A new report from the Chartered Institute of Building (CIOB) says that the construction industry is failing to eradicate worker exploitation, despite recent legislation. Lowest cost tendering, abuse of the retentions system and late payments are pricing ethical practices out of the industry
The CIOB report also alleges that blacklisting has not completely gone away.
Since the introduction of the Modern Slavery Act in 2015, many companies have introduced immigration checks on their workforce but have failed to go beyond this and tackle the systemic employment abuses that remain prevalent.
The CIOB is urging UK contractors to face up to the significant human rights risks in their supply chains, with the launch of a new report that finds both British and foreign workers at risk of exploitation.
Its report, Construction and the Modern Slavery Act: Tackling exploitation in the UK, is published as the Gangmasters & Labour Abuse Authority (GLAA) and National Crime Agency (NCA) jointly lead a national enforcement campaign involving police forces and other agencies aimed at tackling labour exploitation. NCA analysis has identified construction as one of the most common sectors for labour exploitation in the UK.
Criticising the industry’s slow response to the Modern Slavery Act, CIOB’s report highlights the aggressive business models that are creating an environment for unethical procurement and recruitment practices, and the systemic auditing failures that are allowing criminals to infiltrate major projects.
Problems start at the top of supply chains with lowest cost tendering, abuse of the retentions system and late payment pricing out ethical practices. The situation is creating an imbalance of power that leaves all nationalities vulnerable to exploitation. Illegal activities such as blacklisting are also believed to be continuing, despite recent high profile court cases, it says.
Major contractors in construction typically have long and fragmented supply chains, with little visibility beyond tiers one or two. They are also heavily reliant on temporary migrant labour, a significant indicator of risk. Nevertheless, the report found examples of complacency and disbelief that major projects were vulnerable to criminal infiltration and human trafficking. This contrasted with incidents of modern slavery being found on major UK infrastructure programmes, PFI hospital projects, power plants, recycling centres, renovation projects, demolition sites and local authority schemes.
CIOB chief executive Chris Blythe said: “It’s time to get real about the challenges facing UK construction. Contrary to public perceptions, modern slavery is not confined to small illegal operators. Criminals are attracted to big business because of the greater profits that they can earn. Unscrupulous labour providers, operating in the grey area of the law, are also creating misery for thousands of British and foreign workers.”
The report highlights:
- How industry is conflating immigration checks with modern slavery checks. This is ineffective because many people trapped in modern slavery have a legitimate right to work in the UK.
- Severe weaknesses in commercial auditing models, with auditors disincentivised to report problems to the police
- Poor transparency in supply chain reporting standards, with many eligible companies failing to produce a modern slavery report in the first annual reporting cycle. A significant number of published statements do not follow minimum legal requirements, including being visible on the company homepage and being signed off by a board director.
- A tendency for companies to water down their modern slavery statements to remove mention of risk, against the spirit of the Modern Slavery Act.
- Examples of sharp practice, with major players defaulting to legal compliance exercises that push responsibility onto their less well-resourced suppliers. This is also against the spirit of the legislation.
The CIOB’s report, written by Emma Crates, explores the legal, investor and social pressures for driving change. It also highlights examples of industry best practice as well as platforms for information sharing, such as the GLAA’s construction forum.
The CIOB is calling for contractors to acknowledge that every supply chain is at risk and collaborate more widely to combat crime. It is launching a Routemap to Fair Business which sets out steps for raising standards for all workers and suppliers, encouraging a new approach to tackling systemic issues.
Independent anti-slavery commissioner Kevin Hyland said: “This new report from the CIOB builds on its previous good work highlighting the issue. It provides clear ways for responsible companies to tackle slavery and ensure their labour supply is protected. I hope to see many construction businesses taking up its recommendations and making real changes, so that it can set an example to other high risk sectors.”