Clifford Chance

The UK Government has issued updated statutory guidance (the Updated Guidance) to explain how businesses should comply with section 54 of the Modern Slavery Act (the MSA). This is the first comprehensive overhaul of the guidance since its original publication in October 2015.

Context

On 24 March 2025, almost exactly 10 years since the MSA was introduced, the Home Office published Updated Guidance on how businesses should comply with the transparency in supply chains (TISC) provision under section 54 of the MSA. Section 54 requires certain commercial organisations doing business in the UK to produce an annual statement setting out the steps they have taken to prevent modern slavery in their business and supply chains (or a statement that they have taken no such steps).

The MSA was introduced in 2015 under Theresa May, the then Home Secretary, and was hailed as a landmark act at the time, with the TISC provision being one of the first pieces of legislation globally to introduce mandatory corporate reporting requirements in relation to the steps companies have taken to address modern slavery.

Since its introduction, there has been a growing body of legislation around the world on this topic, ranging from more stringent reporting obligations to mandatory human rights due diligence requirements. Accordingly, the MSA has drawn criticism in recent years for being "out of step" with these newer legislative requirements.

Recently, the House of Lords Select Committee on the MSA (the Select Committee) published a report (Report) following its inquiry into the effectiveness and impact of the MSA, which identified areas where the UK has "fallen behind" in its approach to tackling modern slavery and human trafficking, particularly in the context of international due diligence developments (see our blog post here).

In its response to the Report issued in December 2024, the UK Government indicated its stance on various aspects of the TISC provision in the MSA, including that it supports non-legally binding due diligence approaches aligned with the UN Guiding Principles on Business and Human Rights (UNGPs). However, it did not commit to revise or extend the TISC provisions in the MSA.

This Updated Guidance is the first major rewrite of the statutory guidance that sets out the UK Government's expectations of organisations and supports them in complying with the TISC provisions in the MSA. The Updated Guidance emphasises the importance of businesses complying with both "the letter and spirit" of section 54 and in this regard supports organisations to undertake meaningful action to tackle modern slavery.

Who should read the Updated Guidance?

The Updated Guidance is designed to assist not only organisations falling within the scope of section 54, but also to encourage voluntary compliance by organisations that are not legally obliged to produce a statement under the MSA, including smaller businesses and public bodies. The Updated Guidance also provides additional clarity for group companies, overseas organisations, charities and investment trusts in determining their reporting obligations.

Key features of the Updated Guidance

1. Guidance on due diligence

The Updated Guidance places greater explicit emphasis on the UNGPs and the OECD Due Diligence Guidance for Responsible Business Conduct (the OECD Due Diligence Guidance) (together with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (OECD MNE Guidelines)). It cites the UNGPs and the OECD Due Diligence Guidance, together with the OECD MNE Guidelines and accompanying sector-specific guidance, as the "two key international frameworks that are relevant to how businesses should tackle modern slavery in their operations and supply chains" and more clearly signposts and integrates those frameworks into the Updated Guidance, using them to highlight the MSA's expectations and to pinpoint examples of best practice.

For example, the Updated Guidance recognises that due diligence in relation to modern slavery "may form part of a wider human rights due diligence process, using the UNGPs and the OECD Due Diligence Guidance" and provides more detail on the due diligence expectations under the frameworks. In particular, the Updated Guidance includes details of the actions that organisations can take to prevent, mitigate and remediate actual or potential risks of modern slavery. This includes advising that, as a last resort, "where complicity in the exploitation is clear and mitigation and/or remediation is not possible, organisations may decide to responsibly disengage from a supplier/supply chain".

Additionally, businesses are advised to prepare for the upcoming EU Corporate Sustainability Directive (CS3D), which requires certain large EU and non-EU organisations to carry out appropriate human rights (and environmental) due diligence within their own operations and chain of activities. For further information on CS3D, see our briefing here (now potentially subject to change through the Omnibus proposals discussed here).

2. Continuous improvement and transparency

The Updated Guidance emphasises the importance of continuous improvement on an annual basis, consolidating some of the non-statutory guidance that has been issued over the years.

Businesses will need to "build on what they are doing year-on-year" and to highlight areas of change and improvement in each annual modern slavery statement. Businesses are also advised to keep historic statements from previous years available online even when new statements are published to allow the public to compare statements over time and monitor progress.

To support continuous improvement, for each of the non-mandatory categories of information that the modern slavery statement could contain (i.e. organisational structure, business and supply chains, policies, risk assessment and management, due diligence, training, monitoring and evaluation – see s.54(5), MSA), the Updated Guidance suggests level 1 and level 2 disclosures. Businesses are encouraged to start with 'Level 1' disclosures and progress to more comprehensive 'Level 2' disclosures "and beyond" as they become more familiar with reporting requirements.

3. Stakeholder engagement and collaboration

Increased emphasis is placed on the importance of stakeholder collaboration (both internal and external) to combat modern slavery. The Updated Guidance makes clear that audits should not be relied upon to identify modern slavery risks and must be supplemented by worker-centred practices. This includes fostering channels for workers to report concerns and establishing grievance mechanisms.

The Updated Guidance also states that businesses should consider the use of leverage to drive change in their approach to risk assessment and mitigation, consistent with the recommendations of international human rights standards such as the UNGPs and the OECD MNE Guidelines. In doing so, businesses should seek to understand which suppliers they have lesser or greater influence over in order to increase their leverage (which can be done through routes such as offering capacity-building or other incentives to the related entity or collaborating with other actors).

4. Modern slavery statement registry

The MSA does not currently require companies to upload their statements to the modern slavery statement registry (Registry) (although the Select Committee has recommended a mandatory publication requirement in the Report) but encourages them to do so. The Registry is an online platform established in March 2021, designed to enhance transparency by facilitating the sharing of best practices among companies. The Updated Guidance seeks to increase submissions to the Registry by underlining the benefits of voluntary engagement.

Next steps and reflections

The Updated Guidance was developed in consultation with businesses, the public, civil society, trade unions and academics. It incorporates practical insights gathered across the 10 years that the reporting requirement has been in place and reflects the changing legislative landscape in which businesses operate in 2025 – where processes to tackle modern slavery may well form part of broader human rights related due diligence.

It remains to be seen whether the UK Government will seek to revise and strengthen the TISC provisions in the MSA. However, in the meantime, the Updated Guidance seeks to help and encourage organisations to "comply" with both the spirit and the letter of the law, encouraging (but not mandating) an approach that goes beyond bare de minimis compliance with the MSA.