Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015 — House of Lords, 2015-10-19
Topic: Law and Crime
Michael Bates (Conservative, Centre-right): I thank all noble Lords who have spoken in this debate and welcome the noble Lord, Lord Kennedy, to his new role and responsibilities. He has shown a great interest in the area of modern slavery for some time and we look forward to continuing that discussion. He is right to say that this has been—certainly in my time in both Houses—model legislation in the way that it had pre-legislative scrutiny before the Bill was published. It is interesting that the original Bill was published without a clause on the supply chain. That came later between two stages. There have been a number of commitments to review and consultations which have led to that role. When we consulted on the range it varied from £100 million to £60 million, and the noble Lord is right to state what we have come forward with. During those debates there was a little suspicion in some quarters of the House as to whether it would be under £100 million but it has come down on the side of £36 million, which is the right level This is new legislation—a new initiative that we are undertaking—so all aspects of it have to be constantly under review to see how it is being introduced and how it is working. I will come to specific questions but I particularly wish to make reference to the question raised by the noble Lord, Lord Kennedy. The noble Baroness, Lady Hamwee, referred to the Independent Anti-slavery Commissioner and his priorities. He produced his strategic plan for 2015-17 last week and it sets out clearly what he aims to do. His first priority of course—it is important to put this on record in the context of a debate on the supply chain, although we all want to do more in every area—is the identification and care of victims. We all felt that that should be his priority. The supply chain is important. It comes in at number 4 in the section on what he intends to do to promote awareness of these new obligations on businesses. There is also an element which runs on from that about international co-operation. It is a crucial element. We are leading the way in the international community and we want this to help us build relationships with other organisations and to encourage them to have similar regulations in place I turn now to the specific points, but not in the order in which they were made. The noble Baroness, Lady Hamwee, asked about the transitional provisions and whether the company will need to report only up until the end of the full financial year. When we commence this transparency and supply chain provision, we will include a transition provision so that the first organisations required to comply will be those whose financial year ends on or after 31 March 2016. This will ensure that all organisations have sufficient time to consider the new provision and the statutory guidance before publishing their first statement. A follow-on from that was to say how long after that period they will have to file that report; the noble Baroness, Lady Hamwee, referred to this. We anticipate that a period of six months should be sufficient The noble Earl, Lord Sandwich, asked whether this provision applied to charities, universities and other organisations. The organisation will be caught if it engages in commercial activities irrespective of the purpose and whether profits are made. Ultimately it will be for the individual organisations to take legal advice, consider whether they meet the requirements of the Act and determine whether they need to comply. I have touched upon the transitional arrangements As to whether guidance will be published before October to coincide with the duty coming into force, our intention is to publish guidance at the same time as we bring this provision into force, which we expect to be next week, subject to approval of these regulations The noble Baroness, Lady Hamwee, asked what buy-in has been detected in the Home Office from institutional investors. A wide range of businesses and investors called for this legislation to be introduced. This included a prominent campaign led by a range of major investment firms, which wrote letters on a number of occasions calling for transparency in supply chain legislation. These include Rathbones Investments, BNP Paribas Investors, Pardes and Aviva Investors. We are therefore confident that investors welcome this provision and will provide more information. In fact, during the debate the most effective voices to be heard by organisations will be from their own shareholders. It is for institutional investors—whether they be trade unions or other investors—to make sure their voice is heard at annual general meetings. We know from experience in some areas—for example, female representation among non-executive directors on boards—that that very powerful voice has been heard. We hope that institutional investors will ensure that the voice is heard and that companies will give an adequate response The noble Baroness, Lady Hamwee, asked whether the Home Secretary intends to report more frequently than the statutory minimum infills. The regulations set out, "before the end of a period of five years" Of course, "before the end" can be open-ended but it is certainly worth putting in a limit. While the requirement is to report only once every five years, if the Home Office receives clear evidence that the regulations are not achieving their objectives at an earlier point, we will of course consider conducting a formal review at an earlier stage I think that the message needs to go out to business that we are commencing this in a way which, while I do not want to use the term "light touch", tries to work with businesses to get their supply chains in order. But the clear message is that we expect action to be taken, and if it is not taken it is of course open to this or future Governments to come forward with further measures for consideration I was asked what HMG were doing about their own procurement. The transparency provision was specifically designed with the private sector in mind. The Government are of course subject to parliamentary scrutiny and freedom of information requests in terms of their duties, but this is a key element. We have a cross-government procurement policy so that modern slavery considerations become a key part of procurement processes. I believe that imminently, if not already, a question relating to the compliance of supply chains with the Act and the regulations is being inserted into that policy The noble Earl asked about the role of the Independent Anti-slavery Commissioner. His remit includes promoting good practice in the prevention, detection, investigation and prosecution of modern slavery offences, which includes encouraging good practice among businesses to prevent slavery from occurring in their supply chains. The whole point is that the anti-slavery commissioner is independent, which is another change that was made in the process of the legislation. We cannot instruct him on what to do, but the Home Secretary will ensure that she listens carefully to his recommendations and requests The noble Lord, Lord Alton, raised a number of points, one of which was echoed by the noble Lord, Lord Kennedy: why is there a reference in Regulation 4(2)(c) to "less regulation" rather than more effective regulation? The reference to "less regulation" reflects the standard-view terminology applicable to all business regulations. It reflects the fact that these regulations are from a Government who have as one of their aims a deregulatory culture. We have committees and processes that scrutinise what we do to ensure that what we put forward is consistent with the wider government approach. In any event, the review of these regulations will seek to ensure that they remain effective The noble Lord also asked when James Ewins’s report would be published. He has asked for more time to complete his work, but we expect Mr Ewins to publish his report on migrant domestic workers around mid-November, and we have made a commitment that we would seek to come forward with actions in that area by the end of the year. If that is not correct—