Legal briefing | Governance & Trade Risk, Business Ethics & Human Rights, Health & Safety |

UK investigations into modern slavery and supply chain exploitation

Overview

Respect for the human rights of workers in businesses across all jurisdictions and supply chains is now recognised as a core part of corporate compliance and accountability. Yet despite advances in this area, including the introduction of ground-breaking legislation such as the UK's Modern Slavery Act, recent allegations of poor working conditions in Leicester's clothing factories highlight that modern slavery remains a real risk to both UK and overseas workers.

See our earlier MSA article for an overview of Corporate Reporting during the COVID-19 period.

A rise in online retail successes during the COVID-19 pandemic has been marred by recent investigations by the Sunday Times into Boohoo Group plc over allegations that workers in its Leicester factories were being paid as little as £3.50 an hour, significantly below the legal minimum wage of £8.72. Such allegations raise concerns regarding potential breaches of the UK's Modern Slavery Act. In addition, according to the investigation, the factory was operating during the local coronavirus lockdown in Leicester without additional health measures in place to comply with social distancing and COVID-19 health and safety ("H&S") requirements.

Leicester is the UK's largest clothing manufacturing hub and is reportedly home to about a third of the industry nationwide. The city has been at the centre of reports by labour rights groups and activists for a number of years over concerns regarding worker safety, exploitation and unsafe working conditions.

As a result of the most recent allegations of exploitation, the UK's National Crime Agency (NCA) has confirmed that it is investigating Leicester's garment factories and is also working alongside Leicestershire Police and other partner agencies to investigate concerns of modern slavery and human trafficking in the Leicester area. The Health and Safety Executive (HSE) has also stated that it will be actively investigating three textile businesses in Leicester.

In response to these allegations, Bohoo has insisted that it has a "zero-tolerance approach to incidences of modern slavery" and that it has "invested heavily to ensure that we meet all the guidance relating to self-isolation, social distancing and hygiene standards to ensure that every Boohoo workplace is Covid-19 safe".

Analysis

The recent Leicester factory allegations illustrate that modern slavery continues to pose a real risk in the UK. Such risks can all too frequently be overlooked by organisations, resulting in inadequate due diligence and supply chain monitoring. 

Modern slavery continues to be "present in every single area of the UK", with estimates of between 10,000 and 13,000 potential victims of modern slavery in 20131.

Non-governmental organisation Anti-Slavery International

In the landmark 2016 civil case concerning modern slavery (Galdikas & Ors v. DJ Houghton Catching Services Ltd & Ors [2016] EWHC 1376 (QB), the English Courts sent out a strong warning signal to organisations to ensure that adequate steps are taken to eradicate modern slavery and human trafficking from their supply chains. In the Galdikas case, the Court found that Lithuanian workers in the UK were being subjected to intimidation, abuse, unsafe working conditions and being paid below minimum wage. It was the first time that the High Court has ruled in favour of victims of trafficking against a British company. Given the numbers of estimated slavery victims currently in the UK, we expect that similar cases against corporates will follow.

Re-assessment of MSA risks, including the need to review and publish appropriately considered MSA statements, risk assessments and practices, will be crucial over the coming months. More broadly, organisations should use the current crisis as an opportunity to improve and invest in the right corporate governance and monitoring procedures to protect their own workers and those in their supply chains against exploitation. 

For further practical information on managing supply chain risk, please see the UK Government's latest Guidance on transparency in supply chains.


1 UK Government 2019 Annual Report on Modern Slavery.

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