Accountability in supply chains – the UK government defends its record

Rice farmers ©ILO-Khalil ur Rehman Waleed

Ben Rutledge analyses the government’s response to the recommendations made in the UK parliament’s Joint Committee on Human Rights’ (JCHR) Human Rights and Business Report.

In April 2017, the UK parliament’s JCHR published its Human Rights and Business report. It called for “stronger legislation, stronger enforcement and clearer routes to justice” to protect workers’ human rights.

ETI provided written and oral evidence to the Committee and we supported many of the subsequent recommendations.

Now the government has published its response to the Committee’s report.

Committee report recap

In its report, the Committee acknowledged the ‘leadership’ shown by the government and praised the fact that the UK was the first state to implement the United Nations Guiding Principles on Business and Human Rights (UNGPs) by publishing a National Action Plan.

It welcomed new legislation such as the Modern Slavery Act, which requires companies to report on the steps they are taking to ensure their supply chains are free from slavery.  

Nonetheless, the Committee argued that much more needs to be done to promote responsibility and ensure accountability, particularly in global supply chains.

Government response

Some of the Committee's recommendations were accepted; the Government will for instance start publicly tracking and reporting on progress against the National Action Plan.

However, the majority of legislative recommendations were rejected in the following four main areas:

  • Human rights due diligence
  • Modern Slavery
  • Public procurement, and
  • Trade union membership
Human rights due diligence

It was suggested that the Government bring forward new legislation to impose a duty on all companies to prevent human rights abuses, as well as an offence of failure to prevent human right abuses for all companies, including parent companies.

This would require all companies to put place effective human rights due diligence processes both for their subsidiaries and across their whole supply chain, in line with the UNGPs.

The Government’s response was that there are no immediate plans to legislate.

Modern slavery

The Committee asked the government to support Baroness Young’s Modern Slavery (Transparency in Supply Chains) Private Members’ Bill, or bring forward its own legislation to achieve similar objectives.

The Bill seeks to strengthen and broaden the application of the transparency in supply chains provision of the Modern Slavery Act.

It calls for new requirements for government agencies to produce modern slavery reports, and for the introduction of mandatory due diligence in government contracts.

The Government replied that it is considering the Bill as it progresses through parliament, but that that it does not think that further primary legislation is necessary.

So whilst amendments to the Modern Slavery Act have not been ruled out, don’t expect to see any new laws on the books any time soon.

The Committee also highlighted the lack of a central list of companies required to report under the Modern Slavery Act. And they argued that the reporting requirements on transparency in supply chains are weak, which makes it difficult to hold companies to account.

The Government disagreed, and stood by its decision not to be prescriptive about what Modern Slavery Act statements contain.

They do not want to impose a one-size-fits-all approach or create a ‘tick box exercise’ encouraging companies to take a minimum legal compliance approach.

They also felt that the need for a central list of companies required to report under the Act can be better met by the private sector which holds more comprehensive and easily accessible data.

Public procurement

The Committee recommended that the Government start excluding companies from bidding for public sector contracts if they have not undertaken effective human rights due diligence.

They pointed out that if the Government expects businesses to take human rights issues in their supply chains seriously, it must demonstrate at least the same level of commitment in its own procurement supply chains.

In response, the Government highlighted that companies bidding for public sector contracts who have been convicted of child labour or human trafficking offences under the Modern Slavery Act are already excluded from procurement processes.

Contracting public bodies may also factor in other human rights considerations.

But this is not a requirement. And a company cannot be excluded from the procurement process for not having undertaken human rights due diligence.

The Government is not planning to introduce these requirements. 

Trade union membership

The Committee recommended that the Government oblige UK-owned companies to require the recognition of trade union membership of employees as a condition of contracts with suppliers.

The Government stated that it does not agree that the state should intervene in commercial arrangements in this way.

Reliance on voluntary measures

Whilst the government’s response may be disappointing to those who’ve argued for tougher rules, it is important to recognise that it (and indeed other governments) have introduced and supported both legislative and non-legislative measures to ensure compliance and foster greater respect for human rights.

For instance, the government supported the development of the Corporate Human Rights Benchmark, which ranks leading companies against their published human rights policies and performance.

Reading through the response, it appears that the government will continue to rely heavily on voluntary principles, guidance and codes of conduct, the promotion of good practice, and an expectation that the private sector will itself do more to ensure respect for labour rights in its supply chains.

While it is disappointing that many of the recommendations made by the Committee have been rejected, it is encouraging that the Committee undertook such a thorough review and put together a robust set of recommendations.

Showing leadership

Mapping progress, scrutinising policy, and publishing independent analysis and recommendations is itself a hugely valuable process.

Similarly, the fact that the government published a detailed response should be welcomed.

The Committee acknowledged that much progress has been made in developing its approach to human rights and business, and that the UK has shown leadership in a number of different ways.

At ETI, we will continue to make the case for further development of the UK legal framework on business and human rights. And we will continue to seek improved protections for vulnerable workers everywhere.

We look forward to engaging with the government in 2018, and hope that the drive to improve transparency and accountability in global supply chains continues.

For information on Human Rights Due Diligence, see ETI’s new Framework which serves as a guide for companies to help manage and mitigate labour rights risks, and understand why engagement, negotiation and collaboration is the best way to succeed.

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