Proposed amendments to the Modern Slavery Act
Many readers will be familiar with section 54 of the Modern Slavery Act 2015 (MSA), which requires certain commercial organisations to publish an annual slavery and human trafficking (SHT) statement.1 As we recently reported (see our previous article), in September 2020 the Government published its response to a 2019 consultation on the MSA, in which it committed to amending section 54 by introducing a number of key changes which will better align the MSA with the Australian Modern Slavery Act 2018. Most notably, the Government has confirmed the matters to be addressed in an organisation’s SHT statement will become mandatory. As things currently stand, the six reporting criteria2 (e.g. policies, due diligence processes, etc.) are only discretionary. Also significant will be the introduction of:
- a single reporting deadline: all organisations will need to report on the period 1 April to 31 March, with a single reporting deadline of 30 September (six months after the end of that period); and
- a Government run reporting service: organisations will be required to file their SHT statements with a Government registry being developed by the Home Office.
In terms of the administrative requirements of preparing SHT statements, section 54 will be amended to require that “group” statements name all entities in the corporate group covered by the statement, and an organisation’s statement will need to specify the date on which it was approved by the board (or equivalent) and the date it was signed by a director (or equivalent).
Section 172 statements
2020 marked the first year large UK companies became obliged to include “section 172 statements” in their annual strategic reports, describing how the directors had regard to their duties under section 172 of the Companies Act (CA 2006) during the financial year.3 Section 172 requires directors to promote the success of the company for the benefit of its members as a whole, having regard to (amongst other things) employees, the community and the environment. The strategic report assists shareholders in assessing how the company’s directors have performed their duties, and the ‘section 172 statement’ adds to existing human rights related reporting requirements for quoted / traded entities and certain larger banks and insurance companies introduced in 2013 and 2016.4 It has far broader application, however, in that it catches all companies meeting two of the following three criteria: (i) a global turnover in excess of £36 million; (ii) a balance sheet in excess of £18 million; and (iii) more than 250 employees.
Claims against companies
A number of group action claims against companies progressed through the UK courts this year following the landmark 2019 Supreme Court ruling in Vedanta Resources Plc v Lungowe  UKSC 20 (see our previous article). The Supreme Court heard arguments in the case of Okpabi v Royal Dutch Shell Plc  EWCA Civ 191, on 23 June 2020, and the judgment is expected in the coming weeks. This case bares a similarity to Vedanta, in that it focuses on the jurisdiction of the English courts and specifically the issue of when a UK parent company can be liable in the English courts for alleged harm caused by the operations of its subsidiary. The Court of Appeal concluded in 2018 that the claimants had failed to put forward a good arguable case that the defendant parent company owed them a duty of care (see our previous article).
In another case earlier this year, Kalma v African Minerals Limited  EWCA Civ 144, the English Court of Appeal refused a claim brought by Sierra Leonean claimants, who argued the defendant company should be found liable in tort for harm which they suffered as a result of the violent conduct of the Sierra Leonean police. The company had called upon the police to quell protests in the vicinity of its mine on two occasions, and had also provided logistical support and cash payments to the police. On the facts, the court found the company was not liable as an accessory by common design (in that it had not intended for the police to use excessive force). Nor was the company liable in negligence, as the court deemed this a case of “pure omissions”. The law does not generally impose liability for the acts of third parties, and the court determined that none of the exceptions to this rule applied (e.g. creating the source of the danger).