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Latest 25 June 2018

How corporates are exploiting Government failure to tackle modern slavery

by Felicity Gerry QC

A crowd fund for a High Court application is seeking to fill a hole in the Government’s flagship 2015 Modern Slavery Act which was supposed to hold corporates to account for labour exploitation. Multinationals Capita and FDM will have to answer for bonding workers who paid for inadequate training, worked under onerous conditions and were unable to extricate themselves for two years. The crowd fund asserts that this is indentured labour and they have a point: the International Labour Office (ILO) defines forced labour to include:“situations in which persons are coerced to work through the use of violence or intimidation, or by more subtle means such as accumulated debt [emphasis added]”. Indentured labour was common in the British colonies in sugar, cotton and tea plantations as well as rail construction projects. According to Anti-Slavery International, it is still the most common form of modern slavery, despite being the least known.

Typical features of people in circumstances of forced labour include long working hours, unrealistic employment targets and under or non-payment. In the Capita and FDM cases, workers were treated as property and a means to gain advantage. I have seen evidence from FDM’s Chief Operating Office that the ‘training fee’ represents, in part, the profit FDM expects to make during the indenture period. This is consistent with workers being treated as the property of FDM. I have seen evidence that workers were asked to commute for seven hours a day at a cost of over half of their basic salary. This is consistent with underpayment and compulsion.

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Workers had a supposed obligation to pay sums ranging from the mid tens to the mid twenties of thousands of pounds, which would only be waived after two years. The training was poor, the employers had limited obligations to provide work and could terminate employment on a month’s notice and the ‘workers’ had to seek permission to work for anyone else. If work was provided, they could be required to work anywhere, nationwide, for short or long-term assignments. Julia Muraszkiewicz of Trilateral Research Ltd, London, UK which specializes in multidisciplinary expertise (criminology, victimology, politics, sociology and human rights) raises concerns that workers were tied to FDM and Capita, while FDM and Capita – the stronger parties – were not tied to them. She says “this practice shows us that understanding labour exploitation is an area that requires on-going attention”

While indentured servitude or forced or compulsory labour are criminal offences under the 2015 Modern Slavery Act for individuals who know or ought to have known that they were holding a person in slavery or servitude or requiring someone to perform forced or compulsory labour, it is difficult to apply the criminal legislation to a systemic corporate problem.

It is shocking that there needs to be a crowd fund to protect workers from forms of slavery when the Prime Minster has suggested that the Modern Slavery Act was the answer to corporate responsibility for slavery in supply chains. The Act brought in a statement procedure for corporate giants like Capita and FDM that do business in the UK and have a global turnover of at least £36 million in any financial year. This means they can make a statement about what they are doing to eliminate modern slavery from their business and supply chains but doesn’t require them to actually eliminate it. There are also few consequences if such a statement is false or inaccurate, other than the effect on brand reputation.

Logically to tackle modern slavery it needs to be mandatory for companies to take reasonable steps to eradicate – and not just make a statement of efforts – and to provide criminal sanctions for corporates who fail. Interestingly, both Capita and FDM have made modern slavery statements and published them on their websites. Within these statements it is suggested that they have policies and procedures in place and are committed to ensuring that slavery does not occur in their supply chains or any part of their business. The High Court action will no doubt expose whether these were a tick box exercise avoiding true accountability. In October 2017, I suggested a move to a Global Criminal Law Act for corporates, but unless and until that becomes a reality, the crowd fund to the High Court may be the only way to redress workers’ rights not to be enslaved. It has been suggested that there may be remedies to shareholders and actions for misrepresentation but, it seems the Government tumbled at the first hurdle, failing to make commercial organisations accountable for slavery in all its forms.