Modern Slavery Bill

Baroness Young of Hornsey Excerpts

Monday 1st December 2014 Lords Chamber

Moved by

[Baroness Young of Hornsey]

30: After Clause 4, insert the following new Clause—
“Legal liability for the beneficiaries of slavery
(1) The Secretary of State shall within six months of the coming into force of this Act make regulations to ensure that a person benefiting from an offence under section 1 or 2 of this Act committed by a third party shall have committed an offence where—
(a) the third party acted for that person’s benefit, and(b) that person’s lack of supervision or control made possible the committing of the offence by the third party.(2) Regulations under subsection (1) shall be made by statutory instrument and shall not be made unless a draft has been laid before and approved by each House of Parliament.”

[Baroness Young of Hornsey (CB)]

My Lords, first, I would like to thank Klara Skrivankova from Anti-Slavery International for her work on this issue. The proposed new clause requires the Secretary of State to bring forward measures along the lines set out in EU directive 2011/36/EU on preventing trafficking in human beings, which I mentioned at Second Reading a couple of weeks ago. The amendment is designed to penalise those individuals and companies that benefit from the use of slave labour in their business dealings. The amendment will make clear in the Bill that those businesses that benefit from slavery are legally liable and deemed to have committed an offence if a third party has acted for their benefit and that the third party’s offence was made possible due to a lack of control or supervision on the part of the person.

I shall give an example of what is meant here. In November 2012, the management of Carestel—a former motorway and airport caterer—was condemned by a Belgian court as accessory to the crimes of human trafficking and organised fraud. There were two defendants in the case. One was Charalampos who, as anticipated, did not appear in court. He has been awarded the contract to clean the petrol stations and directly employed the women involved. The other defendant was Carestel, which at the time was a substantial operator of motorway and airport services where the women were working. The conditions under which these eastern European women were employed as lavatory cleaners at petrol stations were all too shockingly familiar. They worked up to 17 hours a day, in appalling conditions and were paid well below the minimum wage at €3 an hour, all of which added up to what the court described as constituting modern slavery. Charalampos was accused of recruiting women on deficient contracts that allowed his company to circumvent Belgian employment laws, but, importantly in the context of this amendment, according to the prosecution he could not have continued his operation without the active co-operation of Carestel. So not only the subcontractor but also the main company was condemned, in spite of the latter’s defence of ignorance and in spite of it claiming not to have had any idea that its cleaners were trafficked and abused.

Of course we have Part 6 of the Bill and the transparency provisions are a good starting point, but without other provisions that would ensure penalties for non-compliance or for continually reporting that a company has made no improvement in its monitoring, it is hard to see how progressive change can be achieved in some businesses. There are no incentives for companies to work to improve conditions in the supply chain and, perhaps more tellingly, no deterrents or any actions that would discourage persistent attempts to thwart the intentions of Part 6. There is an absence of an enforcement mechanism in the transparency clauses too. This provision would reinforce the potential impact of the transparency provision, as would the civil liability clause to which we will come later.

In his letter to noble Lords responding to the issues raised about the Bill at Second Reading, the Minister stated:

“We expect compliance with this measure—

the transparency measure—

“to be driven mainly by consumer, investor and campaigner pressure. If businesses do not provide disclosures which demonstrate real action, it will be evident to both customers and shareholders who will apply pressure to the company to comply or do more”.

That is a fair question to ask of investors, shareholders and campaigners, who are categories of activists, but I am not sure that it is fair or realistic to expect hard-pressed consumers to track down the statements of all the companies that provide them with their goods and services. It would be a particularly onerous task for those who are enduring financial hardship, where their priority is to buy whatever is cheapest. When company executives begin to worry about being held liable, a real shift in attitudes and behaviour will occur.

At Second Reading, many noble Lords referred to the need to strengthen Part 6, which relates to transparency in the supply chain. This amendment would also be a safeguard for businesses that are trying to operate ethically and would give assurance that those that undercut them by drawing unfair advantage through using forced labour can be held liable. It is a measure designed to improve the ways in which we can, to appropriate the words of the Joseph Rowntree Foundation,

“disrupt the business of forced labour”,

and constitutes an effective step towards regulating slavery and forced labour out of the EU. I beg to move.

[The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)]

My Lords, I welcome this amendment as an opportunity to look at the financial proceeds of this wicked crime. We will deal with this in subsequent groups and amendments, and I have no doubt that we will return to it at various stages on the way through. Amendment 30 allows us to debate how the Modern Slavery Bill will ensure that committing modern slavery offences does not benefit the offenders or third parties who either benefit or look the other way when these crimes are committed. It would place a duty on the Secretary of State to make regulations to ensure that legal persons benefiting from modern slavery offences or whose lack of supervision makes them possible will have committed an offence.

I greatly welcome the opportunity presented by the amendment to debate the role of legal persons, such as companies, in modern slavery. We will return to that subject in more detail—in particular, as the noble Baroness referred to, when we come to the section on supply chains. It is absolutely right that companies who profit from modern slavery can be held responsible, so it is right that the offences in the Bill can be committed by all persons, including legal persons. That means they can be committed by companies provided that the usual legal principles of corporate criminal liability apply. As the noble Baroness mentioned, companies can also be held liable under the civil law —such as negligence and proceeds of crime legislation—where they benefit from modern slavery committed for their benefit. Therefore, companies that make money as a result of modern slavery committed for their benefit can be deprived of those profits and pursued for damages by the victims. Article 5.2 of the EU trafficking directive does not require legal persons to be criminally liable; liability for the commission of offences by third parties that occur as a result of lack of supervision can be criminal, civil or administrative.

We are confident that currently—and under the Modern Slavery Bill—we are fully compliant with the requirements of the trafficking directive around the liability of legal persons. We want to make sure that we recover the ill gotten gains of slave-masters and traffickers. That is why Clause 7 subjects those convicted of slavery and trafficking to the most robust available asset recovery regime. That element of recovery of assets was also a provision of the Serious Crime Bill, part of the Proceeds of Crime Act, and all those provisions will of course apply in the case of modern slavery. It is absolutely vital that modern slavery should be viewed as no different from any other organised criminal activity in that where we can obtain the proceeds of that—so that criminals do not see the profits—and use it to help the victims of these evil crimes, that is what the Government want to do. We are satisfied at this stage that the law provides for that, as currently drafted in the Bill, but we have listened very carefully to what the noble Baroness has said and we will continue to review this in the light of that. Perhaps, therefore, the noble Baroness will feel able to withdraw her amendment.

[Baroness Young of Hornsey]

I thank the Minister for his reply and I am glad that he also said that this is still open to review. I agree with him that it complies to some extent with what we have to do and with all the other bits of legislation to which he has referred. However, it is a question that goes a bit wider than that and links it to the issue of transparency in the supply chain, which many people feel does not have any teeth—there are no sanctions and no real deterrence embedded in it. So to have something else in the Bill that would make a real statement about that would be very useful. None the less, I am happy to withdraw the amendment.

Amendment 30 withdrawn.