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UK government to introduce mandatory human rights due diligence regime

UK government to introduce mandatory human rights due diligence regime
Published Date
Nov 12, 2026
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Image of Matthew Townsend
Matthew TownsendPartner, London
Image of James Ford
James FordCounsel, London
Image of Danae Wheeler
Danae WheelerSenior Associate, London
Image of Ying-Peng Chin
Ying-Peng ChinSenior Knowledge Lawyer, London

On November 4, 2026, the UK government announced that it will legislate “as soon as parliamentary time allows” to introduce a mandatory human rights due diligence regime across the UK for services and in Great Britain for goods (the “UK mHRDD regime”).

The government’s announcement already signals some key elements of the new regime, including a turnover test for in-scope companies, a focus on human rights abuses and labour exploitation, and new powers to remove goods made with forced labour from the Great Britain market. 

Key design features (including enforcement and sanctions) remain under development and will become clearer once draft legislation is published. According to a Cabinet Office written statement, the government aims for the new regime to take effect in December 2027.

In the meantime, businesses can prepare for the new regime by:

  • conducting a preliminary scoping assessment
  • reviewing and enhancing their existing human rights and supply chain governance frameworks, policies and processes 
  • developing an action plan that builds on compliance work under similar regimes, as discussed below. 
Legislative background

The announcement of the UK mHRDD regime follows the government’s review of the UK’s approach to promoting responsible business conduct, which focused on the global supply chains of businesses operating in the UK. The government found that the UK’s current framework for preventing forced labour is fragmented and overly reliant on voluntary action and reporting. The full outcomes of the review are not intended to be published.

 

The announcement also follows sustained calls for reform, including the Independent Anti-Slavery Commissioner’s model bill (December 2025), the Joint Committee on Human Rights’ 2025 report on forced labour in UK supply chains, and the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill, a Private Member’s Bill introduced in the House of Lords by Baroness Young of Hornsey in June 2026 that proposes broader human rights and environmental due diligence obligations.

Regulatory fragmentation amid global proliferation of supply chain laws

The UK mHRDD regime will join an increasingly crowded landscape of supply chain laws, and regulatory fragmentation continues to pose a significant compliance challenge for global businesses. The government expects the UK mHRDD regime and the EU Forced Labour Regulation (EUFLR), which is expected to apply in Northern Ireland under the Windsor Framework from December 14, 2027, to deliver similar outcomes: tackling serious abuses in global supply chains, safeguarding the competitiveness of responsible businesses and strengthening confidence in UK markets. 

In practice, however, businesses will need to grapple with differences between these regimes and other applicable laws, such as the EU Corporate Sustainability Due Diligence Directive (CS3D), as well as supply chain due diligence laws and forced labour bans in other jurisdictions. For more information, see our publication on the EUFLR.

Key areas of divergence include:

(i) Entities in scope

UK mHRDD regime Comparison with EUFLR and CS3D

The UK mHRDD regime will capture UK businesses with a global turnover of over GBP350 million and non-UK businesses with a UK-generated turnover of over GBP350m.

It remains to be seen how turnover will be calculated for groups. The appropriateness of the threshold will be reviewed every five years. 

For comparison, the reporting threshold under the Modern Slavery Act 2015 (MSA) is GBP36m. 

By contrast, the CS3D applies significantly higher thresholds: more than EUR1.5 billion in net worldwide turnover and more than 5,000 employees for EU companies, and more than EUR1.5bn in net EU turnover for non-EU companies.

Many businesses, including US-headquartered multinationals, that fall outside the CS3D may therefore be caught by the UK mHRDD regime.

The EUFLR does not prescribe threshold tests but applies to economic operators of all sizes (i.e., those placing or making available products on, or exporting products from, the EU or Northern Ireland). 

Although only the largest businesses will be directly in scope, the UK mHRDD regime is likely to have a much wider reach in practice for UK and overseas businesses. 

  • Suppliers, service providers and other business partners: The government’s rationale for the GBP350m threshold is that these businesses have “the capability and leverage to manage these risks within their supply chains”, and they can be expected to use that leverage. Suppliers, service providers and other business partners below the threshold, in the UK and overseas, should therefore expect more detailed due diligence questionnaires, audits, contractual warranties and remediation requirements as in-scope customers seek to evidence compliance. This mirrors the experience under the CS3D and the EUFLR, where smaller businesses are facing obligations passed down by larger counterparties.
  • Businesses whose products feed into in-scope supply chains: In addition, the power to withdraw goods made with forced labour from the Great Britain market attaches to the goods themselves. Businesses whose products feed into in-scope supply chains may therefore face commercial consequences, such as lost contracts or rejected shipments, even if they are not subject to the due diligence obligations themselves.
  • Businesses near the GBP350m turnover threshold: These businesses should also monitor how group turnover will be calculated and whether the scope is expanded following future reviews.

(ii) Due diligence obligations

UK mHRDD regimeComparison with EUFLR and CS3D

Under the UK mHRDD regime, businesses will be required to identify, assess and address risks of human rights abuses and labour exploitation within their operations and supply chains. The government has indicated that the regime imposes an “obligation of means”, i.e., expectations for businesses to adopt a risk-based approach to uncovering adverse human rights impacts in supply chains. 

Notably, the obligation extends to human rights abuses generally and is not limited to forced labour. The range of human rights abuses that will fall within scope is to be determined. The government has indicated that the regime will not cover adverse environmental impacts (see below).

The regime will be aligned with established international standards, including the OECD Guidelines for Responsible Business Conduct (OECD Guidelines) and the UN Guiding Principles on Business and Human Rights (UNGPs).

Early indications suggest that the UK mHRDD regime may be less onerous than the EUFLR and the CS3D in certain respects. In particular, unlike the UK proposal:

  • the EUFLR does not create additional due diligence obligations but notably imposes an absolute prohibition on non-compliant products (an “obligation of result”), regardless of any due diligence steps that may have been voluntarily taken; and
  • the CS3D mandates due diligence for both environmental and human rights adverse impacts, with reference to an extensive Annex of rights, prohibitions and obligations in legal instruments and international conventions. 

Given the links between human rights and environmental harms, campaigners continue to urge the government to extend the UK mHRDD regime to cover environmental harms. Apart from deforestation, the government has not indicated plans to introduce mandatory environmental due diligence. 

On deforestation, a consultation is expected ahead of new legislation to be introduced in 2027, establishing a due diligence regime to tackle illegal deforestation in supply chains.1 That regime is expected to operate alongside the EU Regulation on Deforestation-free Products, which will apply in Northern Ireland. It is not yet clear how the two UK due diligence regimes will interact.

(iii) Goods vs. services

UK mHRDD regimeComparison with EUFLR and CS3D

The UK mHRDD regime is intended to apply to both goods and services. In Northern Ireland, however, goods will be covered by the EUFLR’s forced labour ban rather than by UK due diligence obligations. 

  • The EUFLR applies only to goods.
  • The CS3D applies to business operations (covering in-scope businesses and their subsidiaries and business partners), thus broadly encompassing the provision of both goods and services. 

The government has indicated that financial institutions that meet the turnover thresholds will be in scope of the UK mHRDD regime, with obligations likely to focus on their own operations, subsidiaries and procurement. 

However, it is unclear whether these obligations will extend to financial institutions’ clients and financed or invested activities. This was a central and contested issue under the CS3D, where financial services were ultimately confined to the upstream part of the chain of activities, and this will be a key question for the financial sector as the UK proposal develops. 

Areas pending clarification in the UK mHRDD regime

The government has committed to work closely with stakeholders on the design and implementation of the UK mHRDD regime. Businesses will be eager for clarity on several key aspects, including the following:

Interaction between due diligence and reporting (and other) regimes

Businesses within scope of both the MSA and the UK mHRDD regime will want clarity over how the two regimes will interact, particularly as the MSA is to be amended (as part of the Immigration and Asylum Bill) to prescribe mandatory content for modern slavery statements, such as “information about the due diligence processes the relevant entity has implemented during the financial year in relation to slavery and human trafficking in its operations and supply chains”. The government has indicated that the UK mHRDD regime will draw on existing reporting under the MSA rather than imposing a new reporting track.

Businesses need greater clarity to fully update their compliance frameworks to meet the requirements of the UK mHRDD regime, alongside similar requirements under other applicable supply chain laws and forced labour bans globally. 

Upstream and downstream risks 

The information announced by the government so far does not provide a definition of “supply chains”, nor does it refer to “value chains”. The government has referred only to businesses’ “operations and supply chains”, and its framing (including references to businesses’ “leverage” over their supply chains and to “goods linked to forced labour” reaching UK consumers) points primarily to upstream risk.

However, the regime is to be aligned with the OECD Guidelines and the UNGPs, which extend a business’s responsibility to adverse impacts directly linked to its operations, products or services through its business relationships, potentially including downstream relationships.

How the legislation resolves this tension will significantly affect the extent of businesses’ obligations. A narrow, supplier-focused definition would largely build on existing expectations under the statutory guidance to the MSA, whereas a value chain approach could require businesses to assess customers, distributors and other downstream partners. 

Phase-in and proportionality measures

It is unclear how the government plans to deliver a “phased and proportionate approach”. The legislation may, for example, set different timelines for due diligence obligations to apply to different entities or embed the possibility of a future expansion in scope. 

Enforcement approach

The government plans to empower a regulator to investigate businesses suspected of placing goods made with forced labour on the market and, where due diligence obligations have not been met and forced labour is identified, direct their withdrawal. The regulator will also have targeted powers to confiscate or dispose of affected goods. 

However, the regulator has not yet been identified, and it is currently unclear how the government intends to enforce the UK mHRDD regime as regards services tainted by forced labour. This remains an area to watch for the financial services and other services sectors.

Sanctions and liability

Aside from withdrawal, confiscation and disposal of goods, the government has not announced specific consequences of non-compliance for companies and their directors and officers, nor whether the regime will give rise to civil liability.

By way of reference, proposed amendments to the MSA under the Immigration and Asylum Bill envisage penalties of up to the higher of 1% of total turnover or GBP1m for non-compliance, while the CS3D provides for penalties of up to 3% of net worldwide turnover.

Timing

There are continuing calls for a clear timetable and for legislation to be brought forward in this parliamentary session. A Cabinet Office written statement indicates that the government intends the new regime to take effect alongside the EUFLR, which applies from December 14, 2027, while the Explanatory Memorandum refers to application “no earlier than December 2027”. A full legislative timetable is awaited.

Guidance, tools and templates

To support business compliance, the government will “establish a centralised responsible business conduct guidance hub on GOV.UK, bringing together guidance, tools and templates in a single location”.

In the meantime, guidance under other UK laws and in other jurisdictions may serve as a useful reference point for businesses preparing for compliance. This includes: the statutory guidance to the MSA, which includes an annex of tools, guidance and resources for businesses; the European Commission’s guidelines on the EUFLR, which include guidance on voluntary forced labour due diligence; and the European Commission’s forthcoming CS3D guidance and voluntary model contractual clauses (to be finalised by July 26, 2027).

What should businesses do now?

There is no draft legislation yet, but the core expectations are already known: the regime will be aligned with the OECD Guidelines and the UNGPs. Businesses that expect to be in scope should consider the following steps:

  • Scope assessment: Assess which group entities may meet the GBP350m turnover threshold, including non-UK entities with significant UK turnover.
  • Gap analysis: Benchmark existing compliance frameworks against the OECD Guidelines and the UNGPs, with which the UK regime will be aligned.
  • Human rights exposure: Assess exposure to forced labour and other human rights risks in supply chains for goods placed on the Great Britain market, given the proposed withdrawal power.
  • Integrated compliance: Map overlapping and adjacent obligations under the MSA, the EUFLR, the CS3D and other regimes, with a view to building a single compliance framework that is scalable for meeting obligations under new regimes (e.g. UK mHRDD) as and when they are introduced across jurisdictions.
  • Contracts and suppliers: Review supplier contracts, codes of conduct and audit rights so that the business can obtain information and exercise leverage when needed (e.g. to remediate identified adverse human rights impacts). Retain evidence of risk assessments and of the actions taken.
  • Board oversight: Brief the board on ongoing and anticipated legislative developments and confirm where responsibility and accountability for adverse human rights impacts sit.
  • Engagement: Consider responding to the government’s stakeholder engagement on the design of the regime, directly or through trade associations.

To discuss next steps in view of these developments, and for more information on related developments globally, please get in touch with the authors Matthew Townsend (partner), Ying-Peng Chin (senior knowledge lawyer), James Ford (counsel) and Danae Wheeler (senior associate), or your usual contacts at A&O Shearman.

Footnote

1. The regime will aim to require businesses in Great Britain with an annual turnover of over GBP1m, that use forest risk commodities and wood products, to carry out due diligence to ensure these are produced in compliance with relevant local laws. See the policy paper on the UK’s approach to deforestation regulations.

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