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Every government department will have to report what they're doing to prevent modern slavery in their supply chains

By Patricia Carrier, Project Manager, Modern Slavery Registry

As a reform to the outgoing UK Prime Minister Theresa May’s flagship policy, it was announced with little fanfare.

But news that every UK government department will have to report what they are doing to prevent modern slavery in their supply chains has huge implications in a country where so much public work is outsourced to private companies.

Under the Modern Slavery Act, companies with a turnover of £36 million must publish statements about what they are doing to prevent modern slavery in their supply chains. In December, at the G20 summit in Argentina, May revealed her plans to apply this to the public sector.

It is a major development because the government spends more than £200 billion a year on procurement and millions of pounds are spent on services with a high risk of labour exploitation, such as cleaning, catering, security, waste collection, and logistics.

For example, debt bondage – where migrants become indebted to recruitment agencies for travel or illegal fees – is common in the cleaning sector. Other methods of covering up exploitation are also used, such as phony self-employment contracts. This problem is growing, and research suggests that the situation for migrants and other vulnerable workers is likely to get worse after Brexit.

This latest announcement comes at an interesting time for the Modern Slavery Act, and not just because the politician who shepherded it, first as Home Secretary and then as Prime Minister, is about to leave office.

The government is facing increased scrutiny over the limited impact of this legislation. A report by the Business & Human Rights Resource Centre in November found that 73 of the FTSE 100 companies are failing to properly disclose their anti-slavery efforts. The Act also allows for the bizarre situation where a company can report having taken no action on modern slavery and, by virtue of having reported, be in compliance with the law.

The UK government has for years congratulated itself on passing this landmark piece of legislation, the first of its kind. However, it is in danger of falling behind. Australia’s Modern Slavery Act has reporting provisions that are stronger in many respects than those of its UK counterpart, such as mandating specific areas companies should report under or committing in its original legislation to a central registry of modern slavery statements. It also already applies its Act to the public sector.

The recent UK government announcement, along with plans for its own centrally-run registry of companies’ modern slavery statements, are signs that the government recognises the need for reform.

But it could go further. Public procurement is vital to helping the estimated 24 million people toiling in forced labour around the world. A recent report looking at modern slavery statements from the government’s top 100 suppliers found that £2.8 billion went to companies that were non-compliant with the Modern Slavery Act. Only nine companies reported any progress over the past year in preventing modern slavery.

As a consumer, the UK government - just like companies - has a responsibility to investigate its supply chains. It also has the power to incentivise better behaviour by choosing companies with a clear commitment to address modern slavery risks and undertake human rights due diligence. It can prohibit those that fail to do so from bidding on or receiving public contracts.

The best way to find out if potential suppliers meet this standard would be for them to publish a modern slavery statement. This should be a requirement under the Act, and any company that fails to do so, or that publishes a non-compliant or weak statement, should be disqualified from bidding on public contracts.

Beyond this, in order to address the limits of requiring only transparency, the UK government should follow the lead of France, the Netherlands and Finland, and introduce mandatory due diligence, so that companies are required by law to identify and prevent risks of human rights abuse.

Only with a strong regulatory regime can UK taxpayers be confident that their money is not being spent on goods and services tainted by modern slavery.