A report from the Chartered Institute of Building (CIOB), "Construction and the Modern Slavery Act, tackling exploitation in the UK", published in May 2018, urges the UK construction industry to do more to acknowledge the risk of modern slavery in their supply chains and to focus on how the risks are being managed.
Construction is particularly vulnerable to modern slavery due to its reliance on migrant and temporary workers, outsourcing, and an emphasis on cost drivers which can create an environment where there is a lack of transparency in labour supply chains and a risk of unethical procurement practices. In addition, as the skills shortage in construction is often filled by migrant workers in response to the need to complete contracts, there is a residual risk in the labour supply chains of undocumented workers.
Since 2015, there has been legislation in place to tackle labour abuses. The Modern Slavery Act 2015 requires all businesses with turnovers of £36 million or more to publish an annual statement detailing what steps they are taking to eradicate labour exploitation. Although there are no prescribed penalties for failure to publish such statements, reputational damage is likely to be a key feature for many organisations as investors increasingly start to measure an organisation's environmental, social and governance criteria.
The CIOB report suggests that construction companies are showing a degree of complacency and lack of understanding of modern slavery issues and concludes that "there is little doubt that UK construction supply chains are at risk of being infiltrated by criminal activities such as modern slavery". The report suggests that the construction industry has generally conflated immigration checks with anti-slavery measures, with priority being given to immigration checking, or has shifted responsibility down to the supply chain, but that it would be preferable to acknowledge the risks, set standards and expectations at the start of a project and take the initiative to embed these expectations into procurement processes.
It appears that the spotlight is on construction. The Gangmasters & Labour Abuse Authority (GLAA) has, since April 2017, had increased powers to search for evidence in relation to modern slavery and has identified construction as a high risk sector for exploitative practices. In February of this year, the GLAA investigated allegations of labour abuse at construction sites across London. However, the GLAA have also been working with the construction industry to produce a Construction Protocol, a voluntary information sharing agreement to help stop or prevent abuse or exploitation of workers.
The CIOB report also highlights poor transparency in supply chain reporting standards suggesting that many businesses have failed to produce the requisite modern slavery statement, or that some published statements do not meet the minimum legal requirements, such as not being visible on the homepage of the website, or being signed off by a director.
The modern slavery act statements are minimum requirements. The report suggests that to ensure real improvements and to raise standards there needs to be a change in culture and an open dialogue so that difficulties can be shared and tackled and that intimidation of workers eradicated.
For further information on the Modern Slavery Act visit our website and to check whether your organisation might need to take steps to comply with the Modern Slavery Act use our interactive Modern Slavery Act assessment tool.