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Bill Waite: New efforts to drive slavery (yes, slavery) from modern business

The International Labor Organization (ILO) estimates that 21 million people are in forced labor today. If you’re thinking “not in my backyard,” think again. 

A million and a half of these victims are in Europe or North America. In 2013, 181 years after slavery was abolished in the British Empire, there were 1,746 reported cases of slavery in the UK. Statistics for the U.S. aren’t available but estimates of victims run from hundreds of thousands to millions.

While the sex trade makes up a significant part of the population of those in forced labor, victims are also found in areas such as agriculture, support services and construction.

So what new can be done about it?

In 2015, the UK enacted the Modern Slavery Act. In addition to creating new criminal offenses of slavery and human trafficking, the Act also imposes an obligation on businesses with annual turnovers of more than £36 million (about $50 million) a year to make an annual statement setting out what steps it has taken to ensure that human trafficking and slavery are not taking place in any of its supply chains or any part of its own business. Alternatively the commercial organization may make a statement that it has taken no steps.

Statements must include information about what due diligence the organization has undertaken and what steps it has taken to mitigate the risks of slavery and human trafficking. Failure to make a statement can result in an application by the Secretary of State for an injunction to force compliance (Sec 54).

Clearly the expectation of the legislature is that for those organizations not minded to take this matter seriously — a very large number are taking it seriously — the risk of public shame will drive them to do the right thing.  Therefore there was no requirement to create a further criminal offense and a resulting financial sanction.

In addition to creating a public stigma, the Act may increase opportunities for victims to bring civil actions, and in this way increase the prospects of it achieving the legislature’s policy objective. While the Act does not create a civil right of action, claimants could allege tortious unlawful act conspiracies against organizations in circumstances where they fail to take any steps, and therefore do not make any statement, or where they openly state that they have taken no steps to mitigate such risks.

Liability may also arise if the commercial organization takes action to investigate supply chains and mitigate risk and that action is undertaken negligently or with insufficient resource, or if the results are ignored. Evidence of intent to cause harm could be inferred or alternatively be based on a reckless disregard of the claimant’s rights. The evidential basis for this claim would be that the commercial organization deliberately failed to comply with statutory guidance that if followed would would have identified the risk.

Group Litigation Orders could be used to facilitate “class actions” by adversely affected claimants. Fear of the public relations consequences of such a claim should motivate those who are recalcitrant or simply don’t care, and force them into considering how they’ll comply.

There has also been progress in the U.S. Earlier this month, the U.S. Supreme Court denied a petition for review by Nestle, Cargill and Archer Daniels Midland Co without comment. That means a class action claim brought by three plantation workers from the Ivory Coast alleging that the companies facilitated human rights abuses through business relationships with Ivorian Coast farmers was allowed to proceed. The plaintiffs face a long road to achieve recovery, including proving a sufficient nexus with the U.S., but the fact that the Supreme Cout allowed the case to proceed is significant.

Damage claims in the United Kingdom will hopefully never reach the levels of those found in the U.S., but the potential for victims to bring civil litigation in both the UK and the U.S. is good news in dealing with this pernicious and corrosive trade.


Bill Waite is a contributing editor of the FCPA Blog. He’s one of the founders of The Risk Advisory Group, established in 1997 with the objective of building Europe’s leading independent risk management consultancy. He serves as the group’s CEO and general counsel. He formerly practiced as a criminal barrister before joining the U.K. Serious Fraud Office in 1991 as a prosecutor. He can be contacted here.

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