Regulatory watch: Human rights due diligence and supply chain transparency

8 September

A guide to recent changes across the EU and UK, and what they mean for your business.

Summer 2026 has brought a wave of regulatory activity on human rights due diligence, modern slavery and forced labour. If your business operates across UK and EU markets, or sources from global supply chains, here’s an in-depth guide to what’s changed, and what those changes mean in practice.

The UK’s Immigration and Asylum Bill proposes the most significant changes to modern slavery reporting since 2015

Introduced on 30 June and now at committee stage, the Bill would overhaul section 54 of the Modern Slavery Act, requiring companies with turnover of £36 million or more to include mandatory prescribed content in their statements, provide an accuracy statement from a named signatory, submit statements electronically to the Secretary of State, and face financial penalties of up to £1 million or 1% of turnover for non-compliance. Public bodies above a to-be-set budget threshold would also come into scope.

Notably, the bill does not introduce mandatory human rights due diligence, a gap already criticised by the Independent Anti-Slavery Commissioner. It passed its second reading by 264 votes to 90.

A separate private member’s bill would go much further

Baroness Lola Young reintroduced the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill in the House of Lords on 17 June. First introduced in 2023, the revised bill is more closely aligned with international standards, strengthens enforcement mechanisms, and places greater emphasis on access to justice for victims.

If passed, it would apply to all companies, partnerships, corporations and public authorities operating in the UK, regardless of where they are based. Organisations with annual global turnover of £36 million or more would be required to report annually on their human rights and environmental due diligence, including their value chains, ownership structures, and any grievances and remedial actions. The bill would also require the Secretary of State to establish an independent enforcement body within six months of the legislation coming into force.

Its due diligence requirements are aligned with international frameworks, including the OECD Due Diligence Guidance, and cover the entire value chain from sourcing and production through to distribution, use and disposal. Organisations could be held liable for failing to prevent human rights or environmental harms in their own operations, subsidiaries and value chains, with proposed penalties of up to 10% of global turnover, procurement exclusion of up to five years, and a ‘failure to prevent’ criminal offence modelled on the Bribery Act 2010.

There’s no fixed timeline for when this might become law. The bill is currently awaiting the date of a second reading in the House of Lords.

CSDDD moves towards implementation guidance

The Commission ran a consultation (closed 24 July) on guidelines to support the amended EU Corporate Sustainability Due Diligence Directive (CSDDD), which applies from 26 July 2029 to large EU companies with more than 5,000 employees and over €1.5 billion turnover (the same threshold applies to non-EU companies). Guidance will be published in two tranches, in 2027 and 2028, and will matter well beyond the companies directly in scope, since it will shape expectations for their suppliers too.

The EU Forced Labour Regulation publishes its implementation guidelines

Alongside a new Forced Labour Single Portal, the Commission has issued non-binding guidance ahead of the regulation’s enforcement date of 14 December 2027. The FLR bans all products made with forced labour from the EU market, including exporting them from the EU. It covers all products regardless of origin or sector, and applies to all economic operators including non-EU businesses. The guidelines cover risk indicators, investigation and enforcement processes, and recommend due diligence built around the OECD’s six-step framework:

• Risk identification and assessment
• Prevention and mitigation
• Monitoring
• External communication
• Remediation

Separately, June saw the US Customs and Border Protection consolidate its forced labour enforcement guidance for importers, bringing the UFLPA, CAATSA and Section 307 Withhold Release Orders under one framework – another indication that this is a global direction of travel.

The bigger picture

As a summer filled with changes and developments draws to a close, the picture remains mixed rather than settled. The UK government has stopped short of mandatory human rights due diligence in its own bill, even as a more ambitious private member’s bill continues to make the case for it without a clear route to law. In the EU, the CSDDD and FLPR are both moving towards implementation, but on timelines stretching out to 2027 and 2029.

What the three measures do share is a common reference point: all of them are built around the OECD’s due diligence framework. Businesses don’t need to wait to see which specific bill becomes law to start acting. Building due diligence processes now, based on that shared framework, is the most practical and proactive way to stay ahead of whichever version ultimately takes effect.

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