A Parliamentary debate on modern slavery, as bill receives Royal assent

On Wednesday 11 March, Rathbone Greenbank Investments and key partners hosted a parliamentary debate to provide further impetus for the Modern Slavery Bill as it enters its final phases.

There was standing room only in the House of Commons’ Grand Committee Room as over a hundred business leaders, investors, NGO representatives and members of both houses of parliament gathered to express their support for Transparency in Supply Chains (TISC) legislation to form part of the final Bill.

Sir John Randall, Conservative MP for Uxbridge & South Ruislip, chaired the debate. After stepping down as deputy chief whip in 2013, much of his recent work in parliament has focused on the Modern Slavery Bill. He spoke of the tremendous change in the Government’s attitude over this time, as scepticism has been countered by clear support from the business and investor communities. Sir John underlined this by reading out statements from IKEA and Unilever.

Fiona Mactaggart, Labour MP for Slough, began her remarks by sharing her experiences of tabling the first TISC bill under the Ten Minute Rule back in 2011, building on the findings of a major report by the Centre for Social Justice.

Similar legislation in California had served as a useful model for the first bill. However, reaction to it was predictable: the burden on business would be too onerous. In fact, bad regulation, or a lack of it, can be equally burdensome.

When TISC legislation was tabled as part of a Private Member’s Bill in 2012, it received much more support despite eventually being talked out. At this stage, companies such as Mars and John Lewis became involved and an appetite from business for such a provision began to emerge. Home Office agreement to include TISC legislation in the Modern Slavery Bill in 2014 therefore proved to be a turning point.

There remains work to be done, however, and in many ways the journey is just beginning. The major requirement now is for a single repository for corporate transparency reports to be established so that concerned parties can easily compare and contrast company responses. This was a key weakness in the California TISC Act which needs to be addressed if the UK version is to represent global best practice.

Katherine Garrett-Cox, chief executive at Alliance Trust, offered a perspective from the business and investor communities.The issue of human rights in the supply chain is a material investment risk. Investors need to be fully aware which companies are leaders on the issue – and therefore have a competitive edge – and which are lagging behind.
General reporting requirements, such as TISC, help to create a level playing field: there may be some additional burden on companies, but if it’s equally apportioned then the benefits accrue to all.

The success of the lobbying effort to have TISC included in the Modern Slavery Bill demonstrates the power of collaboration between the public and private sectors. A key motive for having a fully integrated responsible investment process is the belief that if you choose to act against society, in time society will act against you.

Virginie Mahin from Mondelez International shared her views on combating child labour in the cocoa supply chain. This involved an exploration of Mondelez’s policies, governance and auditing, while also examining efforts to address the root causes of child labour in the sector which are primarily economic. The experience of Cadbury’s Cocoa Partnership led to the formation of Cocoa Life in 2012, a £400 million investment in partner communities, aiming to improve livelihoods and reduce the incentives for poor labour standards in supply chains.

Finally, Dr Aidan McQuade, director of Anti-Slavery International, brought proceedings to a close by paying tribute to those parliamentarians who have moved the Bill on hugely beyond its initial focus on enforcement. He thanked those involved for their considerable moral courage: that there is a provision for TISC is a tribute to the efforts of the Ethical Trading Initiative and many other NGOs and trade unions; and without business adding its voice, it might not be there at all.

Modern slavery is an opportunistic crime in which legal loopholes can contribute to the exploitation of individuals. The traditional response of business is to audit for such eventualities, which may not reduce the actual crime, but merely offer plausible deniability should issues be uncovered.

TISC is not an end but a beginning – business must now engage more systematically with regulators to ensure long-lasting reforms in supply chain management.

Matt Crossman leads Rathbone Greenbank’s engagement activity and is the secretary to the Rathbones Group corporate governance committee.