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Modern slavery: Act now or pay later

Michelle Essen

The government is showing that its focus on modern slavery is here to stay. Michelle Essen and Chris Hoile highlight why best practice will be increasingly crucial.

Have you noticed that every few months, there is a headline in the news about modern slavery and that quite often it is related to the construction industry?

It is no great surprise then that, on 30 July, the government announced it was planning an independent review of the Modern Slavery Act 2015 “to ensure our world-first legislation keeps in step with this crime”.

This announcement came at the same time the Home Office published a new research report – Economic and social costs of modern slavery – which estimated that modern slavery costs the UK up to £4.3bn each year.

Many, including the Chartered Institute of Building (CIOB), have welcomed the government’s plans for an independent review – particularly as the CIOB’s May 2018 report – Construction and the Modern Slavery Act: Tackling Exploitation in the UK – stated that “globally, an estimated 16m people were in forced labour within the private sector in 2016”.

It continued: “Construction ranks second only to domestic work for prevalence of this abuse, at 18 per cent and 24 per cent respectively […] Some construction companies are showing a degree of complacency and lack of understanding of modern slavery issues. Although a number of organisations are being proactive, other contractors are in denial that the sector has a problem.”

This lack of understanding is deeply concerning, as the act has been in force since October 2015 and the consequences for organisations that breach it are potentially severe, including significant reputational damage. And of course, there is also the impact on the victims themselves.

The act in a nutshell

At its inception, the act aimed to tackle modern slavery by consolidating various offences relating to human trafficking and slavery and combining those with new measures.

The act makes the following illegal:

  • Slavery (where ownership is exercised over a person)
  • Servitude (the obligation to provide services imposed by coercion)
  • Forced or compulsory labour (work or service exacted from a person under the menace of a penalty and for which the person has not offered themself voluntarily)
  • Human trafficking (arranging or facilitating the travel of another with a view to exploiting them, even where the victim consents to the travel)

In the construction industry this could apply to migrant workers who have been forced to work by someone they owe debts to, or those who have been ‘tricked’ into work by fake recruitment advertisements. It could also apply to vulnerable UK nationals coerced to work in construction. But, as modern slavery is a hidden crime that is constantly developing, it can be hard to recognise.

In addition to the act setting out the above offences, section 54 (one of the most prominent new measures) provides that all commercial organisations that supply goods or services, and have a minimum total global turnover of £36m, must also prepare a slavery and human trafficking statement each financial year, stating the steps they have taken to ensure their business and supply chains are slavery free.

This must be published on their website (organisations can simply state that no steps have been taken, but are unlikely to do so as it will undoubtedly raise questions). 

Practical tips for organisations

Modern slavery is increasingly difficult to discover. Criminals engaging in this activity are becoming more sophisticated in how they cover up their dealings, so it is important for organisations to be as vigilant as possible.

“Organisations are encouraged to perform due diligence on their suppliers to make sure staff are being recruited in the correct way”

There are a number of ways to spot exploitation, including noticing signs of unusually malnourishment, high fatigue and damaged PPE. Organisations should seek to ensure staff members at all levels are given proper training on what to look for and on the appropriate process to follow if modern slavery is suspected.

They should also tighten their due diligence procedures and ensure supply chains are analysed. Taking temporary labour as an example, organisations are encouraged to perform due diligence on their suppliers to make sure staff are being recruited in the correct way.

As part of this analysis, it is important to understand where your firm’s money is going. Is it going directly to the staff or is there an intermediary? If there is an intermediary, what assurances are there that staff will receive what is rightfully theirs?

Modern slavery going forward

With the government’s independent review under way, the spotlight is again on modern slavery as a whole.

In an interview within the CIOB report, Justine Currell, former modern slavery senior policy adviser to the Home Office who led the drafting of the act, stated that s54 aimed to see “organisations growing and performing better over time, year on year” and that organisations “need to see this as a kind of long game – to have at least a three-to-five-year strategy”. 

It is clear from this statement and the launch of the independent review that the government remains focused on tackling modern slavery – and if the construction industry does not engage with the act, the outcome may well be more regulation in this area.

Organisations should do what they can to ensure their processes improve annually and that, in addition to publishing their slavery and human trafficking statement, they are truly following through on their modern slavery action plans and policies, training their staff appropriately, and watching out for the telltale signs.

Failure to do so may result in severe consequences for both organisations and the victims, and may even lead to investigatory attention.

Michelle Essen and Chris Hoile and lawyers at Womble Bond Dickinson

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