Modern Slavery (Transparency in Supply Chains) Bill [HL]

Baroness Young of Hornsey Excerpts

Friday 8th July 2016 Lords Chamber

Moved by

[Baroness Young of Hornsey]

That the Bill be now read a second time.

[Baroness Young of Hornsey (CB)]

My Lords, I have drawn number 2 in the ballot for Private Members’ Bills on my very first attempt, so I feel that I have been quite lucky. I am lucky, too, to have had such valuable input and support from my noble friend Lord Alton, my noble and learned friend Lady Butler-Sloss, the noble Baroness, Lady Hamwee, Anti-Slavery International, the Ethical Trading Initiative, the BMA, the British Retail Consortium and its colleagues from the sector, and Safia Minney, director of People Tree and fair trade activist. This Bill exists because of all of them and countless others who have helped me get to this stage. I also want to place on record my thanks to Nicole Mason and her colleagues in the Legislation Office for their invaluable skill of turning wishes into draft legislation.

It is worth while establishing some of the background to the Bill. In 2007, we commemorated the bicentenary of the abolition of the slave trade on British ships. At that time, I have to confess that I, like many others, was only vaguely aware that in the 21st century human beings were being traded, exploited, trafficked, brutalised and abused on an industrial scale across the world.

Later, in 2009, during the passage of the Coroners and Justice Bill, I worked with Anti-Slavery International, Liberty and fellow Peers to introduce an amendment that criminalised forced labour and domestic servitude. Most people had assumed that such acts were already crimes, but they were not. The then Labour Government were initially reluctant to accept the amendment, as they thought it unnecessary and the ground covered by other legal instruments, but thanks largely to the persuasiveness of NGOs, civil society and victims, they took on the general thrust of the amendments and inserted them into that Bill. It is important to note because it is one of the steps that set us on the path that we are on now.

In 2015, the landmark Modern Slavery Act became law in recognition of the fact that such crimes were widespread and that a concerted, robust effort was needed to identify, and serve long sentences on, the perpetrators. The Government are to be congratulated on the way in which they gained cross-party consensus on the Bill, enabling it to be passed swiftly into law.

During the passage of the Modern Slavery Bill, several noble Lords spoke on the section on transparency in supply chains—which I shall shorten to TISC. In advocating TISC here in the UK, frequent references to the California Act were made both in the other place and in this House. The Californian legislation set an important and significant benchmark for identifying who owns responsibility for the use of enslaved and trafficked people in the supply chains of a wide range of brands and companies across different sectors, whether that be food, fashion, textiles, homewares, furniture, construction and so on. In spite of initial doubts and to their credit, Ministers ultimately accepted the arguments for including a section on TISC in the Modern Slavery Bill, persuaded by the views expressed by substantial, reputable businesses which wanted a “level playing field” created through TISC and by concerned NGOs and civil society.

Part of the point of my retelling this history is that Governments can change their mind. I know that the Minister, who kindly agreed to meet me yesterday, has substantial reservations about the Bill that we are debating today, but I hope that we are set on a similar trajectory as described above; that is, from a position of doubt to one of engagement and collaboration leading to some significant improvements on TISC.

As I have already suggested, last year there was a real sense of a collective desire to get the Modern Slavery Act through Parliament on a tight schedule. That was because everybody wanted to make sure that the legislation was put to work as soon as possible and to make a declaration of intent that the UK would vigorously pursue the criminals involved in such appalling activities. I hope that we can still count on that collective will today as we consider this Bill. Whatever its limitations, I hope that noble Lords will not be surprised to hear that I am happy to work with your Lordships to improve it or even to discard parts of it should there be convincing alternatives. After all, we all have the same goal: to do what we can to eradicate these crimes.

For the likes of Marks & Spencer, John Lewis, Next, Debenhams and so on, the case is clear. TISC reporting is seen not as a regulatory burden but as an opportunity to embed humane, fair practices in their organisational culture and across the sector. It makes good business sense because some businesses are gaining an unfair financial advantage through the use of forced labour and failure to address enslavement and trafficking in supply chain operations.

Now to the Bill. The amendments that I propose to be made to Section 54 of the Modern Slavery Act are relatively simple and are welcomed by the Transparency in Supply Chains Coalition, comprising CORE, Amnesty International UK, Anti-Slavery International, the Dalit Freedom Network UK, FLEX, the International Justice Mission, UNICEF UK and Walk Free. The Bill has also been positively received by the British Retail Consortium and Kevin Hyland, the Independent Anti-slavery Commissioner.

Clause 2 inserts public bodies into the Modern Slavery Act. Many contract and agency workers end up working on government contracts and this type of labour is particularly vulnerable to exploitation. Anecdotal evidence from NGOs and trade unions points to worker exploitation on government construction contracts in the south-west of England, in recycling plants in the north-west and in London. Social care contracts are another area of concern. There have been cases of exploitation of workers in the care industry and allegations of widespread worker abuse by some key local contractors have been reported.

Clearly, what I propose is not totally straightforward. For example, it is apparently difficult to determine which local authorities would be subject to compliance with TISC measures, particularly with regard to calculating thresholds, and I know that there is an argument that says that public bodies are already well regulated in terms of ethical procurement practices. But I draw noble Lords’ attention to President Obama’s executive order 13627 of 2012, Strengthening Protections Against Trafficking In Persons in Federal Contracts, which sets a high standard for all federal agencies. The order prohibits contractors and their subcontractors from engaging in a broad array of trafficking-related activities, such as providing misleading information about work conditions, requiring employees to pay recruitment fees, and so on. To ensure compliance, contractors and their subcontractors must agree by contract to co-operate fully with contracting agency audits and investigations and, for contracts above $500,000, contractors and subcontractors are required to maintain a compliance plan. Any violation of the provisions in this executive order can result in termination of the contract and potentially exclusion from future federal contracts. This level of contract compliance with regard to TISC is far more extensive than what is contained in this Private Member’s Bill, and I wonder about the extent to which federal bodies can be said to be set up in a more complicated way than our public bodies here in the UK.

The insertion of public bodies into the Modern Slavery Act points to the potential of their combined purchasing power, of £45 billion, to contribute to a real change in behaviour from those operators in the commercial sector that are not on the high street and thus not instantly recognisable. At the heart of this clause is the question of how public bodies can use their purchasing power more effectively to root out enslavement and trafficking in their supply chains.

Clause 3 simply defines “public body” for the purposes of this Bill and the Modern Slavery Act. Clause 4 requires companies and public bodies to publish their statements in their company reports, lodging them with appropriate bodies such as Companies House or the Charity Commission. This means that all statements would be available in a central location and could be scrutinised alongside company accounts. Non-financial reporting is standard in annual reports, which have to be signed off by directors, and this addition should not represent a burden for those companies involved since they have to make the statements anyway.

As it stands, the Modern Slavery Act requires companies to put their statements on their websites. I am not arguing against that, obviously, but trying to enable scrutiny and monitoring of statements in as many publicly accessible places as possible. The publication of statements should ideally be linked to a list of companies that should be complying with TISC. That is precisely what is asked for in Clause 1(5), which requires the Secretary of State to compile a list of companies that should be compliant with TISC, to make it possible for NGOs, civil society and the general public to find the information required for effective monitoring. As I have just stated, the effectiveness of this measure would be enhanced by linking reports and statements directly to this list.

In the absence of any punitive measures for non-compliance, the Government expect that good, reputable businesses will encourage others to improve their efforts to rid their supply chains of enslaved and trafficked labour. The Government would also like NGOs, civil society and the general public to monitor and scrutinise TISC compliance, since there are no other mechanisms for doing so. Noble Lords will be aware that there is no mandatory requirement for companies to upload their statements to a government or indeed any other website. This means that that no one has any idea which companies have complied with TISC, or even how many companies should be complying. Of course, we know that most of the familiar high street companies will meet the £36 million threshold and comply, but what of other, less familiar businesses such as caterers, the construction industry, hotels and so forth? Will the Minister explain to the House how he sees the monitoring of TISC happening, given the lack of information available? I am sure, as he said to me yesterday, that requiring the Secretary of State to carry out this clause would be a difficult task, but have all the technological possibilities been explored and discarded? Is it really impossible to create a dynamic database of companies that can be consulted by the public, civil society and NGOs?

Apparently, one of the regrets of the creators of the California Act is that they did not build into the legislation provision for a central repository of TISC statements. This subject has been raised several times with the Government here with little by way of a positive response. What seems to be happening now is that several websites offering to host TISC statements have emerged claiming to be independent, with some charging fees of up to £5,000 and at the same time selling consultancy services to the companies concerned and offering to write the reports for a fee. That represents a clear conflict of interest. Given that of the 75 reports recently posted and analysed, only 22 met the minimum legal requirements of the Modern Slavery Act, and just nine met the minimum legal requirement and addressed all six of the criteria suggested in the Act, although obviously it is early days, this does suggest that there need to be examples of good practice in drawing up reports and statements. Monitoring is also needed to ensure that statement templates do not become more widespread. Apparently, several statements from different companies sound suspiciously similar. Clause 2, which inserts paragraph (1A), and Clause 3 both relate to due diligence and contracting authorities, and aim to strengthen existing guidelines and regulation for public bodies, as I have already noted.

One reason I have brought this Bill to your Lordships’ House is that I do not want us to settle into a complacent attitude which says, “We’re leading the world on this; let’s just see how things pan out over the next couple of years”, during which time, bad habits such as low levels of compliance and poor reporting become the norm. That would be unforgivable and a betrayal of victims. I beg to move.

--- Later in debate ---

[Baroness Young of Hornsey]

My Lords, when I first looked at the list of speakers on the Bill, I was gratified, and I am now even more so. I know that it is customary to say what a wonderful debate it has been, but this morning’s debate has been exemplary. I am grateful to all noble Lords who have spoken, particularly as all noble Lords have given such wholehearted support to the Bill—or, rather, most noble Lords have.

However, I think all noble Lords will agree, including the noble and learned Lord, Lord Keen, that we want to do something more; we just cannot quite agree yet on exactly how we will do it. However, as I have said—and as the Minister has said—I am open to discussion about the contents of the Bill, the way it has been drafted, and whatever legislation and mechanisms might serve the same purpose. I also refer back to some of the earlier remarks I made when I said that, each time we have had some sort of impetus to develop this work further, respective Governments have initially said, “Oh no, we don’t need that because we’ve already got sufficient legislation and legal instruments to cover it”, and then eventually they give in because they can see that these gaps are there.

I absolutely appreciate that it is of course early days, as all noble Lords have said; noble Lords will forgive me if I do not go through the important points that they have made. However, as I also said earlier, I do not want us to sink into a kind of air of complacency about this. We need to keep up the momentum that was established via the Act and make sure that we continue to raise awareness.

There are many unanswered questions, and I am afraid that the Minister has not addressed in a satisfactory way many of the questions that were asked here. However, I hope that through discussion, compromise and collaboration, including those voices from the private and public sectors, NGOs and civil society, we will be able to get to a place with which we are all happy. I conclude my speech in reply by asking the House to give the Bill a Second Reading.

Bill read a second time and committed to a Committee of the Whole House.