With a new white paper examining ethical sourcing standards in construction, how effective has the Modern Slavery Act been in improving standards in construction?
Imagine the scene: the police receive a call to say there is a fire on a commercial building site.
This immediately seems unusual – only the steel frame has been put up, so there is nothing combustible on site for a fire to start and spread.
When the police arrive, they discover something unexpected. A number of people are huddled around a bonfire; they had lit it to try to keep warm.
As officers investigate, they realise these people are in fact the team that is building the scheme. But they aren’t just working on site – they’re living on it too.
But, you don’t even have to imagine this: it’s a true story.
These workers had come from overseas and had been living on this site from when it was just a hole in the ground. Cases like these are not unusual, according to Gangmasters & Labour Abuse Authority (GLAA) chief executive Paul Broadbent.
He says construction is a high-risk sector when it comes to modern slavery. What needs to be done to tackle this worrying problem?
What does modern slavery look like?
Although abolished in the UK in 1833, slavery continues nearly 200 years later. But in what form does it now take place?
Often, people from overseas will be promised a better life and work in the UK by traffickers. On arrival, their passports may be taken away from them, they may be forced to live in squalid conditions, and they may be paid below minimum wage – if anything at all.
According to Mr Broadbent, construction is particularly vulnerable to this practice. Our workforce is often transient and temporary, thus providing ideal conditions for criminals to operate in and lowering the risk of detection.
“There needs to be a deep recognition and understanding by business that labour exploitation can and does happen in most UK supply chains”
Paul Broadbent, GLAA
Since 2015, legislation has been put in place in an attempt to tackle the problem across all sectors of the economy. The Modern Slavery Act 2015 – also known as Section 54, Transparency in the Supply Chain – requires companies with turnovers of £36m or more to publish statements detailing what they are doing to eradicate the problem.
CN took a detailed look at the act and why it had been introduced in early 2016. But uptake of its measures across the construction industry since then has been unconvincing, according to Mr Broadbent.
“I’ve seen a number of modern slavery statements, some of which are really in-depth and encouraging, and some which are less so,” he says. “There needs to be a deep recognition and understanding by business that labour exploitation can and does happen in most UK supply chains. In construction, I think there is a fair recognition.”
With this in mind, how successful has the act has really been?
Problems with the act
Jacqui Glass, architecture and sustainable construction chair at Loughborough University, says the 2015 legislation has been positive in terms of raising the profile of the issue at board level.
The act was a “gate-opening piece of legislation”, she says, and has helped legitimise the conversation around transparency in supply chains.
However, she says the act fails to target certain companies that fall below the turnover threshold. Some of these SMEs will be exposed by default to the legislation as they will work as subcontractors for larger main contractors – but Prof Glass worries about those companies operating outside these supply chains.
“We are therefore reliant on whistle-blowers and members of the public to inform the GLAA and police about trafficking violations or people under threat,” she says.
Advice for contractors
Gowling WLG associate Andreas Steffensen says contractors can play a vital role in combating the issue.
Because they control building sites, principal contractors in particular are in an ideal position to lead on best practice for themselves and their supply chain. He offers recommendations for firms wanting to go above and beyond in making sure they are ticking the right boxes.
“We recommend contractors provide training to all staff when they come in, which focuses on spotting the early warning signs of modern slavery,” he says.
In addition, use of posters on site flagging warning signs of labour exploitation can keep the issue at the forefront of workers’ minds when on site.
Risk assessments focusing on people and recruitment can also be helpful. “It is useful if you assign responsibility for this, particularly if you can get a board sponsor for the topic,” Mr Steffensen says. “This raises awareness of the topic within the organisation.”
For Mace responsible business director Isabel McAllister, the main issue lies in the ambiguity of the act. “Good practice hasn’t been defined and [neither has] how long this journey [to tackle modern slavery] should take,” she says. “This is probably where the act has had less impact than hoped.”
But a new white paper published through BRE – Action Programme on Sustainable and Ethical Reporting (APRES) – was released in September, and could help plug this information gap. The paper sets out eight “pathways” as an action plan on how contractors can combat slavery and unethical supply chains (see box).
“We know different businesses are on different points of the journey”
Jacqui Glass, Loughborough University
Prof Glass led the APRES report and says there has been a clear message from industry that guidelines are needed, with her report offering advice on how to move beyond just meeting requirements. “We know different businesses are on different points of the journey,” she says. “The report is quite straightforward and it is not proscriptive. But it signals to companies where they need to be if they want to improve on this.”
What can we do next?
Although slavery has been put under the spotlight due to the Modern Slavery Act 2015, the legislation arguably falls short in tackling the issue on a practical level.
Mr Broadbent suggests that requiring companies to apply for a gangmaster’s licence in order to source labour and supplies could be one way forward. He explains how this licensing has benefited the food and agricultural sectors. “In food and farming, there are 1,000 gangmasters who supply 500,000 temp workers into food and farming. To do this, they need a gangmaster’s licence.”
When companies apply for this, they must meet certain criteria to qualify for their licence, such as whether they treat their workers properly and pay them on time. If firms operate without this licence in place, they could face up to 10 years in prison. “It’s not an empty threat – it’s a severe punishment,” Mr Broadbent says, adding that it has helped raise standards in other sectors.
This licensing has, however, also produced unintended consequences for our sector. Because regulation has stepped up in the food and agricultural industries, labour exploitation has dispersed into other supply chains, such as construction.
Mr Broadbent says our sector is calling out for regulation to be put in place. “The main benefits of this licensing are that it protects good and ethical practice, and identifies and tackles unscrupulous practice,” he says. “Parts of construction have said if this licensing scheme was adopted in the industry, it would raise standards immediately.”
“Some clients have very proactive systems in place. They may have additional expectations, such as paperwork and qualifications for workers to be declared beforehand”
Isabel McAllister, Mace
Clients can also play an influential role in improving standards across the sector, according to Ms McAllister. Mace is seeing a greater push from certain clients to crack down on the issue, she says, adding that it would be helpful for contractors if customers could set a common standard. “Some clients have very proactive systems in place,” she says. “They may have additional expectations, such as paperwork and qualifications for workers to be declared beforehand for workers on site.”
However, she says some are not as collaborative and will push contractors to deliver the changes required to combat the issue on their own.
As well as client engagement, Ms McAllister suggests contractors could benefit if there was more transparency around sharing data. “What would be helpful is if the names of subcontractors or agencies known to be behaving inappropriately are readily shared,” she says. “But because of data protection and blacklisting, it is very difficult to put a mark against a supplier’s name.”
However, Mr Broadbent agrees that the industry, along with the GLAA, can work together more effectively to deal with suspicious cases.
“If anyone in the construction industry or supply chain sees something that doesn’t look right – for example, a worker could look frightened to engage in conversation, looks literally battered or bruised, dishevelled, underweight – you can contact the GLAA and we will work through that issue in association with that business.”
What is clear is that this pervasive problem cannot be tackled by individual companies doing their own thing; only through a massive collaborative effort will progress be made.
The eight pathways to best practice
1) Organisation strategy and policies
The approach to tackling modern-day slavery is built into the values of the business and implemented throughout the whole of the organisation.
2) Management systems
Firms should be continually focusing on improving quality, environment and health & safety systems to remove risk of unethical practice occurring.
Compliance and auditing: Findings from audits conducted should be used to improve practice.
Reporting: Firms should make transparent, publicly available reports on their activities. Activity should be compared to set global benchmarks.
4) Procurement and supply chain management practices
Supply chains must effectively collaborate together to tackle unethical procurement of goods and services.
5) Financial management
Businesses need to influence their supply chains to improve best practice.
6) Human resources, recruitment, staff training and development
Employees must be trained and better understand the risks related to ethical and responsible sourcing.
7) Communications, External Relations & press/public relations
Transparent communication internally and also outside of the business with press and other stakeholders needs to be enforced.
8) Innovation, best practice, continuous improvement
Staff should be engaged in improving best practice and innovation used to improve the situation.