Modern slavery: increasing scrutiny on public procurement

Posted: 12/07/2018

There is a growing awareness that the eradication of the crimes of modern slavery requires a multifaceted approach, which necessitates an adoption by UK business of new attitudes and systems. There is also increasing recognition of the influence the UK Government can have in driving this change. Indeed, Kevin Hyland, the UK’s outgoing Independent Anti-Slavery Commissioner, recently set out how public procurement (the process by which government and public or local authorities purchase work, goods or services from private sector companies) can be used as an effective tool to address modern slavery in supply chains. Hyland’s intervention follows recent recognition that many of the UK Government’s own supply chains, which stretch around the world, are the perfect environment for modern slavery to thrive due to their complex and far-reaching nature.

Hyland’s intervention, which can be read here, provides examples that demonstrate the advantages of expecting more from public procurement. For instance, in 2017 the UK Government awarded contracts to private sector companies worth £220 billion equating to about 10% of GDP. Yet 40% of the Government’s top 100 suppliers in 2017 did not comply with the annual reporting obligations. This indicates an inherent lack of awareness of modern slavery and how it might affect business supply chains. Understandably, Hyland supports the Private Members’ Bill presented by Baroness Young of Horney, which if successfully introduced, would mean businesses being prevented from participating in public procurement unless they have fulfilled the annual reporting obligations set out in the MSA 2015. Hyland’s support comes following concern that the UK Government is turning a blind eye towards this compliance failure.

Whilst these proposals have been welcomed, there is the potential for significant disruption to supply chains. The inherent uncertainty, which arises from identifying modern slavery, will concern business not least due to the difficulties in effectively addressing modern slavery in different legal jurisdictions.

Hyland emphasises that, if used well, public procurement could help shape a private sector which protects the interests of all workers through anti-slavery measures embedded across all public buying. There is self-evident room for improvement given so many large companies supplying central and local government in the UK are not compliant with the basic annual reporting requirements. Indeed, those which contract with the UK Government need to take particular heed of these proposals because there are now many calls for the Government to create a central registry for companies' modern slavery statements to improve compliance. The successful establishment of a central registry for transparent gender pay gap reporting demonstrates that this is possible and it is notable that the Australian Government’s Modern Slavery Bill includes the creation of a central registry. Those calling for the central registry include Anti-Slavery International; British Medical Association; British Retail Consortium; Business and Human Rights Resource Centre; CCLA; Church Investors Group; Clarks; The Clewer Initiative; The Co-op; CORE Coalition; Ethical Trading Initiative; Focus on Labour Exploitation; The Freedom Fund; Freedom United; Hogan Lovells; Hope for Justice; The Human Trafficking Foundation; Humanity United; The Independent Anti-Slavery Commissioner; The Institute for Human Rights and Business; KnowTheChain; The Lord Bishop of Derby; Marks and Spencer; Marshalls; Ocado; Oxfam; Penningtons Manches; Sancroft; Shiva Foundation; Stronger Together; Tesco; Trades Union Congress; Unicef UK; Unison; and Baroness Young of Hornsey.

This article has been co-written with Alicia Clark, a trainee solicitor in the employment team.

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