Modern Slavery Act: supplier due diligence requirements

What is the Modern Slavery Act?

The Modern Slavery Act 2015 is UK legislation designed to combat slavery, servitude, forced labour, and human trafficking. For businesses, it creates two main obligations: criminal offences for those who exploit others, and transparency requirements for larger organisations about steps taken to address modern slavery in their operations and supply chains.

The transparency requirement applies to commercial organisations with annual turnover of £36 million or more. These organisations must publish a modern slavery statement each year describing what they have done to ensure slavery is not occurring in their business or supply chains.

But here is what many businesses miss: even if you are below the threshold, modern slavery due diligence matters. Reputational risk does not respect turnover thresholds. And larger customers increasingly require suppliers of all sizes to demonstrate anti-slavery measures as a condition of doing business.

What the Act requires

Annual statements

Organisations above the £36 million threshold must produce a statement covering:

• Their business structure and supply chains
• Policies relating to slavery and human trafficking
• Due diligence processes
• Parts of the business at risk and steps taken to assess and manage that risk
• Effectiveness measures (key performance indicators)
• Training provided to staff

The statement must be approved by the board (or equivalent), signed by a director, and published on the organisation's website with a prominent link from the homepage.

Due diligence expectations

There is no prescribed methodology for due diligence, but government guidance and enforcement trends point to expectations:

• Risk assessment of supply chains by country, sector, and product type
• Supplier questionnaires and audits
• Contractual requirements for suppliers
• Whistleblowing mechanisms for workers to report concerns
• Remediation processes when problems are found

Related reading: Supplier compliance checklist for UK businesses

High risk sectors and countries

Modern slavery risk is not evenly distributed. Certain sectors and sourcing locations carry elevated risk.

High risk sectors

High risk indicators

Individual suppliers or workers may display warning signs:

• Workers appear withdrawn, frightened, or avoid eye contact
• Workers are not in possession of their own identity documents
• Workers live at their workplace or in employer-controlled accommodation
• Workers have limited freedom of movement
• Signs of physical abuse or neglect
• Workers are unable to negotiate pay or conditions
• Excessive deductions from wages for accommodation, transport, or equipment
• Recruitment fees paid by workers

Building supplier due diligence

Step 1: Map your supply chain

You cannot assess risk in supply chains you do not understand. Start by documenting:

• Who your direct suppliers are
• Where they operate and source from
• What products or services they provide
• How labour-intensive their operations are

For complex products, consider supply chain mapping beyond tier one. The mobile phone in your hand has components from dozens of countries – understanding that chain requires deliberate effort.

Step 2: Assess risk

Not all suppliers need the same level of scrutiny. Prioritise based on:

• Geographic risk – some countries have higher prevalence
• Sector risk – labour-intensive industries carry more risk
• Spend and strategic importance – focus resources where it matters
• Previous issues – suppliers with past concerns need ongoing monitoring

See how it works: MySupplierList helps categorise suppliers by risk and track due diligence activities.

Step 3: Gather information

Use supplier questionnaires to understand their practices:

• Do they have a modern slavery policy?
• How do they recruit workers?
• Do they use recruitment agencies, and if so, which ones?
• What checks do they conduct on their own suppliers?
• Have they had any modern slavery concerns, and how were they addressed?

For higher risk suppliers, consider site visits or third-party audits. Questionnaire responses only tell you what suppliers want you to know.

Step 4: Set contractual requirements

Contracts should require suppliers to:

• Comply with the Modern Slavery Act
• Have policies and procedures to prevent slavery in their operations
• Notify you of any modern slavery concerns
• Allow audits and inspections
• Flow down requirements to their own suppliers

Include termination rights for material breaches. Contracts without consequences have limited effect.

Step 5: Monitor and respond

Due diligence is not a one-time exercise. Ongoing monitoring includes:

• Periodic recertification by suppliers
• Tracking news and reports about supplier sectors and regions
• Maintaining whistleblowing channels for concerns
• Investigating and remediating issues when they arise

What to do when you find problems

Discovering modern slavery indicators in your supply chain is not failure – it is your due diligence working. What matters is your response.

Investigate

Understand what is actually happening. Initial indicators may be explained innocently, or they may reveal serious exploitation. Do not assume either way without proper investigation.

Protect workers

The immediate priority is worker safety. If exploitation is confirmed, work with specialist organisations to support victims. The Modern Slavery Helpline (08000 121 700) can advise on appropriate referrals.

Engage the supplier

Where problems stem from poor practices rather than deliberate exploitation, work with suppliers to improve. Training, process changes, and monitoring can address root causes.

Terminate if necessary

Some situations require ending supplier relationships. Deliberate exploitation, refusal to cooperate, or repeated failures despite support may leave no alternative. Document your reasoning.

Report appropriately

Criminal exploitation should be reported to police. Consider whether regulatory bodies or industry groups should be informed. Your modern slavery statement should address how you handle discovered issues.

FAQs: Modern Slavery Act compliance

Does the Act apply to us if we are below the threshold?

The mandatory statement requirement applies only above £36 million turnover. However, larger customers may require you to have anti-slavery measures regardless. And criminal liability for exploitation applies to all organisations regardless of size.

Can we be liable for our suppliers actions?

Direct liability for supplier actions is limited, but reputational damage is not. Organisations that fail to conduct reasonable due diligence may face criticism, customer loss, and regulatory scrutiny even without direct legal liability.

How far down the supply chain must we look?

The Act does not specify tiers. Reasonable due diligence considers the nature of your supply chain and where risks lie. For some industries, significant risk exists at tier two, three, or beyond. Focus resources where risk is highest.

What if a supplier refuses to answer our questions?

Refusal to engage with reasonable due diligence requests is itself a red flag. Consider whether you want to continue the relationship with suppliers unwilling to demonstrate basic standards.

Making supply chain compliance practical

Modern slavery due diligence for suppliers does not require perfection. It requires reasonable, proportionate steps to understand and address risks. Document what you do, improve over time, and respond appropriately when issues arise.

The organisations managing this well build slavery compliance into existing supplier management processes rather than treating it as a separate exercise. Questionnaires, audits, and monitoring become part of routine supplier governance.

Ready to strengthen your supplier compliance? Join the Founding Partner waitlist to see how Compliance Cover helps manage supplier documentation, risk assessment, and due diligence tracking.