Modern Slavery (Transparency in Supply Chains) Bill [HL] — House of Lords, 2016-07-08
Topic: Civil Rights
Richard Keen (Conservative, Centre-right): My Lords, I am grateful to the noble Baroness, Lady Young, for introducing this Bill and this debate. This Government are determined to tackle modern slavery and ensure that UK supply chains are not driving demand for slavery around the world. That is why we included a world-leading transparency in supply chains provision in the Modern Slavery Act, and why we welcome suggestions for strengthening our approach The provision in the Act requires all commercial organisations carrying on business in the UK which supply goods or services and have a turnover of £36 million or more to set out the steps that they have taken to prevent modern slavery in their business and supply chains. This transparency will allow consumers, investors and civil society, and indeed commercial organisations, to hold businesses to account and drive a race to the top The first proposal in the Bill is to extend the transparency provision to include public sector organisations as defined by Regulation 2 of the Public Contracts Regulations 2015. The Government fully agree that the public sector must play a full part in increasing the transparency of supply chains. Work to achieve this is under way. Several major public sector procurers have already introduced anti-slavery measures in their standard procurement procedures. For example, the NHS standard terms and conditions for goods and services suppliers include conditions on labour standards, and the Department for Health and NHS Supply Chain have also developed a labour standards assurance system that encompasses issues of forced labour for auditing suppliers in high-risk categories We agree that such good practice should be used more widely. That is why we are taking action to ensure that information on slavery and trafficking statements informs future procurement decisions by the public sector. We are amending the cross-government procurement selection questionnaire so that large commercial organisations wanting to do business with government will be asked whether they are compliant with Section 54 of the Modern Slavery Act. This will enable contracting authorities in the public sector to decide whether to exclude the organisation from the procurement process. The new questionnaire will be in place later this year We are not, however, convinced of the merits of the proposal in the Bill which involves applying to the public sector a provision that was specifically designed with private sector organisations in mind. The public sector already has different kinds of transparency requirements and accountability to Parliament, which means that it is held to account in a different way from the private sector. Public authorities are also already legally required by Section 6 of the Human Rights Act to act compatibly with the European Convention on Human Rights, which incorporates Article 4 prohibiting slavery, servitude and compulsory labour. Public authorities can therefore be challenged under the 1998 Act for acting incompatibly with convention rights, which private sector organisations cannot, and there are other ways to make progress that do not require primary legislation The Bill would also require all organisations to include their statements in their annual report and accounts. This would be a departure from the current provision, under which the Government have made clear that businesses can include their transparency statement in another publication or report, as long as it is clearly marked as their slavery and human trafficking statement and there is a link directly to the statement in a prominent place on the organisation’s website. The existing approach was very much based on a consultation with businesses and NGOs and reflected their desire to avoid a one-size-fits-all rule that could be restrictive. We remain open to feedback about this, but we would prefer to assess the impact of the provision in its existing form before considering any changes to the guidance This Bill would also require the Secretary of State to publish a list of all applicable organisations covered by this legislation. This is an interesting proposition. The Government are committed to doing everything we can to amplify the value of information in the slavery and trafficking statements. We want consumers, businesses and civil society to make informed choices that reward companies that take action to eradicate slavery. In theory, publishing a list of the commercial organisations which are captured by the duty by dint of their operation in the UK and their annual turnover could help with this. In practice, producing such a list is likely to be difficult and resource-intensive and may, in any event, not require primary legislation. We are prepared to look at this, but at this time we believe that no legislative change is needed. The Bill would make it mandatory for contracting authorities in the public sector to exclude an economic operator from a procurement process, if it was established that it should have complied with Section 54 but had not. It would also require the Secretary of State to publish guidance for those public contracting authorities on how to comply with this requirement and with Section 54. We agree with the objective of this provision but do not think that legislating for more guidance is necessary. First, contracting authorities can already exclude an economic operator which has failed to comply with Section 54 of the Act. This is provided for under Regulation 57(8)(a) of the Public Contracts Regulations 2015, which was referred to by the noble Baroness, Lady Hamwee. The regulation is not absolute, as she observed. Secondly, the Cabinet Office will later this month publish cross-government guidance on social, labour law and environmental aspects of the public procurement regulations. This will help public sector authorities decide when and how to exclude economic operators. This guidance will be issued via a Crown Commercial Service procurement policy note which is binding on central departments, their agencies and non-departmental public bodies and which is recommended for the wider public sector. Thirdly, as I mentioned earlier, we are already taking steps to encourage compliance with Section 54 by amending the cross-government procurement selection process. We are confident that these steps will achieve the desired outcome I shall now consider one or two particular questions raised by noble Lords. The noble Lord, Lord Whitty, acknowledged that the United Kingdom is at the forefront of this form of legislation. He suggested that it may not be enough for us to rely on consumers and consumer organisations. Over and above that, we rely more particularly on peer pressure. That was underlined in the consultation process that preceded the original Act. There is a desire, particularly on the part of larger businesses, to ensure that at an economic level they are not unfairly prejudiced by the unlawful and disgraceful conduct of potential competitors. Therefore peer pressure plays a part in this process The noble Lord referred to the strange omission of public authorities but, with respect, the legislation was designed to apply to the private sector. I pointed out the distinction that arises under the Human Rights Act. Under Section 6, all public authorities are bound by the terms of the convention. He also asked questions with regard to gangmasters and the Gangmasters Licensing Authority. As the noble Lord may recollect, the Government used the Immigration Act 2016 to extend the remit and powers of the GLA. It will be renamed the Gangmasters and Labour Abuse Authority, and its new mission will be to prevent, detect and investigate worker exploitation across the entire economy, which will result in more scrutiny of companies from a law enforcement agency which can examine their supply chains. I hope that meets his concerns about the position of the GLA in that context.