In the wake of the U.K.’s Modern Slavery Act, there is no doubt that large companies are taking their obligations to monitor their supply chains for incidences of child, forced, or bonded labour seriously. But there is evidence to suggest that their focus—typically on suppliers and contractors working in developing countries with histories of lax controls, oversight and enforcement—may result in overlooking exploitation that is happening right under their noses in the United Kingdom.
Unfortunately, there is plenty of evidence of slavery in the United Kingdom. Most recently, on 16 June a Nottingham landlord received an eight-year prison sentence after pleading guilty to human trafficking, two counts of forced labour, and fraud.
Some cases have resulted in stiff penalties. In May 2016, four Latvians were jailed for a combined total of more than 23 years for offences relating to the exploitation of migrant workers, while in November five members of a Plymouth family (all from the Czech Republic) were jailed for a total of 20 years following the first prosecution for human trafficking offences in Devon and Cornwall.
In January 2016, the Gangmasters and Labour Abuse Authority (GLA), which investigates forced labour offences, became the first UK law enforcement agency to use new powers under the Modern Slavery Act to secure a Slavery and Trafficking Prevention Order (STPO) for labour exploitation. Judges can use such orders when they feel that there is a significant risk that defendants might re-offend.
The case involved two Lithuanian nationals who admitted transporting two male twins from Lithuania to Norfolk and subjecting them to forced labour in food factories in Suffolk. The twins were paid a combined total of £20 for four months work. They were starved and forced to sleep on the floor in accommodation described as “barbaric”. As well as receiving STPOs, the traffickers were each given three-and-a-half-year prison sentences.
Recent research has identified that awareness of U.K.-based slavery is growing. The number of potential victims of labour exploitation referred as part of the framework set up to identify victims of modern slavery in the U.K. increased by 33 percent between 2015 and 2016, according to analysis of National Crime Agency data by forensic risk specialist Kroll.
The data, which is taken from the National Referral Mechanism (NRM)—the framework in which potential victims of human trafficking or modern slavery are referred by authorised agencies such as police forces, the UK Border Force or Social Services—reveals that there were 1,575 referrals for labour exploitation in 2016. Seventy percent of these were adults, and 30 percent minors.
“Firstly, with an estimated 13,000 victims of modern slavery, the U.K. is still far from immune to this type of appalling human rights abuse. Secondly, the sharp increase in the number of referrals shows that awareness and detection of modern slavery has improved since the introduction of the Modern Slavery Act.”
Kevin Braine, Head of Compliance Practice (EMEA), Kroll
According to Kroll, the increased numbers cast a spotlight on an issue that is of increasing concern to businesses, particularly in sectors such as retail and manufacturing.
Kroll’s analysis shows that Vietnam was the country of origin for the highest number of potential labour exploitation victims referred in the U.K. in 2016, with 307 individuals. Albania followed in second place with 194 potential victims, while Poland came third with 140. However, Kevin Braine, head of Kroll’s compliance practice (EMEA), says that these numbers “may just be scratching the surface of what the true figures could be.”
“These numbers demonstrate two things,” says Braine. “Firstly, with an estimated 13,000 victims of modern slavery, the U.K. is still far from immune to this type of appalling human rights abuse. Secondly, the sharp increase in the number of referrals shows that awareness and detection of modern slavery has improved since the introduction of the Modern Slavery Act.”
Experts believe that the approach that companies use to detect possible incidences of forced labour in their overseas supply chains could easily be used to monitor and audit U.K. based companies too.
Aidan McQuade, director at human rights organisation Anti-Slavery International, says that there is no difference in the methods that companies should use to determine whether there are incidences of forced labour in their supply chains in the U.K. or in places like India, China and other emerging markets. He adds that the tell-tale signs of forced labour are also often the same.
“Check to see if the company is undercutting its’ nearest rivals, and by what margin. If the cost looks too low, you should assume that forced or child labour is being used somewhere in the process. Other warning signals may be if the supplier refuses to agree to onsite audits, refuses to provide details of its suppliers or subcontractors, or does not allow unionised labour,” says McQuade.
Moreen Romans, senior director, global supply solutions, risk and supplier diversity at credit rating agency Dun & Bradstreet, recommends a five-step process to help detect modern slavery in U.K. operations. These are:
Identify who the risky suppliers are in your supply chain;
React to that information with additional monitoring and investigation to identify problems;
Track and report findings and relevant information;
Adjust your approach by replacing suppliers connected to forced labour; and
Monitor continuously to assure data, information and analysis is current, including regular audits.
Anna Fletcher, director at law firm Gowling WLG, says that a compliance checklist for minimising the risk of modern slavery, should start with a “top down” commitment to tackling modern slavery, as well as the establishment and communication of a code of conduct for staff and suppliers alike. She says that companies need to engage with the entire workforce to raise awareness about modern slavery and how they can identify “tell-tale” signs, and know how to report them and take action.
Fletcher also advises that companies should review the recruitment practices that they and their suppliers use to ensure they are fit for purpose, as well as ensure that there is a transparent process for confirming the way in which these suppliers operate (usually better guaranteed through the strength of the relationship with a tier one vendor). “Overarching this,” she says, “should be a clear set of performance indicators with which to assess suppliers—and their suppliers—activities, with the issue of slavery and exploitation being a key element.”
U.K. response to slavery criticised
Despite being a leader in trying to tackle slavery, the U.K. government, it seems, is still falling short in its attempts to address the problem properly. At the end of April a cross-party group of MPs, the Work and Pensions Committee, published its report on victims of modern slavery.
The report said that while there is an estimated 10,000 and 13,000 slaves in the United Kingdom, the current mechanism for identifying and supporting them out of slavery means that victims, once identified, have no automatic formal immigration status or rights and are often faced with a total lack of understanding or even recognition of their situation. MPs said the system’s failures were “inexcusable”.
The committee also found that front line support is weak and uncoordinated and instances where a person is re-trafficked are not even recorded, which “helps to explain the country's appalling conviction record”. It heard testimony of one victim, Client M, who “escaped from his traffickers but it took four years before someone recognised that he was a potential victim of modern slavery … the adviser in the Jobcentre [who knew his story] did not pick up on that … he lost four years before someone finally offered him the help and pointed him where he should go further.”
MPs were also critical that front-line Department for Work and Pensions (DWP) staff are often not aware of modern slavery and have called for more training on how to spot tell-tale signs and deal sensitively with identified victims. The committee said that lack of awareness, training and understanding, as well as lack of proper support for victims, is having a negative impact on the number of successful prosecutions of slave masters.
Labour MP Frank Field, the committee’s chair, said that the Government’s response to slavery in the U.K. was “almost lackadaisical”. He added that “no society worth its salt can allow this to continue, or fail to support those who fall victim” and urged the government to “conduct an urgent review of our national response and put in place some basic minimum safeguards, status, that will allow a person to begin to rebuild a life, testify against their abuser if they feel able, and above all, be protected from the unimaginable but real possibility of falling victim again.”
—Neil Hodge
Matt Cormack, partner at law firm Ward Hadaway, advises companies to analyse the industry. “The most common instances of people being trafficked into forced labour occur in industries such as agriculture, construction, hospitality and manufacturing. Consider the overall risk profile of your industry, then tailor your response and due diligence accordingly to the high and medium risk areas identified,” he says.
Paul Johnson, executive partner at the same firm, also advises companies to provide training to ensure that employees know how to spot signs of modern slavery, and understand the requirements of the Modern Slavery Act. He also says that companies should consider requiring the personnel of high and medium risk suppliers to undertake training alongside their own teams.
Perhaps most importantly, says Cormack, companies should make sure that their contracts include strong contractual rights, including rights to visit a supplier’s facilities on an independent and unannounced basis. But he adds: “Ensure that you restrict sub-contracting of work to known and identifiable sub-contractors, and that audit and visit rights extend to these entities.”
Some companies have already fallen foul of incidences of slavery in their U.K. supply chains, but have learned from the experience and have put in place tighter controls as a result.
In January 2016, the boss of a bed-making firm that supplied major retailers including John Lewis and Next was found guilty of human trafficking. Mohammed Rafiq employed large numbers of Hungarian men as a “slave workforce” at the now defunct Kozee Sleep in Ravensthorpe, Dewsbury, West Yorkshire. He paid them as little as £10 per day. The company’s clients had conducted ethical audits, but they had failed to spot what was going on.
Consequently, John Lewis Partnership (JLP), which owns high-street retailer John Lewis and supermarket chain Waitrose, has substantially changed the way it works with U.K.-based suppliers to identify and protect vulnerable workers, according to the company’s latest human rights and modern slavery report.
Firstly, the high-street retailer has become a member of the “Fast Forward” programme, which aims to measure and improve labour standards, increase supplier transparency and protect vulnerable workers in the United Kingdom. As part of this programme, John Lewis hosted a number of workshops for suppliers covering modern slavery, right to work, contracts and health and safety. Some 107 suppliers took part in these workshops.
The company has also launched a Model Factory Programme, which has tested a new detailed auditing methodology used by the Fast Forward initiative (10 factories took part in 2016). It has also conducted confidential online worker surveys at each participating factory with the support of worker representative councils and union representatives. “It is hoped that feedback from these surveys will support managers to facilitate more meaningful discussions with their workers to address issues that will improve their experience of being at work,” says the report.
The Fast Forward audits have shown that there is room for improvement on recruitment processes and personnel checks so that they are robust and fit for purpose. In addition, the audits have found that many suppliers have limited due diligence measures in place to assess labour providers used to supply their workers.
In 2017 John Lewis Partnership will work with Model Factory Programme participants to review results of worker surveys and audits. It will support them to develop action plans and complete training programmes to address issues identified. The company also hopes to extend the Fast Forward audit methodology for all suppliers’ factories in the U.K.
Meanwhile, the report also found that during 2016/17 Waitrose’s auditing process identified eight instances where management processes “had not been followed as they should have,” which could have increased the risk of modern slavery. It says that risk assessments were carried out on Waitrose suppliers on 13 sites in the United Kingdom, Spain and Italy, responsible for growing mushrooms, leeks, cabbages, salad crops, tree fruit and tomatoes.
No comments yet