Slavery

Baroness Kennedy of Cradley Excerpts

Thursday 30th October 2014 Lords Chamber

Asked by

[Baroness Kennedy of Cradley]

To ask Her Majesty’s Government what steps they are taking to combat slavery in supply chains nationally and internationally.

[Baroness Kennedy of Cradley (Lab)]

Slavery is hidden here in our communities and exists in every country in the world. It is a growing part of our national and international economy. Walk Free’s global slavery index estimates that there were 29.8 million people enslaved worldwide with 4,500 people in modern slavery in the UK. Thanks to campaigners, NGOs, businesses, trade unions and journalists, the issue of slavery and supply chains is once again under the spotlight—and rightly so. Together they have uncovered some of the worst examples of slavery in supply chains.

Over the years, cheaper transport and communication costs have dramatically changed the way consumer goods are produced. Multinational corporations now have production plants around the world, allowing them to take advantage of cheaper labour and local markets. They outsource more and more stages of their production to different suppliers in different countries, which in turn employ subcontractors to manage demand and beat the competition. In this way, supply chains get very long and very complex. One multinational business can be interconnected to thousands of workplaces and millions of workers. The sad fact is that these complex supply chains can allow slavery to thrive.

Research commissioned by the Chartered Institute of Purchasing and Supply showed that more than one in 10 business leaders admitted that it is likely that modern slavery is playing a role in their supply chains. Research by Verité found that forced labour affected one in three workers in the production of electronic goods in Malaysia. Malaysia is a major global manufacturing hub for the electronics industry, supplying the world’s most recognisable brands. This means that nearly every device that we buy has a root in Malaysia and therefore a root in slavery—roots that the ILO estimates lead to worldwide profits of $150 billion every year.

Allowing a person’s human rights to be abused in the pursuit of profit should never happen. As multinational businesses enjoy the profits afforded to them from increased global production, so too must they accept responsibility for the working conditions of their global workforce. This has to be the deal. Consumers expect it to be the deal. Through this deal, multinational corporations have the power to make a real difference to the working lives of millions. They have the power to reform their business models so that they are less reliant on outsourcing and suppliers who subcontract. Many businesses now shorten their supply chains and build partnerships with suppliers they trust.

We know, thanks to the exposé by the Guardian into the Thai fishing industry, how dark things can be for workers at the bottom of a supply chain—involving kidnap, torture, and execution—and all to provide fish feed for the prawns on our supermarket shelves. Multinational corporations have the power stop this and improve the working conditions of those enslaved by exploitative suppliers. They have the power to insist on inspection regimes and can support local efforts to empower workers through collective bargaining and trade unions.

The horror stories that we hear are truly shocking: workers getting little or no wages; passports seized so that there is no escape; locked in flea-infested shelters, seven to a room; scared into compliance by beatings and vicious dogs; and then squashed into vans to spend days travelling from farm to farm. This is not a horror story from a far-flung country on the other side of the world, but the story of slavery from Kent. Thirty migrant workers held in debt bondage here in the UK—working on a farm supplying eggs to our supermarkets and fast-food restaurants.

Sadly, examples like this are not isolated incidents. Recent figures from the Salvation Army reported that, over the past year, victims of labour exploitation have overtaken the victims of sexual exploitation for the first time. Multinational corporations have the power to insist on decent wages and formal contracts for all workers here in the UK and across the world.

Of course, the exploitation of workers producing goods for major brands is not new. Since the 1990s, charities, the media and trade unions have been shouting loudly about the abuse suffered by workers. In response, many businesses have adopted voluntary codes and developed programmes to help deliver decent working conditions in their supply chains. Many have been members of the Ethical Trading Initiative since it began in 1998. When giving evidence to the pre-legislative scrutiny committee, of which I was a member, the British Retail Consortium said:

“Companies don’t want this in their supply chains. .... and retailers have been working really hard to try and root it out”.

Good businesses want to do the right thing. They understand that an enhanced reputation for fair working practices can attract investment and consumers. These voluntary initiatives are welcome and have had success. But they are not enough. Good businesses want the Government to legislate on supply chain transparency to level the playing field. Legislation would make sure that the good companies are not undercut by the bad.

Since I tabled this debate, the Government have made a welcome announcement. They have changed their mind and decided to table an amendment on transparency in supply chains to the Modern Slavery Bill. Publishing the Bill without such a clause was a glaring omission, so this is a major step forward. As I said earlier, we need businesses to help in the fight against slavery.

Looking at the detail of the amendment published yesterday, I think that there are five areas that need further consideration. First, it is essential that minimum measures of disclosure are specified in the Bill. This is vital, because we need this clause to act as a catalyst for change, creating public pressure and competition between businesses so more are encouraged to act. Minimum measures that should be included are: the need to conduct risk assessments by product, industry and geography; the need to set out who has been involved in identifying the risks; the need to set out what actions have been taken to mitigate the risks; and the need to set out what has been the impact of those actions.

Without minimum measures in the Bill, comparisons between companies will be impossible for consumers to make. The level playing field desired by good businesses will be difficult to achieve, and the Government will not get the transparency or the world-leading legislation that they say they want. The statutory guidance would then underpin these minimum requirements. Can the Government say why they have chosen to take a minimalist approach to the detail in the amendment?

Secondly, many agree that the eradication of slavery in supply chains needs to be a corporate, and therefore a CEO, responsibility. The scrutiny committee also heard from Andrew Forrest, founder of the Walk Free Foundation and chairman of the Fortescue Metals Group. Throughout his company he has established a zero-tolerance attitude towards slavery in his supply chain of 3,000 suppliers. He said:

“The only reason that we found slavery in our supply chains was that it was mandated to be searched for by the chairman. … without that leadership from the top, it just would not have happened”.

Can the Government say why this critical level of accountability has not been included in the amendment?

Thirdly, the size of the business that will have to comply with the amendment is subject to a consultation. Can the Government say more about that? When will it start, how long will it last and who will it involve? Will it be completed in time to fully debate the threshold as the Bill passes through this House? Will national and local government be expected to take responsibility for auditing their own procurement practices and supply chains?

Fourthly, can the Government say how they expect this legislation to be monitored and enforced? Once the duty to disclose is agreed, businesses will expect scrutiny of their reports. Again, to level the playing field among businesses, should the Secretary of State or the new Anti-Slavery Commissioner not produce their own objective annual analysis?

Finally, on support for businesses, we all recognise that it will take a few years for businesses to successfully map, audit and evaluate every tier of their supply chain. Can the Government say how they intend to help businesses comply with this new clause? For example, the demand for quality training for those working in procurement and auditing will increase. Businesses should, and will want to, work together to collect and share information about the suppliers they use. As suggested by Anti-Slavery International, corporations and suppliers should form genuine partnerships so that slavery is not pushed deeper underground.

When considering how the Government can help businesses to fight slavery, you have to look at the Gangmasters Licensing Authority, the GLA. Many welcome the great job done by the GLA. In the sectors for which it is responsible, it has been effective at raising standards and driving out poor performance. Given the context in which the GLA was established 10 years ago, limiting the sectors made sense, but 10 years later the limit on the GLA’s remit makes little sense. High-risk sectors—construction, cleaning, care, clothing, catering and hospitality—all fall outside the remit of the GLA.

There is a huge level of support for a full GLA review to extend its role and remit, and also to look at the fines and civil sanctions available to it. Do the Government agree that the GLA needs such a review? Will the Government look at ways to help the GLA develop alternative sources of funding? With new supply chain legislation, there must be scope for the possibility of a partnership between business and the GLA in terms of additional training, advice, and briefing.

In closing, I thank all noble Lords who have put their name down to speak in this debate today, in particular my noble friend Lord Rosser for speaking on behalf of the Opposition and, of course, the noble Lord, Lord Bates, for responding on behalf of the Government. We need businesses to help us eradicate slavery. By working together, business by business, supplier by supplier, country by country, we can drive slavery out of our future.