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Transparency in UK Company Supply Chains (Eradication of Slavery) Bill

Volume 551: debated on Friday 19 October 2012

Second Reading

I beg to move, That the Bill be now read a Second time.

First, let me put on record my tribute to Malcolm Wicks, the celebration of whose life was held today. He was a man of great principle and a good personal friend who will be sadly missed. I can say honestly that he was not just respected but deeply and fondly respected by Members on both sides of the House.

I welcome the new Minister for Immigration to his place, although I must say that this is not an immigration or migration Bill. It is interesting that until a week ago we were corresponding with the Department for Business, Innovation and Skills. I have in my hand a letter from the then Under-Secretary, which states that

“BIS recently consulted on proposals to improve corporate narrative reporting. As part of that we sought views on making it explicit that quoted companies should consider human rights issues in reporting. We are working up final proposals on reporting and hope to announce them later this year.”

I do not know why the Bill has been transferred to the Minister for Immigration, but that is not to say that it is devoid of immigration issues—the berries we get in our supermarkets and the production of the “Big Mac” chickens that were proudly boasted of as being “all British” at the Olympics but turned out to be run by gangmasters who hired a gang of subcontractors that treated people like animals and stole from them and who are now being taken to court by Her Majesty’s tax officers for taking tax off people and not paying it. I have talked to people who tell that me the conditions for people who harvest the asparagus from Peru that can be bought in our supermarkets are beyond what one would expect in any country. So, there are immigration issues for the UK.

Professor Gary Craig of the Wilberforce institute in Hull is at this moment preparing a report for the Joseph Rowntree Foundation. The subjects studied include forced labour among Chinese migrants to this country, forced labour in Northern Ireland, the regulatory and legal frameworks surrounding forced labour and a report entitled “The experience of forced labour in the food industry” that was launched in the House of Commons in mid-May and took a field-to-fork approach. They raise questions about migration in the UK, but the Bill is not about migration and the UK.

Perhaps I can help the hon. Gentleman. The Home Office and I have the lead in Government on combating human trafficking, on which I work closely with colleagues across Government. Indeed, only yesterday we published our interdepartmental report on combating human trafficking. Perhaps that is why it was felt to be appropriate for me to lead on the Government’s response to his Bill.

That explains why the Government need a pair of specs to look at what the Bill is about. It is not about human trafficking. There may be elements of human trafficking within it, but it is about the exploitation of humanity. It is about modern-day slavery; that does not require people to be trafficked across the world, but may include trafficking across the world.

Professor Craig goes on in his report to talk about major supermarkets, and asks how they can

“sell flowers or vegetables sourced from thousands of miles away (e.g. Asparagus from Peru) at prices which cannot possibly reflect appropriate labour costs”.

He says:

“These major retailers generally claim that their own practices are ethical and that they try ‘as far as possible’ to ensure that the practices of those who supply them…are also ethical”,

but how much do they try?”

No. I do not take many interventions. I do not have much time, because people treated the previous Bill as though they were in Committee and spoke at great length and in detail, when they should have done so in Committee. Not a lot of time is left for me to speak, or for others who wish to speak on the Bill.

The question is how ethical suppliers are. Professor Craig said:

“Despite a number of campaigns, there is little doubt that the products of slave labour abroad end up on the High Street of all our communities”.

The purpose of the Bill is to deal with that.

I bow to the Foreign Secretary’s knowledge of the thoughts of William Wilberforce, on which he expounded in his excellent book. He wrote time and again that Wilberforce said that he would not be turned aside from his campaign on slavery 200 years ago. The Bill aims at addressing the modern-day version of the slavery that Wilberforce thought he had eradicated 200 years ago.

Last night in the House of Commons, on anti-slavery day, we had a meeting of people who support the Bill, including its Conservative sponsor, the hon. Member for New Forest East (Dr Lewis). It is no coincidence that a large number of faith-based organisations joined the civil organisations supporting the Bill. Clearly, they all know that I am a humanist and do not have a religion, but the Right Rev. Albert Bogle, the Moderator of the General Assembly of the Church of Scotland, came down specifically to speak in support of the Bill. The Ecumenical Council for Corporate Responsibility, representing 19 ethical investment companies, came to speak. Fair Pensions and the Fairshare Educational Foundation, the Ethical Investment Association, and the Catholic Bishops' Conference of England and Wales were represented at last night’s meeting in support of the Bill.

Unseen UK was there; it has launched the “Walk Free” petition, which is gathering signatures at a rate of 10,000 a day. A young organisation with which I was very impressed, the Global Poverty Project, is negotiating contacts with the fashion industry to challenge it on how it brings to the high street goods that may have been sewn together by people who are getting a pittance wage and living in terrible conditions. Not many people would buy those goods if, when they walked into these fancy stores, the label stated, “This garment is made by slave labour.” I wish that organisation well.

The Institute for Human Rights and Business was also represented at the meeting, because the business community is interested in this. There were about 20 other civic society organisations there, too, and I thank them all. We pledged last night that this campaign would go on. If the Bill is talked out today, it is coming back. This issue is not going away. The campaign will go on, as Wilberforce did in his struggles, until he changed the attitude of his country, and then the world, to the abuse of people moved, as slaves, from Africa to other parts of the world.

Anthony Steen was also there. I pay great tribute to him. He is the founder and director of the Human Trafficking Foundation. If ever there was a cause for a knighthood, it is what Anthony Steen has done in this field alone. I also commend the all-party group on human trafficking, and Parliamentarians against Human Trafficking, a group with members from all parts of Europe, and wider Europe, who met in this House on Tuesday and Thursday to talk about human trafficking. The Bill does not contradict what the Human Trafficking Foundation is about, but it is not only about that; it is complementary to it.

In attempting to get the Bill through, we are standing on the shoulders of giants, because people have done so much, from Wilberforce right through to the modern day. I say “giants”; for some people, the EU is one of those giants. I notice the presence of the hon. Member for North East Somerset (Jacob Rees-Mogg), who may intervene; he may see the EU as a large body, rather than a giant. It is interesting that, in December 2012, the European Commission will launch its draft guidance to employment and recruitment agencies operating worldwide. It is talking about how best to implement the United Nations’ guiding principles on business and human rights. It is important that those who support the recruitment and employment industry, and who also want to see better standards to ensure that bottom feeders do not exploit workers, engage in this process. I commend the company, Manpower, which has spent five years auditing its supply chain right down to the lowest level. Its managing director speaks out strongly on the subject. He spoke on behalf of those who put through the Bill similar to this one in the California legislature, where such auditing is now law.

Talking about giants, it is interesting that President Obama last week called modern-day slavery

“a debasement of our common humanity.”

He spoke about

“the injustice, the outrage, of human trafficking, which must be called by its true name—modern slavery.”

There are giants in the field and I am happy to step up on their shoulders.

When we are talking about a Bill to do with trade and business, not just to do with migration, it is interesting that when the FairPensions campaign for responsible investment and the Ecumenical Council for Corporate Responsibility wrote a letter, they wrote to the Secretary of State for Business, Innovation and Skills. At my suggestion they copied it to the new Minister for Immigration, but only because we had found out that the Minister for Immigration, rather than the Business Secretary, would reply to the Bill.

What is the purpose of the Bill? It is to create a framework that large companies can use to review the contract arrangements that they have entered into for the supply of their goods and services, and by including services we extend beyond the California Act. It is interesting that in the discussions last night, many of the organisation said, yes, that includes public procurement —the £9 billion of public procurement contracts that this Government give out. They must audit, right down to the roots.

It has been embarrassing when organisations have been found to have people working in their buildings who do not have the right to be in the UK and who come in with gangs of workers. I work very late at night in this building. I go home at 1 am or 2 am because I like working in the evening. I have often tried to speak to the people who work here in the lifts. Many of them cannot speak English. That does not mean that they are not legal immigrants, but when Ken Livingstone was Mayor of London he reckoned that 500,000 people live in London illegally. The Government give no subsidy to London for their education or other services. Those people are exploited because they have no right to be here, so they can be paid poor wages or kept in terrible conditions.

The growth of TB in London is attributed to the fact that people are living in such terrible conditions, and to the fact that they are afraid to get treatment because they would then be sent back home. That is a problem common to large conurbations in this country and others.

The Bill represents a challenge, but not a threat. It is not a big stick to beat companies. It aims to encourage companies to seek transparency from their suppliers and from those who supply their suppliers, right back to the first transaction moved by their finances and their sale of products and services. It is an invitation also to raise the ethical standards of their trade. That is what Wilberforce was about. It was not necessary to have enslavement in order to have trade. The Bill aims to lead the fight to eradicate the incentives to enslave men, women and children, just to shave a small percentage off the price of goods and services in the UK.

We hope that that invitation will be taken up because it is an opportunity to win the right to display a sort of kite mark. That is what is happening in California, where companies are saying, “We have audited, we are ethical, we are proud of being ethical. Buy our goods and services because they are worth something extra.” That is what I want to see companies looking for—pride and marketing value, such as the Body Shop brand, which was clearly not tested on animals and became an example of ethical production. That changed the view of the purchaser and of other companies in the high street so that they could match the achievement and win in that market also.

How can the Bill do this? We are following the California Act, which was mentioned by President Obama. Clause 1 says who should do it and for what purpose. Companies with annual receipts of more than £100 million worldwide should disclose what they have found. The phrasing of subsection (2) is clumsy. It refers to

“the worst forms of child labour”.

We have had to stick to that wording, which is defined in article 3 of the International Labour Organisation’s convention No. 182. That refers to

“work which exposes children to physical, psychological or sexual abuse…work underground, under water, at dangerous heights or in confined spaces…work with dangerous machinery, equipment and tools, or which involves the manual handling or transport of heavy loads…work in an unhealthy environment which may, for example, expose children to hazardous substances, agents or processes, or to temperatures, noise level and vibrations damaging to their health…work under particularly difficult conditions such as work for long hours or during the night or work where the child is unreasonably confined in the premises of the employer.”

Is there any hon. Member here, or any member of the Government, who does not want to oppose those worst forms of child labour? I do not think so. Do people want to buy products that they know have been made in that way? Remember the scandal when during the Beijing Olympics children were shown sewing leather footballs that were sold in Europe for a vast profit. There have been exposures again and again of women locked up in factories in Malaysia, not paid, not fed and not allowed to go home, making garments that end up on our high streets. Those are the things that the Bill asks companies to seek out and do something about.

Clause 2 is about disclosure. Companies must disclose on their website and in their annual report what they find. If they do not have a website, they must produce a report within 30 days on what they have found in their supply chain. Is that so much to ask? I do not think so. That is asking companies to look closely at what is happening in their name, with their money, on behalf of their customers. There is a movement out there that wants to see us trading ethically. Fair Trade is the beginning, but ethical trade is the end, and that is what is coming to us. If we go to meet it, we will be applauded; if we do not, we will be abused and put down as being people who do not really care because we still think that it does not matter as long as UK plc makes a buck. That is no longer what the public want.

Clause 2(3) is about what will be disclosed and how—the methodology. It is the same methodology as set out in the California Act, which has now been embraced by many companies. Interestingly, 40 multinationals from the UK trade in California and will have to go through this process if they wish to do business there. Many of the companies will, I hope, then be able to lead the way in the UK. I have had letters of support from BP and from the people who bought the 26 sites in olefins and derivatives from BP, INEOS. We have companies saying that they want to see the Bill through because they are willing to do this. So we have the audit of suppliers and direct suppliers and setting up internal accountability standards, providing companies’ employees and management with direct responsibility for the supply chain, with the accountability to reply and report on the supply chain right down to the bottom. That is all very sensible.

Clause 3 states that when the company finds people who are being abused in these ways, it must then seek out ways to assist them. It states that it

“shall take action necessary and appropriate to assist people who have been victims and shall report on that action in their annual reports”

That is a very sensible requirement. Companies do say, “Yes, we have done it. We are ethical. We do not have any problems.” But if someone finds that they are not ethical, they are found to be denying very publicly the audit that should have taken place. I remember going round companies—some Government Members may not like this—with a lot of stickers always in my pocket showing a skull and crossbones and saying “Contaminated by apartheid”. It may be that eventually, when companies are denying what they are doing in the supply chain, people will be putting stickers on their goods saying, “Contaminated by child slavery”, or “Contaminated by slavery”. Then they may have to look again at what they are doing when they say that they are doing everything correctly.

The Bill might be talked out today, but it is coming back. It will not go away. If the Government had the courage to give the lead to UK businesses, those businesses can still win the markets, but they can also win the next stage of Wilberforce’s campaign as set out 200 years ago and challenge and help to eradicate modern day slavery.

I begin by congratulating the hon. Member for Linlithgow and East Falkirk (Michael Connarty) on his speech and on taking the Bill forward. I am delighted and proud to be one of the 11 sponsors from five parties, including no fewer than three colleagues who are all named Jim—I am not quite sure of the significance, but I felt that it was worth placing that on the record.

I was first recruited to this admirable cause by the hon. Member for Slough (Fiona Mactaggart) when she brought in a ten-minute rule Bill along the same lines, and it was then taken up by the hon. Member for Linlithgow and East Falkirk in his excellent Bill before us today. I know that he, like me, will be disappointed if it does not proceed to Committee, but it has been given an airing today, as he rightly said, and I am sure that we are all grateful to the Government for having made certain that that would happen.

There was some confusion over the question of human trafficking in relation to the Bill. Human trafficking is certainly one of the concerns covered, but it is neither the Bill’s exclusive focus, nor even its main focus. The main focus of the Bill, as became apparent in the hon. Gentleman’s speech, was brought out at yesterday evening’s reception, which I was pleased to attend. We heard some horrifying tales about what actually goes on overseas in the unsupervised chain of production for many products we see on supermarket shelves, often without the knowledge of not only consumers, but the companies selling the goods. It is therefore also in the interests of the companies and their reputations that they should make an effort to investigate the chain of production for the products they sell so that no one would be tempted to go around marking them on their shelves as having been contaminated by the ruthless exploitation of child labour or that of other impoverished people.

As the hon. Gentleman said, the Bill has a light touch. It would affect only very large companies, companies that have the resources to carry out the sorts of examinations and checks that would assure them and their consumers that the goods being sold had not been created as a result of an unendurable chain of human suffering. I think that I am right in saying that BP is an example of a major company that, although very tough-minded, has nevertheless seen it as appropriate to adopt such measures. If BP can adopt such measures, that sets a good example for other large companies to do likewise.

I will not give way, for a reason I am just about to explain.

While talking of setting good examples, I would like to say that there are times for long speeches and times for short speeches. This is a time for short speeches. I look to hon. Members on the Back Benches and on both Front Benches to follow my good example and make short speeches so that this worthy Bill can proceed as it should to Committee.

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) has brought forward a noble Bill that, in its intention and motivation, is of the highest standards this House ever reaches. As he said, it continues in the tradition of Wilberforce’s campaign to eradicate the slave trade and then slavery throughout the British empire. I believe that the Act of Parliament that finally eradicated slavery throughout the empire was passed three days before Wilberforce’s death, so he was able to see that moment.

I hope that it will not take quite so long for this Bill to be passed and that the hon. Gentleman will see very many years go by after his aim of getting slavery taken out of the practices of multinational companies has been achieved.

As a general rule, I am not in favour of imposing extra regulations on business. We need to have a competitive and free market with companies that can trade. I am very suspicious of fair trade as against free trade. Fair trade often means protectionism by another name—choosing one’s preferred people as opposed to those who are most competitive—and cutting out the poorest in favour of those who are good at filling out bureaucratic forms. We should always be careful when we consider doing anything that might encumber free trade or put burdens on business. We must remember that when burdens are put on business, it is not the profits of the multinationals that suffer but the electorate—often the poorest of our electorate—who find that their prices go up.

Within any advocation of free trade there must be some limits. The hon. Gentleman mentioned the proud Christian tradition of opposing slavery in all its forms. Going back to my O-levels, I remember studying the letter of St Paul to Philemon, which sets out the Christian case for opposition to slavery. In the Roman empire, slavery was perfectly legal and legitimate. There was no reason to oppose it; it was part of the status quo. The young, burgeoning Christian community lived within that—they had to. They were persecuted enough already without taking on one of the foundations of the Roman empire. St Paul, writing in prison to Philemon, who is a Christian, about his slave who may have escaped, tells him to treat Onesimus as a Christian brother, not as a slave—not as a piece of property but as somebody of worth and value equal even to a Roman citizen. That has set the path, followed by Wilberforce and others, to ensuring that as a nation we have done whatever we can for the past 200 years—after a pretty shameful history beforehand, it has to be admitted—to ensure that slavery is not part of the system of global trade and not something from which British companies profit.

So what is the right level of burden to put on companies—multinationals—that are facing this problem? First, there is the question of their own consciences. Before legislating, we should always see whether companies already take the view that something is fundamentally wrong and has no place in their supply chains. That is a good starting point. With the growth of international trade, many big companies will have major intermediary suppliers. They will not deal with thousands and thousands of small suppliers across the globe but have intermediaries they are able to go to. Those intermediaries should be able to assure the companies that they themselves do not use any improper forms of labour—slaves or children—in the production of the goods that are sold.

We then need to go to the next stage and look at the companies that are supplying to the intermediaries. There may be many thousands of companies, some of which are very small or in very remote parts. My professional background has been in investing in emerging markets. While I have been doing this, the number of emerging markets that have come into the investable framework has been growing. Countries of extreme poverty are now beginning to come into the global system, and auditing them efficiently and properly would be a pretty onerous task to put on to businesses. However, in relation to slavery, it is almost certainly a right and moral one for us to adopt.

The situation that companies will face is one that I have faced as an investment manager in looking at the companies that we invest in for our clients—that is, going to visit them to ensure that their practices are proper. I confess that in one of my company visits I was suspicious that the company did indeed use child labour. The business was a very attractive one, but I thought that my clients, and the pension fundholders they represented and the charities they served, would be appalled to be making money on the backs of children. The individual conscience of company managers and investment managers is an important starting place, which I think helps to achieve the objective behind the Bill.

The question then remains, what are we to do about people who do not have any conscience? Is legislation appropriate, right and proper? There may come circumstances in which that is the case. Perhaps this is more a point for a Committee speech than for a Second Reading speech, but I believe the Bill needs some adjustment to achieve what it is intended to. That is partly because it is trying to do a bit too much. I would prefer it to concentrate purely on the issues of slavery and child labour, which are specific and clear. Other issues can be harder to define and can therefore place a more difficult burden on companies. I hope that the Government will consider the matter seriously and see whether there is something they can do to ensure that the required standards are met.

My hon. Friend may not be aware that just yesterday, colleagues in the Department for Business, Innovation and Skills laid draft regulations that will ensure that as part of their narrative reporting, quoted companies will have to report on any human rights issues necessary to understand their business. Perhaps we can achieve the necessary reporting standard through that avenue without the burden of the Bill.

I am grateful to the Minister, and I take this opportunity to welcome him to his new post. He is the most civilised of Ministers in the Government, and I am glad that he has moved, because when he was in his last post I opposed practically everything that he did. I sincerely hope that I will now be able to support him more often. In reference to the Board of Trade’s action, the term “human rights” does not necessarily have a very good name in the House. I am slightly cautious of it as a generic term when we have a pretty awful Human Rights Act and a European Court that often gets the wrong end of the stick. There are fundamental principles of humanity in the Bill that we are discussing, not just the woolly words “human rights”. So I am sort of grateful for what the Minister says—more grateful than for a lot of what he said about the constitution when he was the Minister responsible for it—but perhaps not fully grateful.

The Government need to take up the running and take the matter out of the hands of a private Member’s Bill, which cannot necessarily be given the time and resources it needs so that we can get the phraseology as tight as it ought to be. They should find the parliamentary time to introduce a detailed Bill, which could be used to ensure the correct balance between burdens on business and benefits for people at risk.

There is also a twofold economic argument for such a Bill. The hon. Member for Linlithgow and East Falkirk alluded to the first part of it, which is that companies that fail to follow the basics of humanity will be embarrassed in their marketing. They will be brought to shame in front of the nation if it is discovered that they are using child labour or slave labour in the production of their goods. That will bring the crack of the economic whip on their profits, which is a very good means of ensuring that companies behave better.

The other point that is worth making is that companies that treat their employees well tend to be more profitable and successful. Sometimes they are very large employers. I have spoken to Hon Hai, which employs more than 1 million people and is one of the biggest suppliers to Apple. It finds itself employing so many people that it provides an almost governmental style of welfare for them, because it is in its own interests to do so. If it is to employ such large numbers of people in an environment in which there will inevitably be difficulties and disputes, it needs to take care of its employees in the round rather than simply getting the maximum out of the cheapest individual employee.

There is also the argument that if companies move away from child and slave labour, they will be able to mechanise more easily and therefore be more productive and efficient. There is a good argument, which has long been known, about the inefficiency of slave labour. The financial incentive that we talk about when discussing tax rates applies to people in routine jobs in poor countries just as much as to bankers in the United Kingdom. I have no doubt that there are robust economic reasons for wanting to avoid slave labour, and robust moral reasons as well. It is important—the mood of the House is almost certainly along these lines—that the Government should take the matter up.

The debate stood adjourned (Standing Order No. 11(2)).

Ordered, That the debate be resumed on Friday 2 November.