Human Rights Law The Modern Slavery Act Obligations in Transparency and Compliance. Kristy Grant-Hart. Sarah Powell
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1 Human Rights Law The Modern Slavery Act Obligations in Transparency and Compliance Kristy Grant-Hart An accomplished compliance professional and true expert in her field. Risk Universe Magazine Author Speaker Consultant Professor Former Chief Compliance Officer Sarah Powell Advocate of the High Court of South Africa Global Compliance Manager, Pearson PLC, London, England 1
2 Scenario 1: WHAT RED FLAGS? U.S. Federal Government Contracting Laws Federal Acquisition Regulation (FAR): 2006 law Severe forms of human trafficking Executive Order: Strengthening Protections Against Trafficking in Persons in Federal Contracts: Amendment to FAR to outlaw specific trafficking related activities Return Transport Fees required Requirement of anti trafficking compliance programs and audits For contracts worth over $500,000 contactor and all sub contractors are required to have a compliance program including anti trafficking measures Other Federal Laws Based on the Real Life Events in Qatar, FIFA Stadium Sites Estimated 1,000 workers die each year, up to 7,000 before the World Cup in Workers living in squalid conditions, pay huge recruitment fees, have wages withheld, passports confiscated and there is evidence of forced labor. Employers withholding exit permits. Photo Credit: The Guardian Both Fifa and the Qatari authorities have failed to take meaningful action. Despite five years of promises, Fifa has failed almost completely to stop the World Cup being built on human rights abuses. As of March 2016 Qatar has been given twelve months to end migrant worker slavery or face a possible UN investigation, paving the way for sanctions. 2
3 Scenario 1: What Due Diligence could you perform before hiring the recruiter? Due Diligence Procedures Online media review Local language media review Check court filings for lawsuits Visit premises Talk to workers in person (may need translator) Get and check references Require due diligence questionnaire Review company s compliance program Review training procedures Hire investigator Others? Scenario 2: WHAT RED FLAGS? 3
4 Applicability: California Transparency in Supply Chain Act Company doing business in California Global Turnover above $100 million Manufacturers and Retail Sellers Requirement: Statement on website detailing various anti slavery activities Remedy: California Attorney General can seek injunctive relief Outcome/Effect: Moderately successful Based on the Real Life Events in Bangladesh, H&M Clothing Factory In 2013, the Rana Plaza building collapsed, which killed 1,138 workers. Deadliest disaster in the history of the global apparel industry. October: Study shows H&M is dramatically behind schedule in making actual improvements in the factories it sources from. Many of those delayed improvements would ensure worker safety in case of a fire. Photo Credit: Business Insider Scenario 2: What compliance weapons could you use to help eradicate modern slavery from your supply chain? 4
5 Compliance Weapons Against Modern Slavery Annual Risk Assessments Policies, Procedures and the Code of Conduct Supplier Codes of Conduct Contractual Obligations / push down requirements Due Diligence on Suppliers prior to engagement and on an ongoing basis Training of people in the company on red flags Reporting mechanisms and whistle blowing Auditing and Internal Audit Scenario 3: WHAT RED FLAGS? United Kingdom Modern Slavery Act Applicability: Doing business in the United Kingdom Global Turnover above 36 million Not sector specific Requirement: Statement on website detailing steps taken to prevent slavery within the supply chain Remedy: Secretary of State has the legal capacity to go to court to require a statement to be made Outcome/Effect: 5
6 Based on the Real Life Events in the Thai Fishing Industry Lawsuit brought against CP Foods and Costco after Guardian exposed supply chain issues. EU has threatened a ban on Thai seafood which could cost the South East Asian $1bn a year. Abuses include: 20 hour shifts, Regular beatings and torture and executionstyle killings. Some were at sea for years Some had seen fellow slaves murdered in front of them Photo Credit: The Guardian Scenario 3: Which corporate functions might you need to work with in order to have an effective response to modern slavery risk? Corporate Functions to Include Human Resources Legal Procurement Local Managers on the Ground Audit Supply Chain Management Responsible Business Anyone Else? 6
7 UNDERSTANDING THE PROBLEM Always review the Annual U.S. Trafficking in Persons Report Industries with Severe Abuses Fishing Manufacturing Clothing creation Mining Dam creation Forestry Migrant farming Domestic help Sex industry 7
8 Look for these Red Flags Withheld documents or exit visa Physical punishment, captive conditions, physical injuries to multiple people in one place Unrestrained/inhumane working hours or conditions, managers/pimps in control Indentured servitude or repayment for travel to worksite Incapacity to leave or change jobs Movement of workers strictly controlled (e.g., picked up and dropped off each day by controller) Child labor Offering of sex for money Thank you! Let s Stay In Touch! Kristy Grant Hart UK Phone: +44 (0) US Phone: KristyGH@SparkCompliance.com Sarah Powell sarah.powell@pearson.com UK Phone:
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