On Anti-Slavery Day: Is the UK Modern Slavery Act the best way to tackle modern slavery?
The transparency in supply chains provision of the UK Modern Slavery Act (Act) has now been in effect for five years. The Modern Slavery Registry (Registry), operated by Business & Human Rights Resource Centre (Resource Centre), has been playing a central role in monitoring compliance with the Act and tracking reporting trends for a similar period. But five years on findings show that thousands of companies are failing to report or are not reporting on an annual basis as required by the Act. This patchy compliance is due, in part, to the lack of teeth available to hold companies legally accountable under the law.
The Resource Centre’s analysis of company modern slavery statements identifies a lack of progress on key actions such as mapping supply chains- i.e. the route the item takes; be it a t-shirt manufactured from cotton grown in an Uzbekistan field, processed in India, sewn into a t-shirt in Bangladesh and sold in a shop on the UK high street. There are also woeful levels of engagement by companies with their workers and worker representatives. While some companies have used the Act as an opportunity to build up fancy paperwork promising good governance and policies related to modern slavery, this has not necessarily translated into improved conditions for workers at the bottom of supply chains. For example, KnowTheChain research shows that many companies report having a no recruitment fee policy: key in high risk sectors as the charging of recruitment fees can drive workers into debt bondage. But far fewer companies have evidence of how the no-fee policy is implemented in practice by disclosing evidence that fees have been reimbursed to workers.
The government is seeking to strengthen the Act, answering calls for greater transparency within supply chains, including mandatory reporting requirements. But as most companies already report against the suggested criteria in the Act, what’s actually needed is a quality control mechanism which ensures companies disclose more detailed information to provide the full, real story.
Frustratingly, the government did not commit to the imposition of penalties on companies that fail to report under the Act. Instead, the UK Government continues to rely on the scrutiny of civil society, ethical consumers or responsible investors who have no power to enforce the legislation. So in the current situation the best that can happen is a small number of public facing companies *might* be subject to reputation risk. There is a clear lack of urgency on these efforts to amend and strengthen the Act, with no clear timeline and the government saying it will happen ‘when parliamentary time allows’.
More importantly, even with amendments the law falls significantly short on substance and will not have the necessary impact on corporate behaviour needed to effect real change and improve conditions for workers in supply chains.
Further, companies themselves are crying out something stronger. Research shows many support clear legal requirements which take action on human and labour rights. Not only is more regulation desired to create legal clarity and certainty, but also to provide a level playing field where all companies are subject to the same legal requirements. And in this regard the UK is in danger of being left behind as countries around the world including in France, the US and the Netherlands, have legal frameworks which move beyond transparency toward mandatory human rights due diligence (HRDD), and more to follow with the support of companies. The European Union (EU) will publish a draft mandatory human rights due diligence law in early 2021. The scope of the EU framework will extend to companies operating in the EU and cover UK-based companies, highlighting further just how futile the UK approach is to supply chains regulation.
A duty to prevent human and labour rights harms through HRDD requirements would achieve what the Act sets out to do - reduce and prevent labour exploitation in supply chains and uphold workers’ rights - but would do so more effectively than the Act. In requiring companies to prevent negative impacts on all human and labour rights, human rights due diligence would not only prevent modern slavery but would better enable workers to enjoy labour rights such as freedom of association, decent working conditions and fair wages. It could better address the drivers of vulnerability that push workers into increasingly precarious situations.
For example, paying a living wage would alleviate poverty. Supporting trade union membership would give workers the agency to improve their terms of employment and working conditions.
Importantly, HRDD would no longer allow companies to declare a job well done because they had not identified risks of modern slavery in their operations and supply chains. The absence of modern slavery risks does not mean there is no labour abuse. Forthcoming research by the Resource Centre on the cleaning sector illustrates this point well. Cleaners, mostly female, migrant workers, face a number of a labour abuses, such as shockingly low wages, unpaid overtime, discrimination and union suppression. None of these practices amount to a modern slavery offence under the Act, but this should not relieve the responsibility companies have to urgently address this prevalent abuse.
The COVID-19 pandemic has already pushed millions of workers further into precarious work situations. The pandemic will soon collide with Brexit and the new immigration system will effectively close borders to low-skilled and low-wage workers. The demand for such work will only increase post-Brexit as will the opportunities for exploitation. The government must take this opportunity to regain its leadership role and follow the inevitable trend toward human rights due diligence. It is not a silver bullet, no legislation is, but it will go further than current anti-slavery laws to provide dignity for all workers toiling to provide essential services for the global population.