Modern Slavery: The next step for the UK Government on public procurement?

September 16, 2016 •

Fancis West

By Francis West
Head of Private Sector Policy & Advocacy, UNICEF UK

With most commentators invariably heaping praise on the UK’s Modern Slavery Act of 2015, it will be a surprise to some that parliamentarians are already debating amendments to the Act. While the Act is certainly ground-breaking, with 1.2 million child victims of trafficking each year, it is important that no stone is left unturned in the fight against modern slavery.

Early analysis of the Transparency in Supply Chain requirement, enshrined in the Act, showed that out of 75 company statements, only 22 were signed by a director or equivalent and available on the company’s website homepage – both of which are legally required. Only nine statements met these requirements and addressed the six reporting areas suggested in the Act such as organisational structure, company policies and due diligence. With this in mind, it’s easier to understand why Parliament has started to look for ways to make the requirement work more effectively, with public procurement being viewed as the primary tool to achieve this.

Baroness Young’s Private Member’s Bill, which will be debated in Committee this month, presents an opportunity to use public procurement to catalyse respect for human and child rights in Government supply chains and contracted companies. The Bill seeks to amend the Modern Slavery Act in two key ways: by applying the requirement to report on efforts to address modern slavery and trafficking in supply chains not only to businesses, but also to public bodies procuring goods and services (Clause 1); and to exclude companies that don’t produce a statement from bidding for public sector contracts (Clause 2).

Clause 2 would act as a powerful incentive for businesses to comply with the reporting provisions of the Modern Slavery Act, and would be likely to increase awareness of the supply chain provisions amongst a wide range of actors. Clause 1 would put the onus on public bodies to undertake due diligence into their own supply chains and to identify and mitigate risks of tax-payer money being spent on goods and services linked to modern slavery and trafficking.

Responding to the second reading of the Bill, the Government outlined a number of steps it would take, and the areas it felt were covered by existing policy:

Crucially, the Government agreed that it was desirable that ‘information on slavery and trafficking statements informs future procurement decisions by the public sector.’ As such, there are plans to amend the cross-government procurement selection questionnaire so that companies wanting to bid for public contracts would be asked to confirm their compliance with Section 54 (transparency in supply chains) of the Modern Slavery Act. While this is welcome, the amendment of the pre-qualification questionnaire could be expanded to reflect a potential bidder’s commitment to the UN Guiding Principles on Business and Human Rights (UNGPs) in the round. Limiting the questionnaire to the provisions of the Modern Slavery Act seems a missed opportunity given that elsewhere the Government states its expectation that all UK businesses should be undertaking human rights due diligence (as per the UNGPs).

With respect to Clause 1 of Baroness Young’s Bill, the Government rejected the idea of requiring public bodies to produce modern slavery and trafficking statements, suggesting that public authorities can already be challenged under the 1998 Human Rights Act for acting incompatibly with the European Convention on Human Rights. While this may be true, the ability to hold an organisation to account retrospectively for infringing rights is distinct from encouraging that body to undertake due diligence to ensure that those issues do not arise in the first place. Equally, it would be interesting to see how many public authorities have been successfully challenged under the Human Rights Act for their procurement practices. I suspect the number is low.

Finally, the Government committed the Crown Commercial Service to publishing a procurement policy note ‘later this month’ that would act as guidance for central government departments, their agencies and non-departmental bodies on social, labour law and environmental aspects of the public procurement regulations. This would be a positive development. With this commitment being made in July, we hope to see this new note in the near future.

An issue that didn’t appear in either Baroness Young’s Bill or the Government’s response was consideration of using public procurement to drive up standards of reporting under the existing transparency in supply chain requirement. Few slavery and human trafficking statements cover the Act’s suggested areas for inclusion such as organisational structure, company policies and due diligence. At the Bill’s Committee stage, there is an option to explore using the public procurement process to ensure more widespread use of these suggested issues for inclusion in a slavery and human trafficking statement. Such action would kick-start more thorough and wide ranging due diligence processes amongst a wide cross-section of businesses and reflect the Prime Minister’s call to ratchet up ambition on ‘the great human rights issue of our time.’