How can businesses limit the risks of condoning conditions of modern slavery?

There are practical steps businesses can take to limit the risks of labour exploitation and conditions of modern slavery, write the University of Hull’s Alicia Kidd and Fresca Group’s Shayne Tyler

‘Modern slavery’ is a term being used more and more in the media, accompanying stories of horrendous situations of exploitation. But there’s an assumption that we all know what the term means, just because of its association with slavery.

While the transatlantic slave trade of the 18th and 19th centuries has long been legally abolished, ‘slavery’ continues to exist today in many different forms, victimising men and women, adults and children, across the world.

Slavery in the supply chain: mitigating the risk

What can businesses do to mitigate the risk of slavery in their supply chains? Modern slavery or worker exploitation is not a fixed issue, it does not look the same each day and those that exploit others are doing everything they can to hide it. As soon as you implement a system, the exploiters are already considering how best to circumvent it.

Tackling the crime on a practical level is extremely difficult, but there are some steps that businesses could take to try and limit risk of labour exploitation:

Business mindset

  1. Accept that your business or supply chain has been, is currently, or will be infiltrated by those wishing to exploit your staff. Assuming otherwise is naïve.
    1. Understand the exploiter as a competitor. This changes your mindset to find tactics to    prevent them conducting their business in your supply chain. This puts them out of business   and creates a safe environment.
    1. Recognise that the victims are unlikely to tell you of their exploitation; you must do the leg work to find it. The people most likely to find exploitation are working directly with the          victims, so target training at the lowest level.
    1. Create safe reporting mechanisms that enable the potential victims, or those with concerns, to escalate issues.

Business systems

  1. Create barriers for the exploiters, including irregular audit programmes, providing staff with information on their rights and entitlements and multiple platforms for sharing concerns. Promote that you can help a potential victim, but be careful what you communicate regarding your tactics for tackling exploitation. The exploiters want to know what you are doing so they can adapt to evade it.
  2. Create cultures and safe environments by treating the welfare of staff with the same priority as health and safety and by increasing awareness and training. Ensure that it is everyone’s responsibility to care for the welfare of fellow colleagues and consider it a positive when concerns are reported. Treat reporting as a potential near miss and the prevention of an incident.

Business maturity

  1. Refrain from investigating yourselves (though it can be difficult to give up control) and build strong relationships with authorities that can help, such as the UK’s Gangmasters and Labour Abuse Authority. A business’ job is to protect the victim, their own staff, the evidence and report it.
  2. If you have concerns that a supplier is exploiting workers, do not simply end the contract immediately. A zero-tolerance approach can increase the risk to victims as, without one contract, they will continue to be exploited elsewhere while the supplier may need to cut costs further because of lost income. Instead, discuss the issues with the supplier and set a date for them to rectify those issues. If the supplier fails to engage, or improve by the designated date, then a zero-tolerance approach should be taken, but only once a process for the protection of workers that stand to be affected by the contract’s termination has been established.

Case study: modern slavery in the UK

In 2018, 6,993 people were identified in the UK as potential victims of modern slavery. Males represented 61% of victims; 39% were female, and there were four transgender victims. More than half of these cases (57%) were situations of labour exploitation, making it the most common form of modern slavery identified in the UK. Interestingly, and of great concern, of the 6,993 victims identified, 55% were adults, and the remaining 45% were children. Almost two thirds (63%) of those children were victims of labour exploitation.

It is also important to note the huge range of nationalities that are identified as victims of modern slavery in the UK. In 2018, potential victims were identified from 130 different countries, yet almost a quarter of victims (23%) were UK nationals, emphasising the fact that this crime can affect anyone regardless of gender, age or nationality.

The figures cited above represent only those people who have been identified and agreed to talk to authorities about their experiences. There will be considerably more who, unfortunately, have not yet been – and may never be – found. This makes it extremely difficult to estimate with any accuracy the number of people who may be living in situations of modern slavery in the UK. Estimates range dramatically from the Home Office’s 13,000 to the Global Slavery Index’s predicted 136,000. While the discrepancy between these figures is significant, they both highlight that the numbers of people identified are not reflective of the likely number of people actually being exploited in the UK.

Statistics on labour exploitation in the UK could be a real wake up call to many businesses that haven’t considered the possibility that modern slavery may exist within their organisations. While we can hope that no companies are wilfully aware of the exploitation of their workers, for many, supply chains are so complex that they may simply be oblivious to the recruitment methods and working conditions of all the workers involved in their products or services.

However, the Modern Slavery Act is working to encourage businesses to gain a better understanding of the labour practices within their supply chains.

Along with providing definitions, the Act is particularly important for businesses, and specifically relevant for those with a turnover of over £36 million GBP.

Section 54 of the Modern Slavery Act is the Transparency in Supply Chains Clause. This part of the Act exists to encourage businesses to scrutinise their own supply chains in order to limit the risk of labour exploitation in their own organisations. Under this clause, any commercial organisation that supplies goods or services and has an annual turnover of over £36 million GBP must produce an annual slavery and human trafficking statement identifying what the organisation is doing to mitigate the risk of exploitation in their supply chains.

Is the UK’s legislation working?

While it is important to encourage businesses to prevent and tackle modern slavery, there are a number of flaws with this legislation. Firstly, while the Act offers guidelines as to what may be included in a statement, there are no standardised requirements. This is hugely unhelpful when trying to encourage businesses to be proactive.

Secondly, because of this lack of guidance, it is entirely legal for an organisation to publish a statement announcing that they are doing absolutely nothing to tackle the risk of slavery or human trafficking in their business. As long as they have published the statement, they are considered compliant; this is regardless of the content of the statement.

Thirdly, Section 54 intimates an unlimited fine for businesses that fail to comply with its requirements. However, the UK is now four years into the act and, of the organisations obliged to publish slavery and human trafficking statements, the compliance rate is just 77%. Yet, to date, no fines have been imposed. This inability to follow through makes it easy to wonder whether the expense of researching and writing a slavery and human trafficking statement is really worth it when there doesn’t seem to be any risk of punitive measures. And why risk investigating a supply chain and potentially finding exploitation if you can legally announce that you’re not interested in protecting your workers?

The purpose behind Section 54 of the Modern Slavery Act was to ‘create a level playing field between companies that were already acting responsibly and companies that still needed to change their policies and practices.’

However, in reality, those businesses that are engaged and compliant are potentially at a disadvantage. If they were to proactively investigate their supply chains and identify workers being exploited, they risk negative press, even if they rectify the issue. Whereas those businesses that choose not to interrogate their supply chains are not actively seeking to redress any potential exploitation, and yet they do not face any punitive measures or bad press for this lack of action.

If a business reports finding issues and is criticised for it, then it simply will not continue to look. Businesses often want to operate ethically but, understandably, do not want to advertise negative findings. This means that pressing ahead with an agenda to force businesses to publish when they find issues will be counteractive to the objective we want to achieve.

However the UK’s government recently commissioned a review of the Modern Slavery Act, with business reporting as one of its key areas of focus. The review acknowledged that the requirements on business were groundbreaking and that they held potential for positive change, but that the impact thus so far had been limited. The recommendations made in this review were targeted at overcoming the issue of proactive businesses finding themselves in a worse situation than those choosing not to report. The review urges changes to ensure that this does not continue, including removing the option for businesses to report that they are taking no action. It also calls for action in response to non-compliance, starting with warnings and fines, escalating to court summons, and risking the disqualification of a director should the business remain non-compliant.

Should the UK government decide to take these recommendations on board, then there is hope that the proactive companies already scrutinising their supply chains will no longer face negative attention for their positive action. If all companies are held accountable to the same standards in making their supply chains transparent, then there is potential for real value to come from this clause of the Modern Slavery Act. Currently, without the buy in from all the required businesses, the clause simply counteracts its own objectives by unintentionally penalising those with best practice.

What is modern slavery?

In the UK, 2015’s Modern Slavery Act uses ‘modern slavery’ as an umbrella term, covering the two subheadings of:

  1. Slavery, servitude, forced or compulsory labour
  2. Human trafficking

Put simply, ‘slavery, servitude, forced or compulsory labour’ involves using a person in order to benefit from their exploitation. Victims tend to be recruited through means such as force, coercion, abduction, fraud, or deception.

‘Human trafficking’ situations differ slightly by involving some degree of movement, though the movement could be within a country and does not necessarily require crossing an international border.

Modern slavery, as listed by the UK’s National Referral Mechanism form for potential adult victims, covers a range of types of exploitation.

  • Labour exploitation is where people are made to work in conditions that they didn’t agree to, sometimes with very little, or no pay.
  • Criminal exploitation can involve victims being forced to shoplift, beg, or grow or transport drugs. In these situations, the victims risk being arrested for crimes that they committed under force, sometimes so fearful of their exploiter that they daren’t disclose the truth of the situation and risk facing time in jail as a consequence.
  • Sexual exploitation involves people being sexually abused. It may mean being held and abused by a single person, or even being held in a brothel, used in the pornography industry or sold as an escort.
  • Domestic servitude is where a victim is required to do household chores, such as cooking, cleaning and sometimes even caring for children, for little to no pay. Victims don’t tend to have their own space, sleeping on a sofa or a floor, and are essentially on call 24 hours a day.
  • Organ harvesting is also a form of modern slavery, where a victim’s organ(s) are sold to someone needing a transplant.

Alicia Kidd is a Postdoctoral Researcher at the Wilberforce Institute, University of Hull. She is also Vice Chair of the Humber Modern Slavery Partnership.

Shayne Tyler is the Group Compliance Director at Fresca Group and has firsthand experience of identifying cases of modern slavery in supply chains.

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