Putting people and the planet at the core of business

Modern Slavery in Supply Chains

What’s the problem?

21 million people, including five million children are in forced labour around the world, generating an estimated profit of $150 billion per annum.

From household-name retail giants to businesses that provide niche products and services for a specific sector, companies can both directly and indirectly impact the welfare of some of the most vulnerable groups through often unwitting involvement with unscrupulous business partners in their operations and global supply chains.

Heralded as a frontrunner in tackling what Prime Minister Theresa May has described as the “greatest human rights issue of our time”, the UK Government introduced the Transparency in Supply Chains (TISC) clause in the Modern Slavery Act (2015), requiring large companies to report on their actions to prevent abuse and exploitation in their supply chains.

One year since it came into force, the Act is proving slow in driving up corporate standards. The appointed watchdog, the Independent Anti-Slavery Commissioner, recently described many company statements as little more than “reiterations of generic human rights policies”, with the vast majority of firms failing to account for their actions on modern slavery prevention.


What’s the TISC clause in the Modern Slavery Act?

  • Section 54 of the Act requires companies with an annual turnover above £36 million to produce an annual ‘slavery and human trafficking statement’ for each financial year, indicating the steps they are taking to prevent modern slavery abuses in supply chains and operations.
  • Organisations must publish the modern slavery statement in a prominent place on their website and ensure it is approved by a Board of Directors and signed by a Director.

What’s CORE doing about it?

CORE was instrumental in securing the inclusion of the TISC clause in the Modern Slavery Act. Our initial analysis of the shortfalls in company reporting was featured in the Financial Times and we’re supporting the work of Business & Human Rights Resource Centre to drive up standards of reporting by creating a publicly accessible register of statements. We’re also continuing to campaign for improvements to the Act.

We believe the following actions are necessary to deliver real change:

  1. The Government should use its leverage to incentivise good practice by only awarding public sector contracts to companies which have produced a modern slavery statement. The Government awards £45 billion (excluding the NHS) worth of central Government contracts to private firms each year, granting it considerable influence.
  2. The Government should publish a list of companies that are required to report on their supply chains under the Modern Slavery Act. Currently there is no mechanism to check which companies are required to report.

CORE has developed Guidance and four mini briefings for companies and investors impacted by modern slavery legislation. Both provide assistance on how businesses can tackle modern slavery in supply chains and global operations. See the introductory video for more information.


Case studies 

LANDMARK LEGAL CASE: HIGH COURT AWARDS £1M COMPENSATION TO VICTIMS OF MODERN SLAVERY EMPLOYED BY KENT-BASED GANGMASTER

Following a high court ruling in 2016, owners of British company DJ Houghton Catching Services Limited were forced to pay £1 million to a group of migrant workers who were trafficked to work on farms supplying eggs for well-known brands.

Six Lithuanians formerly employed by DJ Houghton brought a civil claim against the company for subjecting them to inhumane and degrading treatment, which included paying them an income below the minimum wage, imposing salary deductions, and failing to provide adequate facilities to wash, rest, eat and drink.

Former employees told the High Court that they had been threatened and assaulted by Lithuanian supervisors who intimidated them with fighting dogs, and were made to work back-to-back eight hour shifts without a toilet break. Workers were forced to urinate in bottles and defecate in carrier bags in minibuses as they travelled between jobs on poultry farms that provided free-range eggs to supermarket chains Tesco, Asda, M&S and Sainsbury’s.

This landmark case sets a legal precedent, warning UK businesses to eradicate modern slavery from their supply chains and to expect legal action and high costs if they fail to do so. Since the ruling, more workers have brought similar claims of negligence, harassment, assault, breach of contract and breach of statutory duties.

THAILAND: SLAVE LABOUR IN UK SUPERMARKET SUPPLY CHAINS

In 2015, a Guardian-led investigation found that Asian migrant workers were brutally enslaved during the production of seafood for several major UK and US supermarkets. Thailand-based Charoen Pokphand (CP) Foods, the world’s largest prawn farmer, admitted to sourcing fishmeal used to feed prawns sold on the international market from boats manned by modern slavery victims.

Fifteen men documented the violence and torture that they and fellow workers endured while working non-stop 20-hour shifts trawling fish.  The men were trafficked on to ships that often stayed at sea for years at a time, where they had to survive on less than one bowl of rice a day and slept in cramped quarters without access to a toilet. Some also reported cases of labourers judged unfit for work being shot and thrown overboard.

Retailers sourcing prawns from CP had condemned the use of forced labour in their ethical trading policies and many claimed to be performing social audits on their suppliers.

Despite Thai authorities claiming a crackdown on modern slavery, there is widespread evidence that labour abuses continue.  Failure of suppliers to meet anti-slavery standards should prompt international retailers to take a stance against these practices, support efforts to combat abuses, and terminate contracts where necessary.