This Modern Slavery PEC Policy Brief forms part of a series of Policy Briefs to assess the evidence base on the effectiveness of different regulatory interventions to address modern slavery in global supply chains, a key research priority for the Modern Slavery PEC, as set out in our Strategy. This Brief focuses on the effectiveness of mandatory human rights and environmental due diligence.
There is an ongoing interest from businesses and civil society in the possibilities of mandatory human rights and environmental due diligence (mHREDD) legislation in the UK in light of such laws recently being adopted in France, Germany, and Norway, and proposed, in February 2022, at the European Union level. This Policy Brief considers the existing evidence on the background to these developments and their relevance in relation to the UK modern slavery legal framework. It draws on an evidence review which considered academic literature, as well as reports produced by NGOs, governments, and international organisations.
- There are multiple reports and case studies pointing to how Human Rights Due Diligence (HRDD) can be effective at addressing modern slavery risks in practice, across a range of sectors. Evidence also suggests that there is a low level of voluntary implementation of HRDD by companies in the absence of regulation.
- There is limited evidence on the actual effectiveness of mHREDD laws, apart from the French Duty of Vigilance law 2017, which is the only one of these laws to have taken effect so far. Around 260 companies are subject to this law, with 70% of companies starting to revise their human rights and environmental risk mapping within the first financial year of the law and 65% of companies with a dedicated human rights impact identification process (up from 30% before the law).
- There has been extensive pre-legislative investigation into the anticipated impacts of mHREDD laws, including survey evidence reporting the views of businesses and other stakeholders. Reported benefits include; levelling the playing field, improving legal certainty and improving regulatory harmonisation. Reported negative impacts include a potential cost burden on businesses, these are not anticipated to be significant compared to revenue, but could differ considerably between businesses
- mHREDD legislation may (depending on design) overlap to some extent with legislation in related areas such as forced labour import bans or supply chain transparency. Further thought needs to be given to how a “smart mix” of these related regulatory tools may appropriately complement one another.
- There has been limited research on the impacts of mHREDD laws on directly affected individuals (such as people with lived experience of modern slavery), and around the involvement of those individuals in the design of such laws.
Authors: Owain Johnstone & Olivia Hesketh