UK Company Supply Chains

Ian Murray Excerpts

Tuesday 16th December 2014 Westminster Hall

[Ian Murray (Edinburgh South) (Lab)]

It is a pleasure to serve under your chairmanship in this important debate, Mr Crausby.

I pay tribute to my hon. Friend the Member for Wansbeck (Ian Lavery) not only for bringing this issue here for debate, but for visiting Colombia and the North Carolina tobacco fields and for his report, which I would encourage all Members of the House to read to see what he experienced. We should all reflect on the personal, real-life stories he has told us this morning and do everything we can to resolve some of the issues.

I also pay special tribute to my hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan) for all his work on these issues not only in the UK, where he has stood up for the rights of individual workers, but across the world. It is no exaggeration to say that, without his dedication, the Gangmasters Licensing Authority may never have come into being. The authority has transformed the lives of many in the UK, and I hope it will be a blueprint for transforming many other lives across the world.

The issue is huge: global exploitation in UK companies’ supply chains cannot be tolerated and we should say that clearly. We cannot be serious about tolerating slavery in the United Kingdom if we are prepared to accept the use of slave labour for products or in construction in other parts of the world. We have heard many examples this morning of such forced labour, including blood bricks. The 1,200 people killed in the collapse of the Rana Plaza were supplying clothing to some of our main high street stores, many of which will do quite brisk trade over the festive season as the public do their Christmas shopping with them. We heard, particularly from my hon. Friend the Member for Ogmore (Huw Irranca-Davies), about prawn fishermen held in a lifetime of slavery. We have heard, and I have certainly read, about the human rights issues affecting them, and about bodies torn apart by vessels for fun. The prawns were being sold to many high street stores—Tesco, and even the Co-op. It is not good enough for those companies to say “We didn’t realise it was happening.” Our conclusion today—the whole point of the debate—should be for the Government to say it is unacceptable and that ignorance is no defence, and that we should do something about it. We should put the onus on companies to investigate their supply chains.

We have heard many times about small children being paid pennies a day for sewing sequins on to children’s clothes, and we heard reports from the tobacco fields of North Carolina. I was much struck by the wonderful speech of my hon. Friend the Member for Derby North (Chris Williamson) about serious exploitation in Qatar, in the building of World cup venues. It is the primary sporting event in the world, and those workers are being exploited. How can we possibly tolerate the possibility that in a few years’ time Scottish football fans may celebrate, in the patriotic way of passionate fans, goals scored by a Scottish football team at those venues—when the death toll for building those very terraces could be as high as 4,000? That must be unacceptable, because there is a blueprint for how to carry out such projects properly. The UK Olympics in London was a major construction project—one of the biggest in the world at the time. There was not one death. It can be done, and we should secure legislation to prevent such deaths.

There are various studies showing that the public are highly aware of the issue; 84% of the UK public want legislation and so do the overwhelming majority of companies. The Government have come some way on the question of supply chains, as we shall probably hear from the Minister, with regard to the Modern Slavery Bill; but the Opposition think that they should go an awful lot further. Some of the stories that we have heard today reinforce that.

Most large retailers are implementing policies to tackle the issue, but it is hard to see tangible progress that would enable consumers to make direct comparisons between companies, as my hon. Friend the Member for Ogmore mentioned. We must be able to compare apples with apples rather than pears. That is why we must introduce mandatory standards for reporting, to force companies to adopt standard procedures. We must be able to assess supply chains, because we want to support British businesses that act on the issue, and create a level playing field. It is a pro-business agenda, and the hon. Member for Foyle (Mark Durkan) was right to suggest that. Businesses want to stamp out the practices in question. However, we will not get to the stage where the advantage to business is clear unless there is a level playing field to allow comparisons to be made and businesses that do not take action to be exposed. Many large companies have backed legislation to create a level playing field, and so have the British Retail Consortium and the Ethical Trading Initiative, which was set up with 81 corporate members. Retailers are also acting. Sainsbury’s, Next and even Primark have complained about competitors who have not acted.

A community of NGOs and businesses has coalesced around the Ethical Trading Initiative to recognise that three fundamental things are needed. First, it concluded that there must be more regulation of national and international supply chains to establish the level playing field. Secondly, there should be a partnership with unions and non-governmental organisations; that would be essential to tackling forced labour issues in international supply chains. Thirdly, Governments would need to shoulder their portion of the burden in tackling those issues. I believe that when Governments regulate in such matters, although it is necessary, it is because there has been a significant business failure. I think that businesses have recognised that and that they must do something about it.

UK companies undoubtedly have hugely complex supply chains, as we have heard in the debate. That is particularly true of the fishing matters set out by my hon. Friend the Member for Ogmore. Even best practice in auditing is not foolproof. That is why the approach must be about changing market conditions and creating incentives for the suppliers to be shown to be fair. That would mean suppliers being able to show that they meet International Labour Organisation standards, backed up by kite marking and a proper inspection regime.

I acknowledge, as I think that everyone would, that it is hard for UK companies to implement that approach individually. They say that to us consistently; but collective action could make it the norm. The Bribery Act 2010 has reduced the burden on business by creating consistent standards and an industry to audit them. It is regulation, and the Government will talk about their one in, two out approach to regulation; but the Act has brought in consistent standards, reducing the burden on business and creating a level playing field.

As to the Modern Slavery Bill, the Government have to some extent had to be dragged along kicking and screaming. It took them until Report to introduce relevant provisions, and there was massive criticism of their proposals, questioning whether they are appropriate. My hon. Friend the Member for Wansbeck concluded that the lack of proper, enforceable regulation led to the removal of all humane conditions from the supply chain—something he witnessed on his many visits.

We proposed amendments to the Modern Slavery Bill in Committee. They would have built on proposals from the Joint Committee that dealt with the draft Bill, and would have allowed for legal reporting on the supply chain within the Companies Act 2006, and regulations including four standard reporting elements, with definitive actions for companies. It is not good enough for companies just to report on those issues. They must also show that they have taken action.

The first of the four elements was accountability for tackling modern slavery and forced labour, including policy commitments, resourcing and actions to exercise due diligence. The second was that modern slavery and forced labour risks should be investigated, monitored and audited in the UK and throughout global supply chains. The third was that victims of forced labour and modern slavery should have support, and access to remedy. It is not good enough just to deal with today’s problem. Things that have happened in the past must also be dealt with. The fourth thing on the list was, crucially, that staff and suppliers should be trained and have access to expertise and advice in dealing with the issues. Those are the critical things that we need to think about to get robust and legally enforceable reporting mechanisms.

We welcome the measures that the Government have introduced, as far as they go, but they need to go further. In the other place, Lord Rosser, who tabled some amendments, concluded:

“I can only comment that it is very difficult for civil society to make a judgment if there is not enough information in the statements in the first place.”

He added that there is no legal requirement to produce the relevant statements and that the Bill

“still does not go far enough and will not enable those judgments to be made by society, whether it be consumers, voluntary organisations, the media or others.”—[Official Report, House of Lords, 10 December 2014; Vol. 757, c. 1892.]

We can see that proper regulations work. The Gangmasters Licensing Authority works. The groceries code adjudicator is limited but seems to be working. Where there is good regulation, such as the Bribery Act 2010, it can work.

I will be interested to hear whether the Minister will respond to the debate by saying that the Government will present proper, strong, robust regulations. It is clear from what we have heard this morning that morally unjustifiable things are happening in our supply chains. As consumers in the marketplace going shopping we should know clearly where products come from and how the companies look after their employees. If we do not act we will have missed an opportunity. Not only that, but the United Kingdom will be ducking its responsibilities on the international stage to do something about what is happening.