“My Government will lead the way in defeating modern slavery…This is the great human rights issue of our time, and as Prime Minister I am determined that we will make it a national and international mission to rid our world of this barbaric evil.” Theresa May, Prime Minister.
As a result of the seismic political upheaval this year, it is easy to forget that the Prime Minister, Theresa May, was the UK’s longest serving Home Secretary. During this time, she brought forward the UK’s groundbreaking Modern Slavery Act 2015 (MSA). Now May is Prime Minister, she has wasted no time at all in setting out her political agenda to tackle the crimes of modern slavery further.
This year a British company has been found liable for the first time for victims of modern slavery in a landmark High Court judgment. The court found in favour of six Lithuanian men who were trafficked to the UK and brought a civil case claiming compensation for being severely exploited. The amount of compensation will be assessed but is expected to run to hundreds of thousands of pounds for unpaid wages alone. A claim for personal injury is still to be heard. In the UK, corporate liability for modern slavery has become very real, as the company involved was part of the supply chain for some very well-known supermarkets and fast food restaurants.
So what can we expect from May’s Government?
May has now established the first ever Government task force on modern slavery, which has been given responsibility for raising awareness of these crimes as well as improving training of those in the UK’s criminal justice system and support for victims. A new HMIC Inspection has been commissioned to make sure that all police forces treat these crimes with greater priority. The UK’s Anti-Slavery Commissioner will work collaboratively with law-enforcement agencies across the world to track and stop gangs trafficking across borders and jurisdictions. The Government is also investing over £33 million from the UK’s aid budget to create a five-year International Modern Slavery Fund focused on high-risk countries.
Elsewhere the Joint Committee on Human Rights is currently considering the progress made by the UK Government in implementing the United Nations Guiding Principles on business and human rights, by means of the National Action Plan published in 2013 and revised in May 2016.
Business should anticipate that our UK Government will herald the international effect of the MSA. For the unaware, the MSA requires both UK and foreign companies and other commercial organisations (including partnerships and LLPs) that carry out any business involving goods and/or services in the UK and have a global annual turnover of £36 million or more to prepare and publish a slavery and human trafficking statement for each financial year ‘as soon as reasonably practicable after the end of each financial year’. We can expect the UK to be more visible on the global stage in tackling modern slavery abuses.
Improved regulatory oversight
With the recent enactment of the Immigration Act 2016 came a new director of Labour Market Enforcement in the UK. This new director will be responsible for bringing together three of the UK’s main labour inspection authorities: HM Revenue and Customs national minimum wage enforcement teams, the Employment Agency Standards Inspectorate and the new Gangmasters and Labour Abuse Authority. The Gangmasters and Labour Abuse Authority will expand its mandate to different labour sectors according to risk – as dictated by the new director. The Government has been clear that it expects the Authority to take action when it uncovers cases of possible modern slavery.
Increased scrutiny of annual anti-slavery and human trafficking statements
Businesses that have published their first anti-slavery and human trafficking statements now appreciate that these statements are not just appearing on their own corporate website but are being collated and analysed by civil society. Both Ergon Associates and the Business & Human Rights Resource Centre have created a registry of statements with commentary while KnowTheChain has published a benchmark of 20 ICT companies. It assessed information available on each company’s own website as well as further public disclosure that over half of the companies provided in response to engagement questions. In addition, the 10 biggest ICT companies in the world by the FT500 are now in the UN Guiding Principles Reporting Database. This captures what these companies say about how they are implementing the UN Guiding Principles on Business and Human Rights based on their public disclosure.
Greater focus on supply chains
“The message to companies now is that they must go beyond compliance, do their due diligence and take meaningful action to combat slavery in their supply chains. The apparent lack of senior level involvement and statements not being easily accessible from companies’ homepages is a worrying indicator that this isn’t being taken seriously enough within businesses.” Marilyn Croser, director of the CORE coalition (the UK civil society coalition on corporate accountability).
Generally the reaction from civil society to the first statements is underwhelming. In particular, there is criticism of businesses for their lack of transparency concerning their due diligence of the risks of modern slavery in both their operations and supply chain and for an absence of key performance indicators to track improvements. It is therefore prudent to expect future MSA statements to receive greater scrutiny in respect of supply chains; as “name and shame” techniques do get the attention of senior management. This is one of the inherent business/reputational risks of having to publish an annual statement listing supply chain programs that are being undertaken. The risk is not limited to large organisations. We are already seeing businesses in the UK with financial turnovers far below £36 million having to proactively engage in order to be able to compete for future projects/contracts within supply chains. This is no surprise as it was one of the stated aims of the MSA; to raise the bar in supply chains even if it meant raising it in excess of local labour law compliance.