UK Company Supply Chains

Jim Sheridan Excerpts

Tuesday 16th December 2014 Westminster Hall

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

I congratulate my hon. Friend the Member for Wansbeck (Ian Lavery) on securing this debate. He has eloquently spoken about what we saw in North Carolina, which was depressing. I put on record my thanks to president Velasquez of the Farm Labor Organizing Committee and his team of volunteers who work tirelessly every day to try to identify and expose what is happening in that part of America. I also put on record my thanks to the local communities, the Churches and the faith groups that we met in North Carolina. They told us clearly that they do not want British American Tobacco, Reynolds or any of these companies operating in their communities and treating people in the way that they do.

My hon. Friend mentioned the meeting that I and others had with BAT. We were offered all the empathy in the world, but nothing of substance to help people. We have multinational companies that are quite prepared to spend hundreds of thousands, if not millions of dollars in courts trying to defend themselves against having to give workers a say at the workplace so that they can lead a decent life, with respect. Those companies would rather pay fancy lawyers hundreds of thousands, if not millions of dollars to continue to treat their workers in the way that they do. From what we have seen, the situation is depressing.

Another company that is coming on to the radar for behaving in that way is the bus company National Express. It is well respected and well established in the UK, but when it goes abroad to America, the first thing it tries to do is indulge in union busting, which is a complete waste of people’s time. The most important thing from a British perspective is that the company has the contract to take kids in America to and from school. A number of safety concerns have been raised, and the last thing we want is a UK company being responsible for fatalities in America. Anyone who complains or highlights those safety issues suddenly finds themselves unemployed. National Express is a well-respected, well-established company, but when it goes abroad I am reminded of the television programme, “An Idiot Abroad”. That is exactly what it is. It behaves like an idiot and does nothing until such time as legislation forces it to, which is not a progressive way forward.

I will focus on the Blood Bricks campaign—it is a difficult name to say and I have been caught out a few times by mispronouncing it—and early-day motion 362. Union Solidarity International, working in partnership with Prayas, ActionAid and Thompsons solicitors, has developed an international campaign to highlight forced labour and child labour in the global brick construction sector. The Blood Bricks campaign focuses on India, where trade union organisations, non-governmental organisations and human rights campaigners have been organising, educating and mobilising thousands of workers to raise wages and access to public services and to combat child labour and sexual exploitation.

The issues of forced labour are not restricted to India. Recent case examples in Brazil and Qatar highlighted problems with the work on the infrastructure for the football World cups of 2014 and 2022. However, bonded labour, forced labour, child labour and infringements of domestic and international legislation are widespread in India. According to the International Labour Organisation, almost 21 million people across the world are victims of forced labour: 11.4 million women and girls and 9.5 million men and boys. Those who exact forced labour generate vast illegal profits. Domestic work, agriculture, construction, manufacturing and entertainment are among the sectors of most concern. Migrant workers and indigenous people are particularly vulnerable to forced labour.

The early-day motion, which stands in my name and has a significant number of signatures, focuses on the workers who were faced with choosing which limb they wanted cut off when they tried to escape from bonded labour, as featured in a BBC story by Humphrey Hawksley only a few weeks ago. The USi has identified a company operating in the UK with ties to bonded labour. Those workers were said to have been working for Jai and Raj Group, a subcontractor of Indian engineering and construction giant Larsen and Toubro Ltd. In 2010, Renfrew firm Howden Group entered into a multimillion pound joint venture with L&T to manufacture equipment for power plants. The USi has written to Howden Group, alerting it to the allegations that have been passed to the Indian Government’s Ministry of Labour and Employment, but its response is completely inadequate. The Howden Group, despite being controlled by L&T on this site—a fact it acknowledges—says we should raise our complaints directly with Larsen and Toubro.

The workers, who are from the state of Uttar Pradesh, were said to have been lured to work on a construction site in Delhi by an advance of 1,000 rupees, which is approximately £10.26, and promised wages of 12,000 rupees, which is £123.08 a month. We believe that the allegations, which potentially implicate L&T—it has major operations in the UK—are a serious breach of domestic and international law. If companies want to operate in the UK, that must come at the price of proactively ensuring that their supply chains are free from slavery. UK companies operating around the world have a legal duty to uphold the law.

In a statement, Howden confirmed that it was in a joint venture with Larsen and Toubro in the power industry in India, but added:

“However, we are not aware of any issues around bonded or forced labour (or allegations thereof) in connection with L&T or a subcontractor of L&T in India.”

A spokesman for L&T denied the allegations of bonded labour and said the company had the highest standards of labour welfare at all establishments and job sites, and was compliant with Indian labour laws and Acts. He added:

“Among other rules and regulations, there are specific checks in place that prohibit the use of bonded labour. We understand from our project site that we hire various equipment from the agency (Jai and Raj), and confirm that no bonded labour is deployed at our project site, directly or indirectly.”

However, USi has evidence directly to the contrary, which it believes to be the tip of the iceberg of companies operating in the UK with ties to modern-day slavery and of UK companies operating in countries such as India that are implicated in those practices. That is why we need a robust response.

Analysis of the records of workers across three states shows that average wages over the working period of six months range between $2 and $3 a day. Those rates are significantly lower than the statutory minimum wage. Even to earn that level of wage, workers have to put in 12 or more hours of work every day. Even children are forced to work, as the food expenses given to workers are correlated with production levels. Lower production can simply mean that a family does not have enough to eat.

A significant change in law is needed. We need obligations with teeth. As the UN recognised in its guiding principles, it is not enough to encourage companies. If companies do not ensure respect, protection and human rights compliance, there must be proceedings that can be brought against them and remedies available through the courts.

Accordingly, the following obligations are a minimum for any company wanting to be registered to do business in the United Kingdom. First, they must do more than simply produce a report; there must be a positive obligation upon the company to proactively audit and carry out due diligence to ensure no human rights breaches within its operation in the United Kingdom or anywhere else it does business. Secondly, the same positive obligation must apply to subsidiary companies, joint ventures and supply chains, when the supply represents a minimum financial limit or a minimum percentage of a company’s turnover. Thirdly, any company that is linked to human rights breaches by its own operation, joint ventures, subsidiaries or supply chains will not be entitled to any Government subsidy or export credits. Fourthly, when a company knew or ought to have known about negligence or was recklessly indifferent to human rights breaches, it shall be liable to pay compensation for the extent of the human rights breaches against individuals in claims brought in the United Kingdom, irrespective of where the human rights breaches took place. Finally, deliberate, grossly negligent or reckless indifference to human rights breaches in such circumstances shall also be a basis upon which criminal proceedings may be brought against the company or individual directors.

I have referred to just one example, which is the tip of the iceberg of the total exploitation of vulnerable workers around the world. The British taxpayer is clearly saying that such exploitation should not be done in their name. They want no part of it. I ask the current Government, or whatever new Government we have after May, to take forward legislation to ensure that people are not exploited and that Britain and companies registered here play by the rules.