Modern slavery and the supply chain

The UK construction industry must ensure its overseas supply chains comply with new legislation clamping down on slave labour in foreign sweatshops

Sad to say, there is a lot of dirty money in modern slavery. Of the 35.8 million people estimated to be in modern slavery worldwide, some 21 million are thought to be the victims of forced labour operations, with the majority exploited by private-economy enterprises generating illegal profits in the region of $150 billion a year. Even in 2016, slavery is a worldwide business.

The legislative response from the UK government has seen the introduction in England and Wales of the Modern Slavery Act (MSA), effective from October 2015 and requiring any business with a turnover greater than £36 million to make an annual declaration.

Making ethical supply high profile

The first key implementation date looms large next week, when businesses with a year-end of March 31, 2016 or later become required to publish a statement prominently on their website within six months, detailing what they have been doing to combat modern slavery during their financial year, officially approved and signed by a director, member or partner.

For the UK construction industry, having the MSA come into law has had something of a galvanising effect on the engine of responsible business, says Dan Firth, sustainable procurement manager at Interserve Support Services and chairman of the Modern Slavery Special Interest Group at the Supply Chain Sustainability School.

“It’s early days yet, but the Act has brought a focus to the discussion of supply chain ethics that wasn’t there previously. Ethical supply has been high-profile in some supply chains – for example, retail food, clothes and electronics – and what the Act has done is to make it a more general issue.”

In an industry described under its broadest definition as being comprised of up to 99.7 per cent of small and medium-sized enterprises, it is by no means just a matter of the £36-million-plus construction club coming on board, but their long and complex supply chains, too.

Modern Slavery Act 2015

Raising awareness

That MSA roll-out is still very much in its infancy, though, explains Ian Nicholson, managing director of ethical-sourcing consultancy Responsible Solutions.

“Last autumn, awareness in the supply chain was scarily low. I haven’t yet seen any evidence that smaller companies are comprehensively aware. Most major contractors are still talking internally about how to comply and haven’t yet engaged with their supply chain. Once they do, awareness will clearly rise,” he says.

Both Mr Nicholson and Mr Firth fear a lack of resources for policing MSA policies will in practice undermine efforts and limit impact, with the low likelihood of businesses being caught for non-compliance inevitably leading to corners being cut.

While positive about MSA impacts in principle, Professor Jacqueline Glass, chairwoman of architecture and sustainable construction at Loughborough University and leader of the Action Programme for Responsible Sourcing also has real concerns about what it will take to engage all construction.

“There’s definitely been a huge increase in interest in these issues as a direct result of the MSA hitting the boardroom table,” she says. “Don’t get me wrong, it’s a massive help, and will also propel businesses to invest in suitable training, certification and awareness programmes, but sadly I think, until we see a major non-compliance, then some parties just won’t prick up their ears – and really, they are the ones I worry about.”

Other prime supply chain sectors under the MSA spotlight, such as food and fashion, have already experienced catastrophic and public supply chain management failures, resulting in damage to reputation and even human tragedy, ranging from the market-cratering horsemeat scandal in Europe to the fatal Rana Plaza textile factory collapse in Bangladesh.

Accordingly, transparency and traceability are fast becoming collaborative-working watchwords for construction in today’s market, and the MSA will only serve to shine the spotlight more brightly on labour practices and human rights. With data flooding the public domain, the length and complexity of supply chains will no longer offer any excuse for unethical or irresponsible corporate behaviour. On modern slavery, it’s time to act.