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OPINION: The world needs new laws to end modern slavery in supply chains

by Patricia Carrier | Business & Human Rights Resource Centre
Wednesday, 20 May 2020 09:37 GMT

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Labour abuses disclosed by Tesco are common in the retail sector, but few companies have shown they are serious about eradicating exploitation

Patricia Carrier is a Modern Slavery Project Manager at the Business & Human Rights Resource Centre

Tesco recently received attention for disclosing it had uncovered abuses against migrant workers in its operations in Malaysia and Thailand. In its most recent statement published under the UK Modern Slavery Act (MSA), the company reported it had uncovered cases of passport retention, unexplained and illegal wage reductions, workers indebted to recruiters, and excessive overtime.

That Tesco was able to find these kinds of abuses in its supply chain is concerning, but not surprising. All evidence points towards abuse of workers, including conditions amounting to modern slavery, being pervasive in global supply chains.

While no company wants slavery in its supply chains, few have shown they are serious about eradicating abuse. In disclosing these abuses in their supply chain, Tesco has done exactly what it should do, and what the UK Modern Slavery Act requires of it.

The labour abuse disclosed by Tesco is common in the sector, particularly for migrant workers in both countries. Too often companies are not transparent about the labour exploitation of workers they have identified in their supply chains they find; or worse, they fail to identify it in the first place. Even where companies operate in sectors or in locations where labour exploitation is well documented, they often fail to publicly provide this information. Instead companies rely on general disclosure in hopes this will be sufficient meeting the requirements of the Modern Slavery Act.

Tesco’s disclosure tells us a couple of things:

First, that it has a system in place that is capable of identifying some cases of abuse. Tesco was able to uncover the various ways in which migrant workers were subjected to forced labour conditions through direct engagement with workers, including interviews.

Second, it understands that the type of transparency needed to tackle exploitation isn’t general disclosure designed to tick a box of a legislative requirements, but open and frank disclosure about what is a really happening in supply chains. This gives everyone, including other companies, the information they need to act to ensure workers are respected.

No company has their approach to tackling modern slavery where it needs to be. Our analysis of Modern Slavery Act reporting by FTSE 100 companies found that the average score for risk assessment and management was 31%. The average score was slightly higher for due diligence process at 35%. This is a disappointing assessment of the largest companies in the UK; arguably those that should be demonstrating leadership. Still, 5 years of mandatory transparency published under the Modern Slavery Act sees this kind of meaningful reporting by Tesco as the exception - also seen in a small group of other leading companies like Marks & Spencer, Marshalls, and Diageo - rather than the rule.

Part of the issue lies with the lack of enforcement and monitoring by government, which has largely been taken on by civil society, investors and even consumers. In practice, this has meant that it is mostly consumer facing or name brand companies that face scrutiny, leaving thousands of business-to-business entities free to fly under the radar. While there is no legal consequence for failing to disclose instances of modern slavery, many companies might decide it is better to keep quiet and avoid the attention.

COVID-19 has renewed the spotlight on the precarious position of workers, but business practices and supply chain conditions that led to this are long entrenched. There is a growing consensus that a legal duty of care for the protection of people’s rights and the environment is needed. Such a duty - which would go beyond transparency in requiring companies to act to mitigate risks - is being called for by enlightened companies, investors, parliamentarians and governments, alongside activists.

This idea was bolstered significantly earlier this month, when EU justice chief, Didier Reynders, announced a new legislative initiative to ensure companies act to prevent and reduce any negative impacts to workers and communities in their operations and supply chains, through mandatory due diligence.

The UK Modern Slavery Act is a leading piece of legislation on transparency in supply chains, but it will soon be overtaken by more effective laws that demand more of companies. Until then, welcomed admissions like Tesco’s are likely to remain rare.