Xinjiang province in China supplies around a fifth of global cotton ©  Hasan Esen/Anadolu Agency via Getty Images
Xinjiang province in China supplies around a fifth of global cotton © Hasan Esen/Anadolu Agency via Getty Images

Major firms 'complicit in supply chain forced labour'

MPs have said they are “appalled” that companies “still cannot guarantee their supply chains are free from forced labour”.

In a report the House of Commons Business, Energy and Industrial Strategy (BEIS) Committee said the Modern Slavery Act (MSA) “has no teeth” and its transparency obligations must be strengthened with “tough fines” for non-compliance.

The report, referring to Uighur Muslims in China, said there was “compelling evidence that many major companies in the fashion, retail, media and technology sectors with large footprints in the UK are complicit in the forced labour of Uighurs in Xinjiang”.

The committee said consideration should be given to disqualifying company directors over breaches of the MSA, while the transparency and accessibility of modern slavery statements should be increased. A working group within BEIS should be set up to “tackle the ongoing lack of transparency in supply chains”.

Nusrat Ghani (Con), lead BEIS Committee member for its inquiry into forced labour, said: “It is deeply concerning that companies selling to millions of British customers cannot guarantee that their supply chains are free from forced labour.

“The government must act to strengthen the Modern Slavery Act, introduce a tougher business policy framework, and examine the use of targeted sanctions to ensure every effort is made to stamp out profiteering from these abuses.”

Meanwhile, establishing a garment trade adjudicator would help halt “abusive purchasing practices” in the sector, according to the Environmental Audit Committee (EAC).

Philip Dunne, chairman of the EAC, said purchasing a garment with a ‘Made in the UK’ label was not a “guarantee that the workers who produced it are paid at least the minimum wage, in a workplace which is safe”.

In a letter to the business secretary Kwasi Kwarteng, Dunne highlighted recent controversies over the treatment of garment workers at factories supplying to online retailers such as Boohoo in Leicester, as well as concerns over human rights abuses in Xinjiang. 

Dunne said: “It appears that voluntary corporate social responsibility initiatives have failed to make any significant improvement to pay and working conditions in certain quarters of the fashion industry. Furthermore, high street fashion brands are being consolidated under a small number of online only operations. This enables the groups to concentrate considerable buying power over garment suppliers, similar to the power of supermarkets.”

He added while there was some merit to a ‘fit to trade’ licensing scheme proposed by the British Retail Consortium, “it appears to place responsibility, and cost, solely on suppliers”.

Evidence provided to the EAC by charity Traidcraft Exchange highlighted that purchasing practices “dictate the short manufacturing periods which directly drive overtime, corner-cutting and a high-pressure work environment”.

The role of a garment trade adjudicator would be to “stop the abusive purchasing practices of retailers, and other intermediaries, which directly shape working conditions of workers in their suppliers’ factories”, Dunne said.

Separately, MEPs have passed a resolution to tackle human rights and environmental issues in the supply chains of EU businesses.

The draft legislative initiative, published last month, recommended sanctions for firms for non-compliance, a ban on imports of products linked to forced or child labour, and legal support for victims of corporations in third countries.

Lara Wolters, shadow rapporteur and member of the Progressive Alliance of Socialists and Democrats in Parliament, told MEPs: “The time for voluntary standards is over. Due diligence should be exercised by all companies with risks in their supply chains.”

And the German cabinet has approved a law on due diligence, despite concerns it could put German firms at a disadvantage.

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