The following blog was written by Dame Sara Thornton, Independent Anti-Slavery Commissioner, and Matthew Taylor, former Director of Labour Market Enforcement
We both welcome the political and media spotlight on the Government’s new measures to combat human rights abuses in Xinjiang. The global pandemic has revealed many weaknesses in the operation of many businesses and their supply chains. In particular, media reporting over the summer highlighted the appalling working conditions in the textile industry in the UK which may have contributed to high levels of infection in Leicester. A subsequent report by Alison Levitt QC commissioned by Boohoo found unacceptable working conditions, underpayment of workers, serious health and safety violations and widespread neglect of employees’ rights in the company’s supply chain. She strongly urged the company to change its approach and the appointment of Sir Brian Leveson to provide independent oversight of their Agenda for Change is an encouraging sign that the company might be taking this seriously.
In the light of the summer’s revelations there were inevitably calls for more enforcement and for more regulation of business. The Government has announced plans to toughen the requirements on companies to report modern slavery risks in their supply chains. It is also developing very welcome proposals for a single enforcement body combining the work of several existing agencies. But there is a limit to the effectiveness of yet more requirements to report. Labour market enforcement alone will never deliver the sea change that is required.
The approach of investors to climate change has illustrated the leverage that they can have on how businesses operate. There is so much more that can be done to ensure that investments are not being made in companies which profit by harming people. Companies that fail to comply with labour regulations or turn a blind eye to exploitation have lower labour costs, unfair competitive advantage and may therefore be able to access capital unfairly. Investors have unparalleled influence over global business and they should use it to stop the abuse of workers.
However it is business leaders who will really make a difference and they need to act if they don’t want to be implicated. They need to learn from the most egregious cases. In 2019 the largest UK prosecution for modern slavery revealed 400 Polish victims who had been working in the direct supply chains of most of the UK’s biggest supermarkets and retailers. As a consequence, the Independent Anti-Slavery Commissioner challenged their CEOs of those companies to show how they had responded to this case and how they planned to prevent organised crime groups from infiltrating their supply chains in the future. The response has been largely constructive and new approaches to sharing intelligence in the sector have developed.
We have both argued that companies should behave responsibly towards abuses found within their supply chains. Rather than terminating contracts at the first sign of trouble – which largely harms vulnerable workers – they should work with suppliers to raise standards and protect workers. Good companies are doing this. But is it time to toughen up the approach to those companies that are happy to tolerate abuse?
A few years ago, the previous Director of Labour Market Enforcement, Sir David Metcalf, proposed joint responsibility as a positive form of collaboration between law enforcement and business. He suggested that brands could be named and shamed if they failed to remediate and reform when abuses were identified in their supply chains. Such an approach would put power in the hands of consumers, investors and the public. Evidence from around the world shows that naming and shaming can have a real impact on business practices; indeed the Government uses it to expose minimum wage non-compliance. This approach would also ensure that the powerful and often shocking information generated by lengthy law enforcement operations can be used to educate the public and corporate stakeholders and to improve the overall system. The upcoming Employment Bill provides a timely opportunity for Parliament to consider how to incentivise business to do the right thing to prevent abuse of workers in this country and across the world.