistics and regulatory architecture, what should businesses do?

“It’s such a big issue. Sometimes people don’t really know where to start, because every company and supply chain can be touched by it, unwittingly or not, and the people you’re investing in can be touched by it, as well,” Dakeyne tells GTR.

Dakeyne also draws attention to a further complication: the link between modern slavery and the climate crisis. “Modern slavery has got a really high carbon footprint,” she says.

According to a journal article published in the academic journal Energy Research & Social Science in 2021, if modern slaves represented a country, they would be the third-largest emitter of carbon dioxide in the world, after China and the United States. This is because so many high carbon-emitting illicit industries like deforestation and illegal mining are undertaken by modern slaves and human trafficking victims.

“We’re trying to get firms to drill into their supply chains, and ask the people that they’re partnering with and sourcing from to look at their own business,” Dakeyne says. “From our perspective, if people look at their offerings and say there’s absolutely no risk here, that’s likely to mean they’re not looking hard enough.”

When businesses find evidence of modern slavery, she says, then they are able to act.

Constable emphasises the need for transparency at all levels of the value chain and site visits to suppliers.

“Businesses need absolute transparency, due diligence on your seller, and due diligence on anyone who was supplying into your seller. You will want back-to-back indemnities from your seller that they have complied with the legislation you have to follow,” he says.

“The most obvious thing is that everyone who is engaged in large scale purchases from these risk category nations must at the very least undertake a proper site visit to see for themselves the true status of conditions under which the supplier is working.”

Technology can help in some cases, too. Fintechs such as ES3G and Diginex help firms monitor worker conditions in supply chains through tools designed to collect information directly from employees about their experiences.

“This is meant to supplement what companies are currently already doing, but there are gaps within social audit programmes, and things like forced labour are very difficult to identify during a site visit,” says Mary Ho, labour and human rights specialist at Diginex.

The tool, DiginexApprise, enables companies to survey workers in their supplier firms via a QR code. Workers can answer questions in their chosen language, with the anonymous, confidential data going directly to the company in real time.

Hannah Thinyane, director of supply chain technology research and development, built the tool at the United Nations University. “Apprise collates feedback across each facility, further protecting the anonymity of the respondents, because we know there’s always the fear of retaliation,” she says.

When problems are flagged up, the more that information is shared with the right organisations, the better.

Discussing the detection of modern slavery in the UK, Frank Hanson, head of partnerships and prevention at the Gangmasters and Labour Abuse Authority, underlines how information has the potential to change the course of an investigation.

“Even if it’s a relatively small piece of information, it can still be very important to us if it’s going to help build an investigation,” he says.

Miller, who has been the senior investigative officer (SIO) or deputy SIO for every successful prosecution in Northern Ireland under the MSA to date, suggests that in the future financial institutions in particular could share information from their due diligence checks about companies that may be exploitative.

“People don’t want to say that their business could potentially be at risk, because they feel the reputational risk for them would far outweigh anything else,” Miller says, but points out that “if you don’t share it, the risk has not gone away”.

Although the work is challenging, the pay-off can be profound, says Dakeyne. “The takeaway is to educate yourself and take free training, and you could have an impact on someone’s life. Being able to free someone from servitude is absolutely transformative,” she says.