Eliminating Modern Slavery: Due diligence and the rule of law
It's 2017. The world is three times richer in terms of global GDP than it was 30 years ago, yet we have historic levels of inequality. Eighty per cent of the world's people say that the minimum wage is not enough to live on, work is more insecure with a predominance of short-term contracts or other non-standard forms of employment, and both informal work and modern slavery are not only growing but increasingly prevalent in the supply chains of large corporations.
Modern slavery is everywhere. From the construction of World Cup stadiums in Qatar to the cotton farms of Uzbekistan...The production chains of clothes, food and services consumed globally are tainted with forced labour.
How do we clean it up?
Let's start with human and labour rights. No corporation or investor would blindly sign a contract, enter into a merger or risk large sums of capital without doing due diligence. Assessing risk is a cornerstone of successful business practice, and corporations expect the rule of law to protect their interests.
Yet when it comes to the very people companies rely on to produce their profits, few respect the rights of, or take responsibility for decent work, for workers. Up to 94 per cent of the global workforce of 50 major corporations is a hidden workforce because responsibility has been outsourced many times over.
Due diligence is the key. Where corporations take responsibility for due diligence and consequently make their supply chains transparent, then it is possible to establish grievance procedures that can facilitate remedy of any violations of rights at work from forced labour to paying below the minimum wage.
A range of existing international standards and emerging national laws, based on the UN Guiding Principles on Business and Human Rights (UNGPs), emphasise the role of due diligence in identifying and avoiding risks to human rights, including the risk of modern slavery, which is now up to 45 million people and growing.
Under the UNGPs, companies should have in place “a human rights due diligence process to identify, prevent, mitigate and account for how a company addresses their impacts on human rights”.
Article 2(e) of the ILO Protocol on forced labour calls on member States to take measures “supporting due diligence by both the public and private sectors to prevent and respond to risks of forced or compulsory labour”.
Mandatory due diligence laws put the onus on companies to demonstrate that they are taking all necessary measures to identify, prevent and mitigate incidences of modern slavery in their operations and supply chains.
Mandatory due diligence laws put the onus on companies to demonstrate that they are taking all necessary measures to identify, prevent and mitigate incidences of modern slavery in their operations and supply chains. Some model mandatory due diligence laws also include provisions that under certain circumstances allow civil and criminal proceedings to be filed against companies that fail to carry out the required due diligence.
The beginning of 2017 saw the adoption of new due diligence bills in France and in the Netherlands. On 7 February, the Dutch Parliament adopted a Child Labour Due Diligence Bill, which will require Dutch companies to identify the risk of child labour in their supply chains and develop a plan to address risks of child labour. On 27 March, the French Parliament adopted a new devoir de vigilance bill requiring large French companies to develop and enact an effective duty of care plan (plan de vigilance). A breach of the duty of care may still entail liability for a company in the event it causes harm. A proposed constitutional amendment in Switzerland would also mandate due diligence to prevent human rights abuses, including modern slavery, for Swiss companies.
Pressure is mounting in the UK. On 5 April, the Joint Committee on Human Rights of the UK Parliament published a report on human rights and business recommending that the UK government propose legislation making reporting on due diligence for all human rights compulsory for large companies, with a monitoring mechanism and an enforcement procedure. Importantly, the Committee recommended that the government impose a duty on all companies to prevent human rights abuses and to establish a criminal offence of “failure to prevent” abuses for all companies, including parent companies.
Likewise, European governments are being lobbied to develop EU-wide legislation on mandatory due diligence. In 2015, members of the European Parliament adopted a motion calling for a resolution on mandatory human rights due diligence for companies. In 2016, eight national parliaments launched a “green card” initiative at the EU level calling for a human rights duty of care towards individuals and communities from EU-based companies whose human rights and local environment are affected by their activities.
And the global labour movement has successfully lobbied the G20 governments who have committed “to ensure that violations of decent work and rights at work cannot be part of competition with mandated due diligence for human rights in global supply chains not be part of competition”.
Taking workers’ rights out of competition between countries will only grow as countries ratify the new ILO Forced Labour Protocol to fight modern slavery. The Protocol with its accompanying recommendation, the MNE declaration amended in 2017, together with the UNGPs and the OECD Guidelines and the new general Due Diligence Guidance developed by the OECD, now provide governments with clear international standards to address modern slavery in business operations and supply chains.
Governments must ratify the ILO Forced Labour Protocol as the basis of a legislative mandate for supply chain transparency and due diligence backed by compliance that ensures both a grievance procedure and remedy for workers.
A UN Treaty, currently in negotiation, would ensure a global mandate, but in the meantime for the ITUC it's clear. Governments must ratify the ILO Forced Labour Protocol as the basis of a legislative mandate for supply chain transparency and due diligence backed by compliance that ensures both a grievance procedure and remedy for workers.
In particular, national legislation that includes mandatory transparency provisions should:
- Include requirements to report on known instances of modern slavery in a company’s operation and supply chains, and to provide consistent information about whether the measures companies are taking are effective or not;
- Have extra-territorial reach and apply to all companies regardless of where their country of headquarters is located;
- Make approval of the board of directors, sign-off by senior management and prominent disclosure of the statement on the company’s website a legal requirement;
- Require annual statements that demonstrate progress over time;
- Publish a list of the companies required to produce statements under the laws and maintain a free accessible registry and benchmark with information regarding company compliance;
- Provide robust monitoring and enforcement mechanisms including labour inspectorates and impose sanctions where companies fail to produce a modern slavery statement, produce statements that fail to meet the minimum requirements, produce statements that lack mandatory information on due diligence practices, or report they have not taken any steps to address their modern slavery risks;
- Include provisions similar to the US Trafficked Victims Protection Act, which would enable victims of modern slavery to access civil and criminal remedy; and
- Provide clear official guidance prior to the law taking effect and allow for third-party complaints to the court system where the process fails.
Governments can't be exempt and model public procurement due diligence legislation should be included on the same terms.
Modern slavery is everywhere. From the construction of World Cup stadiums in Qatar to the cotton farms of Uzbekistan, from cattle ranches in Paraguay to fisheries in Thailand and the Philippines to agriculture in Italy, from sweatshops in Brazil and Argentina to berry pickers in Sweden. The production chains of clothes, food and services consumed globally are tainted with forced labour.
In the global private economy, the ILO calculates forced labour generates US$150 billion each year but it could be even higher. In all countries, unscrupulous employers and recruiters are increasingly exploiting gaps in international labour and migration law and enforcement.
In the global private economy, the ILO calculates forced labour generates US$150 billion each year but it could be even higher. In all countries, unscrupulous employers and recruiters are increasingly exploiting gaps in international labour and migration law and enforcement. After drugs and arms, human trafficking is now the world’s third biggest crime business.
Cleaning it up is possible, but the critical ingredient is political will. G20 Labour Ministers accept that the global economy cannot be built on oppression and rights violations; now we need government leaders to stare down corporate greed. Everybody's sons and daughters must be afforded their rights, wages and decent work we want for our own.
This blog is part of a wider blog series: Towards an International Modern Slavery Agreement