Modern Slavery | UK Regulatory Outlook January 2025

EU Regulation prohibiting products in the Union market made using forced labour enters into force 

As reported in our November issue, the Council of the EU adopted the regulation prohibiting products in the Union market that are made using forced labour. Under the new regulation, if a product is deemed to have been manufactured using forced labour, it will be prohibited from being sold on the EU market (including online) and products will be seized at EU borders. If evidence can be provided to authorities that forced labour has been eliminated, then the product may be able to return to the EU market. 

On 12 December 2024, the regulation was published in the Official Journal of the EU and therefore entered into force on 13 December. It will become applicable on 14 December 2027.  

While the regulation will not come into effect for three years, businesses need to start planning to map and understand the risks in their supply chains, and start to implement effective measures to mitigate those risks in 2025.  

Consultation on eradicating modern slavery in NHS supply chains  

The government is currently running a consultation on proposals to prevent goods that are linked with modern slavery entering supply chains for the NHS. New regulations will be introduced to legally require public bodies procuring goods and services for the NHS to identify and mitigate the risk of modern slavery in supply chains. The consultation closes on 13 February 2025, see the Regulated procurement section for more.  

Although the regulations will only apply to public bodies in England procuring goods and services for the NHS, their introduction reflects a broader trend of businesses being required to proactively address the risks of modern slavery in their supply chains. The introduction of these regulations signals to businesses that supply chain transparency is becoming increasingly important. In 2025, even businesses not subject to specific legal requirements should be considering the risks arising from their supply chains and how they want to mitigate those risks. 

Reform of the Modern Slavery Act 2015  

As reported in our October issue, a House of Lords select committee published a report evaluating the impact and effectiveness of the Modern Slavery Act (MSA) 2015 following the UK Parliament's request for a review.

The committee's report, "The Modern Slavery Act 2015: becoming world-leading again", is generally critical of the existing legislation, with the committee stating that the UK's response to modern slavery "has not kept up with the advances of other nations". 

The report highlights areas where the UK has fallen behind in its approach to tackling modern slavery and offers a series of recommendations for improvement, such as strengthening reporting requirements and aligning UK due-diligence laws with international standards.  

The government published its response to the report on 16 December. The response does not suggest that significant substantive reform of the MSA is on the short-term priority list for the UK government. In terms of increasing transparency in supply chains, it has said that it will conduct a review of legislative and non-legislative measures to tackle forced labour and increase transparency in global supply chains, and that that will be done in "due course". The response also indicates the government is considering the scope and nature of the Section 54 reporting obligation itself, including the potential application to public sector organisations, and will provide further details on this review in the future. 

In response to the committee's recommendation for import laws banning goods produced by companies known to use forced labour, which would align with the EU's Forced Labour Regulation as set out above, the government has said it will continue to assess and monitor the effectiveness of existing measures and the impact of new policy tools. 

With the EU introducing the Corporate Sustainability Due Diligence Directive, the Corporate Sustainability Reporting Directive, and the EU Forced Labour Regulation, there is an opportunity for the UK to take steps to align domestic law with EU requirements that many UK companies will directly or indirectly be impacted by anyway. The response does not suggest such substantive change is coming soon. However, businesses should still keep abreast of any changes that may be introduced, particularly given the increased risk of penalties for non-compliance.  

Recent enforcement action 

Tesco migrant labour claim 

Tesco is facing a modern slavery lawsuit from former workers at the VK Garment Factory (VKG) in Thailand. The workers allege that they were forced to work 99-hour weeks in poor conditions for low pay. They also claim that they were trapped in a cycle of debt bondage and forced labour.  

There have been media reports that VKG relied on cheap Burmese labour, often illegally. The workers also allege that the auditors failed to report the abuses that they flagged.  

The workers are suing Tesco for alleged negligence and unjust enrichment. This is the first time a UK company has faced legal action in the English courts over a foreign garment factory.  

Organisations with international supply chains will want to watch this closely, as the outcome of this case will have ramifications for future claims brought by workers alleging forced labour in supply chains. 

Honey  

The honey industry is facing new demands to overhaul its supply chain after allegations that more than 90% of sampled products bought from large British ­retailers failed authenticity tests. 

This follows an EU investigation published in 2022 that found 46% of imported sampled products were suspected to be fraudulent, including all 10 honey samples from the UK. 

Honey importers in the UK and some experts challenge the reliability of such testing, but these allegations again illustrate the importance of transparent supply chains that can provide assurance on origin and authenticity of a product. Organisations should bear in mind that a lack of insight into supply chains can mask other compliance risks, including fraud, bribery and forced labour. To mitigate these risks, organisations should regularly undertake supply chain mapping and due diligence.  

We anticipate that in 2025 an increasing range of companies, across different sectors, will be facing allegations and concerns related to conditions in their supply chains. Having a clear plan of action for such scenarios, based upon effective supply chain mapping, risk identification and practically implemented mitigation measures, should help organisations limit their exposure to such risks and then respond effectively if such allegations do arise anyway.