I rise to welcome the Government’s new clause 11 and to speak to new clause 5, which stands in my name and the names of other right hon. and hon. Members. It is very good news that the Government have finally moved on this matter in the final stages of the Bill. Not including supply chains was the single biggest omission from the draft Bill and the Bill introduced to this House, and it is good to see that this important concession has been secured from the Government.
I congratulate all those who have campaigned on this issue, including my hon. Friends the Members for Linlithgow and East Falkirk (Michael Connarty), for Slough (Fiona Mactaggart) and for Birkenhead (Mr Field), and, on the Government Benches, the right hon. Members for Uxbridge and South Ruislip (Sir John Randall) and for Meriden (Mrs Spelman). The hon. Member for Foyle (Mark Durkan) has tabled two new clauses that seek to extend the responsibilities of UK companies towards those who work in the supply chains, including compensation for victims and a ban on the importation of products produced using slavery.
Outside this House, a huge number of groups have also campaigned on the issue. I pay particular tribute to the Walk Free Foundation, the Ethical Trading Initiative, and the British Retail Consortium. I would like personally to thank all the groups and companies that I have met in order to inform Labour’s position, including Next, Primark, the Co-operative Group, Focus On Labour Exploitation, and Amnesty International.
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Including supply chains in this Bill is the right thing to do. We cannot be serious about tackling slavery in the United Kingdom if we are prepared to accept products made using slave labour being sold on our high streets or commissioned by our companies. There has been an increasing awareness that slavery and forced labour are increasingly linked to the production of goods for major UK companies. We saw the collapse of the Rana Plaza factory where, sadly, 1,200 people lost their lives, many of whom were making clothes for UK stores. We saw the newspaper story by Felicity Lawrence—she won awards for it—about the prawn fishermen who were held in a lifetime of slavery reinforced by routine murder, having to watch individuals being tied to masts between boats and torn apart. We know that those prawns were being sold to Tesco, the Co-op and Aldi in the United Kingdom. We also know of small children who have been paid pennies a day to sew sequins on to children’s clothes.
The strength of feeling about dealing with such examples is very high. Eighty-four per cent. of the UK public want legislation on this, and so do the overwhelming majority of companies. For far too long, it was just the Government who were holding up progress. While most large retailers are implementing policies to tackle the issue, it is hard to see tangible progress, and hard for consumers to judge between companies. We want to introduce mandatory standards for reporting to force companies to adopt standard procedures. It is important to stress that we want to support British businesses that are acting to create the level playing field that the Minister mentioned. This is not just about forcing companies to act, but helping them to act.
One thing that has become clear to me in looking at this issue is how complicated the supply chains for UK companies are. It is hugely complex for UK companies to inspect their suppliers. Even the best practice in auditing is not foolproof. As the right hon. Member for Uxbridge and South Ruislip said, we saw at the weekend the story about Whistles and the Fawcett Society T-shirts. I very much hope that The Mail on Sunday, which took such an interest in this area, will be campaigning hard to make sure that it talks about getting supply chains into the Bill and supports it as a very important piece of legislation.
The Bill is about changing market conditions and creating market incentives for suppliers to show themselves to be fair. That would mean suppliers being able to show that they are meeting International Labour Organisation standards, backed up by kite-marking and an inspection regime. This is hard for UK companies to implement individually, but collective action could make it the norm. The Bribery Act 2010 has been hailed for reducing the burden on businesses by creating consistent standards and an industry to audit what is happening.
The Opposition’s proposal in new clause 5 builds on the recommendations of the Joint Committee and is modelled on section 85 of the Climate Change Act 2008. It does not bring in regulations directly; rather, it requires the Secretary of State to do so using an enabling power in the Companies Act 2006. While the regulations are in secondary legislation, the new clause lays out the framework for how they should work. I want to emphasise how our new clause addresses the three key issues in making a workable change to the Bill.
The first issue is coverage. Our new clause 5 is explicit that this must cover large private companies and quoted companies. Of course, that may exclude some international firms working in the UK, but it is important to know that most will have UK subsidiaries that will be covered by the law.
The second issue is comparability. I am concerned that the Minister seemed to say that she did not think that this issue is particularly important. Consumers, non-governmental organisations and investors must be able to look at two reports and make direct comparisons between companies. Any large company could write a report laying out work in this area, but we need regulation to be specific enough to ensure that we can compare like with like.
Our new clause demands regulation under four headings, which were drafted in coalition with the Ethical Trading Initiative. The first is
“accountability for tackling modern slavery and forced labour, including policy commitments, resourcing and actions to exercise due diligence”.
The second is
“investigation, monitoring and auditing of modern slavery and forced labour risks in the UK and throughout their global supply chains”.
The third is
“support and access to remedy for victims of forced labour and modern slavery”.
The fourth heading, which fits in with what my right hon. Friend the Member for Birkenhead has said, centres on
“training of staff and suppliers,”
giving them access to expertise and advice.
Finally, our new clause deals with the issue of enforcement by placing the regulations within the framework of the Companies Act 2006. That is absolutely key, because if we look at what has happened in California—the Minister referred to the Californian model—we will note that it has been very hard to see which companies have complied and how they have done so. Proper enforcement is not just about companies writing a report; it is about companies complying with the reporting requirements. As we have seen in California, without an enforcement procedure, companies are able to interpret the reporting requirements however they see fit.
Placing the reporting requirement in the Companies Act deals with that. There is already a range of personal and corporate enforcement procedures. Directors would have individual fiduciary duties to ensure the accuracy of the report and those involved in the compiling of the report, including accountants and lawyers, would also be under a professional duty to ensure the report is not misleading.
Moreover, this is a report that would be used by investors, not just consumers, so it could put pressure on companies from both sides. If firm x produces a report saying it has done a and b to eradicate slavery and then a newspaper shows that to be incorrect, investors would have the right to take action against the firm for the resulting fall in share prices. That seems to me to be one of the biggest incentives we could provide in pursuing this objective.
We support the Government’s new clause 11, but the details of the three points I have just set out are to be left to secondary legislation.