Philippa Southwell, HTMSE’s founder, appeared on GB News for a live interview during which she discussed modern slavery and human trafficking in the UK’s textiles and garment industry. She focused on the exploitation in fashion as well as the legislation covering business modern slavery compliance.
Under the Modern Slavery Act 2015, Section 54, companies with a total annual turnover of over 36 million, are required to publish a modern slavery statement setting out the steps, if any, they have undertaken in the past year to prevent the risks modern slavery and human trafficking in their business and supply chains. The only formal requirements for the modern slavery compliance statement are that it is signed by a senior member of the organisation, such as a director, and that it is published in a prominent place on the organisation’s website.
During her interview, Philippa discussed the lack of implementation and enforcement of our legislation against non-compliant companies.
‘Forced Labour in Supply Chains’ event, organised by women’s rights organisation Romildamor, will be held on 12th August 2021. Philippa Southwell, HTMSE’s founder, will be attending and speaking on modern slavey compliance and ethical supply chains during the panel discussion along with Katharine Bryan, who is a Modern Slavery Research and Policy Manager at the Walk Free Foundation.
The discussion will address the issues of modern slavery and human trafficking in supply chains, their existence in the fashion industries, as well as business human rights and measures to rectify human rights violations in supply chains.
To sign up and for further information about the event, please see here.
Writing in an article in the Red Box section of The Times, they recommend specific measures and commitments to solve modern day slavery, emphasising that it requires and investment of capital and political will. They appeal to the G7 leaders to condemn forced labour in goods and services in their supply chains and commit to enforcing this.
It is proposed that G7 agree on specific and measurable commitments, such as eradication of forced labour in the G7 supply chains by 2025, and worldwide by 2030. Then, they should agree on steps to harmonise their laws and standards, followed by increase in investment in the countries trying to do the right thing. Lastly, the article calls for a ban to all state-controlled forced labour.
To read the full article by the Independent Anti-Slavery Commissioner and CEO of the Global Fund to End Modern Slavery, please see here.
Operation Fort is the UK’s largest anti-slavery prosecution, with eight members of a Polish criminal gang convicted of slavery, trafficking and money laundering offences on 5th July 2019.
The Independent Anti-Slavery Commissioner report highlights “Operation Fort is important not only because of the number of victims, but also the length of time the criminal gang was able to operate without disruption.” The gang’s activities were traced back to 2012 and continued four years after the Modern Slavery Act was passed in 2015.
The case involved 92 victims aged between 17- 60 who spoke minimal or no English, who were forced to work on farms, in factories, waste recycling plants, warehouses and live in dire conditions in the Birmingham area, although West Midlands PD estimated 400 Polish nationals may have been subject to this exploitation. Operation Fort was a complex case of modern slavery involving many criminal elements, including labour exploitation, human trafficking, fraud, deception, theft and physical abuse.
A key lesson from this case lends to employers and businesses being educated and proactive in spotting the signs of slavery and exploitation, and having effective measures in place to report concerns. There must be particular safeguards in place for temporary workers. Lessons to banks suggest they must proactively look for the signs of slavery within their branches, and also by analysing financial data. Furthermore, recruitment agencies can learn lessons from this case. They have an important role in identifying victims during interview or inductions, carrying out effective checks to detect anomalies, and an ongoing responsibility to check on worker welfare.
“Operation Fort sends a clear warning that no supply chain is safe from worker exploitation. Modern slavery and human trafficking gangs are highly adaptable; organisations must continually evolve to keep pace with entrepreneurial criminality.”
The Independent Anti-Slavery Commissioner provides a maturity framework for business’ compliance to the Modern Slavery Act:
BARELY ACHIEVING COMPLIANCE
Superficial modern slavery statement – policy but no action
Little or no mapping of supply chains
Minimal awareness of modern slavery amongst staff
Sole reliance on audits
No protocol for dealing with labour abuse
MEETING BASIC EXPECTATIONS
Evidence of activity or improvement in modern slavery statement
Identifying areas of high-risk in the business and supply chains
Educating suppliers on policy and setting expectations
Regular staff training and awareness-raising exercises
Basic protocols for dealing with labour exploitation cases
Installing whistleblowing hotlines
EVOLVING GOOD PRACTICE
External challenge or working groups informing strategy
Going beyond auditing – deep dives and unannounced visits
Cascading ethical standards throughout supply chains
In-depth training for staff in key roles, such as procurement
Commitment to worker engagement
Implementing the Employer Pays principle
LEADING ON HUMAN RIGHTS INNOVATION
Board leading on human rights strategy
Using data analytics to identify risk
Local, national, international intelligence gathering
Supporting suppliers to develop ethical competencies
Pioneering new ways of worker engagement, using technology
Factoring in the true cost of labour
Find the full Independent Anti-Slavery Commissioner report here.
The content of modern slavery statements: This section addressed inconsistencies in reporting approaches taken by different companies and the possibility of making certain criteria mandatory. This section also sought to address the fact that global movements in modern slavery legislation may make it desirable to ‘harmonise our approach’. The questions posed focused on reporting practices and the implications of making certain areas mandatory.
Transparency, Compliance, and enforcement: The second section of the consultation sought to propose the introduction of a central government registry, one designed to improve transparency. It also addressed reporting deadlines, proposing a single annual reporting deadline so as to reduce the confusion of multiple separate deadlines throughout the year. It finally sought to gain views into how section 54 of the Modern Slavery Act might be enforced. Questions were posed on each of these areas.
Public sector supply chains: The final area addressed in the consultation examined public sector supply chains. In essence, the consultation proposed that reporting requirements would be extended to public sector organisations with a turnover of more than £36 million per year. Reporting requirements would be for each individual government body to maintain responsibility, whether given individually or as part of a group statement. The questions posed by this section of the consultation focused on the apparent benefits and challenges of imposing modern slavery reporting requirements on large public sector bodies.
Earlier this year our founder and director Philippa Southwell was called to give oral evidence as a legal expert in the Home Affairs Select Committee Modern Slavery Inquiry. As well as giving oral evidence our director Philippa also gave written evidence. Issues that were raised during the inquiry concern the Modern Slavery Act 2015, in particular the section 45 modern slavery defence and excluded schedule 4 offences, and section 54 corporate modern slavery compliance. Also of note were concerns regarding the exploitation of British national minors involved in child criminal exploitation in the forms of forced drug possession, robbery, burglaries, and weapons running. Philippa gave legal analysis on all of these topics. Further areas of focus by the inquiry were:
The detention of Modern Slavery victims in immigration removal centres, and the adequacy of policy in relation to victims of modern slavery and human trafficking being held in immigration detention centres.
The role of the independent anti-slavery commissioner and the relationship between the different law enforcement agencies, e.g. the police, NCA, GLAA, etc, with the national referral mechanism was a major focus of the evidence given by law enforcement professionals and the former Independent UK Anti-Slavery Commissioner.
and, Victim, and victim support services’, perspectives on policy and support available to victims of modern slavery and human trafficking.
The evidence for the inquiry was presented as a combination of oral and written evidence and is drawn from a wide variety of professionals and organisations representing a broad spectrum of sectors. At present those who have given evidence include legal practitioners from a wide range of specialisms; the NGO sector; law enforcement professionals and organisations, including the Home Office, NCA, Local Authorities and multiple police forces; Academic institutions and the research sector; various corporate bodies; and multiple individual experts and specialist organisations.
The Home Affairs Select Committee Modern Slavery Inquiry is ongoing, with oral evidence continuing to be heard. The final findings have yet to be announced. Both the written and oral evidence that have been heard as part of the inquiry, including those submitted by Philippa Southwell, can be found here.
The Independent Review of the Modern Slavery Act 2015 has was published this week on the 22nd May 2019. The review has identified eighty recommendations for improvements to the operation of the act and wider policies to tackle modern slavery and human trafficking in the United Kingdom. The review makes significant recommendations for how legislation should be amended to increase compliance by businesses and improve supply chain transparency, including:
Recommendation 25: Failure to fulfil modern slavery statement reporting requirements or to act when instances of slavery are found should be an offence under the Company Directors Disqualification Act 1986.
Recommendation 22: The legislation should be amended to require companies to consider the entirety of their supply chains [in respect of modern slavery]. If a company has not done so, it should be required to explain why it has not and what steps it is going to take in the future.
Recommendation 18: In section 54(5) ‘may’ should be changed to ‘must’ or ‘shall’, with the effect that the six areas set out as areas that an organisation’s statement may cover will become mandatory. If a company determines that one of the headings is not applicable to their business, it should be required to explain why.
Recommendation 32: Section 54 should be extended to the public sector. Government departments should publish a [modern slavery] statement at the end of the financial year, approved by the Department’s board and signed by the Permanent Secretary as Accounting Officer. Local government, agencies and other public authorities should publish a statement if their annual budget exceeds £36 million.
The recommendations would significantly increase the responsibility on businesses to address anti-slavery in their supply chains, and afford the government greater power to punish companies that do not comply.
There has been an upraise in media on ethical supply chains in agricultural industries such as fishing, cocoa & coffee production, yet there are significant issues to be addressed in supply chain compliance and ethical sourcing compliance for the jewellery business – here addressing labour exploitation, child labour and human trafficking.
Examples of Human Rights abuses
Specifically in relation to child labour, estimates suggest over 1 million children work in artisanal or small-scale mining operations, despite being illegal at both the domestic level and by international law. Statistics from the African Centre For Economic Transformation suggest these children between 5 -17 are working on less than $2 per day, or receiving food as payment. Child labour has been reported in Ghana, Mali, Nigeria, the Philippines, Tanzania, and Zimbabwe, Burkina Faso, Uganda, the Democratic Republic of Congo, and Indonesia. However, regulation is lacking and children are continuously working in extremely dangerous and inhumane conditions, including exposure to toxic and explosive chemicals potentially causing brain damage, respiratory diseases from the dust, heavy strenuous lifting and exposure to dangerous machinery.
Concerning forced labour, it has been reported in Peru, Democratic Republic of Congo, Eritrea and in Zimbabwe where the military physically forced workers into diamond mining between 2008-2014. In the harsh conditions of the mining industry, workers are prevented from leaving either by blackmail or violence. In other cases, workers are trafficked to mines, by deception or force, in order to be exploited for mining work.
Wider rights abuses are continually taking place in the extraction industry, including land rights violations whereby indigenous populations have been displaced, armed conflict violations including money laundering to fund civil wars and violence by arming militias. Sexual violence, including abuse and torture by occupying mine workers, security guards and soldiers controlling mines has been reported, such as in Porgera mine, Papua New Guinea. Furthermore, environmental rights have been violated by disrupting 1000s of people and defecating habitats with toxic mine runoff, as in Nigeria 400 were children killed by artisanal mine toxic lead poisoning.
What are the current standards?
Alongside prominent Modern Slavery legislation, as seen developed in the UK, USA and developing in Australia, that holds businesses accountable for their own supply chain regulation, there are several international standards for human rights compliance yet none that are prominent enough to control this issue.
The United Nations Guiding Principles on Business and Human Rights declares that companies are by law required to undertake “human rights due diligence” within their entire supply chain. Furthermore, they must have systems in place to identify and remediate human rights abuses immediately. However, when it comes to implementation this only document offers only ‘guidance’.
Furthermore the Kimberley Process Certification Scheme (KPCS) is a significant international standard relating specifically to diamond extraction, to eradicate “blood diamonds” or “conflict diamonds”. However, again this proves too narrow, as it does not cover human rights abuses outside of active conflict zones.
The Responsible Jewellery Council (RJC) provides a certification system for all stakeholders in the jewellery supply chain. However, as this is an industry led program, it fails to have the legal and regulatory weight to ensure due diligence is done. Instead, according to findings by HRW it has flawed governance systems in which most companies assign their whole credibility for human rights compliance.
Are jewellery companies adhering to Modern Slavery compliance regulation?
HRW released a report in February this year focusing on the policies and practices of 13 major jewellery brands that generate over $30 Billion per year. Many reporters and researchers fail to receive any comment from major bands as to their slavery and trafficking risks associated with gold mining. HRW concluded that clear majority of jewellery companies are not meeting human rights standards within their supply chains. There are little hands on investigations, and too much reliance is put on verbal ‘assurances’ from their suppliers that the gems, minerals, products are ethically and sustainably sourced.
Two mining companies have monopoly over the global diamond industry, and account for over half of all diamond sales. De Beers, working from South Africa, Botswana, Canada, Namibia, and Russian company ALROSA. However, according to HRW, both of these fail to be transparent with the mines in which their diamonds are sourced.
Issue in difficulty for companies to trace their supply chains
With parallels to technology companies who source small parts from many locations, the jewellery industry has very complex supply chains, as oppose to fishing or agriculture where the total product (e.g. a fish) has one source of origin. For example diamond jewellery is handled by many actors, making it difficult for companies to trace their full supply chain. From the mines, diamonds are firstly sent to be cut and polished, whereby 70% of the global diamond supply is done in India and 20% in China, reflecting their low labour costs. The next stage in a generic supply chain is to jewellery manufacturers where the products are pooled and constructed. Finally they reach the end retailers, where the US has the largest market of 40% of global sales.
A crux of the issue is in the sale after the raw extraction process because as soon as the minerals go through the first process of trade or export, batches from many sites are often mixed up. This makes the sustainably and ethically sourced gems or metals untraceable from those that are product of exploitative labour. This is ultimately caused by negligence of the mine operators in dealing with and processing their products in a way in which they can be accounted for.
Some companies have CSR programs used to give back to the community and in exchange for their land use, build major infrastructure like schools, roads, and hospitals. (Harvard) However, there is speculation around using these methods as a way to be presented as human rights compliant, as these initiatives are undercut by their lack of transparency in their daily business operations and supply chain mechanisms. Analysis of the global extraction business points to the conclusions that this industry is fuelled by profit and capital gain, whereby there is a large disconnect between those that are receiving the benefits of the jewellery business and those that are suffering. This issue is on-going because perpetrators will not have interests in alleviating the abuses from their supply chains, unless legally forced to, or compelled by their customers through suspended of business.
Resolutions
Although the majority of companies are lacking in their supply chain compliance, HRW points out that some positive initiatives are blooming. For example a number of jewellers are exclusively working with artisanal mines that comply with the Fairtrade or Fairmined gold standard coming from Latin America, driven by consumers demanding ethical sourcing. In order to be most effective, successful domestic legislation such as the UK Modern Slavery Act should be used as a blueprint to regulate national supply chains. For countries that are less likely to adopt such policies, the international literature should become involuntary, binding and regulated, to cut out any internal corruption facilitating the mining industry. Furthermore, a percentage of the capital that is gained from mines should be redirected to the local communities through education and infrastructure to deal with the long term problem of child labour in the extraction sector.
