Criminals exploiting workers on major projects
The aggressive business models employed in construction make the sector ripe for exploitation of both British and migrant workers, while "systemic" auditing failures are allowing criminals infiltrate major projects undetected.
Those are some of the key findings of an extensive new Chartered Institute of Building (CIOB) report examining the phenomenon of modern slavery in construction.
The report, entitled Construction and the Modern Slavery Act, tackling exploitation in the UK, comes as the Gangmasters and 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.
Construction is one of the most common sectors for labour exploitation in the UK, according to the NCA.
But the CIOB's report criticised the industry's slow response to the Modern Slavery Act, which was introduced in 2015, and warned that business models employed by the sector were "creating an environment for unethical procurement and recruitment practices".
It added that "systemic" auditing failures were allowing criminals to infiltrate major projects undetected.
The CIOB claimed that problems are set at the top of supply chains with lowest-cost tendering, abuse of the retentions system and late payment pricing out ethical practice.
"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 added.
Despite the fact that major contractors typically have long and fragmented supply chains with little visibility between tiers one and two, and are heavily reliant on migrant labour, the report found examples of complacency and disbelief that major projects were vulnerable to criminal infiltration and human trafficking.
The report highlights:
• How industry is conflating immigration checks with modern slavery checks. The CIOB warned that 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 report also explores the legal, investor and social pressures for driving change and highlights examples of industry best practice as well as platforms for information sharing, such as the GLAA’s construction forum.
Meanwhile, CIOB is calling for a new industry narrative: asking contractors to acknowledge that every supply chain is at risk and to 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 more proactive approach to tackling systemic issues.
The CIOB's latest report follows its 2016 study, Building a Fairer System: Tackling modern slavery in construction supply chains, which investigated the root causes of modern slavery, looking particularly at labour and materials supply – where worker abuses often occur. It also highlighted examples of good practice.
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.
“We need to change the conversation that we have with clients, our peers and the media. Suppliers and labour agencies should be rewarded for finding and reporting problems, contractors need to promote fairer business models and clients need to be more explicit about their ethical expectations. This goes to the heart of professional leadership. We need to empower everyone working in this industry to act, share and collaborate for the greater good.”
Independent anti-slavery commissioner Kevin Hyland added: "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."
Roy McComb, deputy director at the National Crime Agency, said: "Slavery is not a thing of the past. It’s a very real crime that seeks out vulnerable people and exploits them for criminal profit. It affects all types of communities across every part of the United Kingdom.
"Labour-intensive sectors like construction, where temporary and irregular work are common, are high-risk sectors for exploitation. Tackling modern slavery is a priority for UK law enforcement but everyone has a role to play in spotting and reporting this crime.
"We welcome this report and hope that it acts as a reminder to all employers within the construction industry that labour exploitation does exist and they are responsible for ensuring their supply chains are compliant with modern slavery legislation."