Modern Slavery Bill: transforming construction CSR and supply chain management.

No responsible organisation in construction would want any association with modern day construction slavery, forced employment, child or migrant exploitation as we read increasingly often in the mainstream news, for example Qatar construction or closer to home with construction gangmaster organisations. Hence the Modern Slavery Bill should be welcomed by the built environment sector.

Included within the Modern Slavery Bill introduced on 31 August 2015 (coming into affect on 31 October 2015) is a clause that has significance for most construction organisations – the Transparency in Supply Chains (TISC) clause.

We have introduced a transparency in supply chains clause to the Modern Slavery Bill. This will require businesses above a certain size threshold to disclose each year what they have done to ensure that there is no modern slavery in their supply chains and own business. This will be a truly world-leading measure. There are similar transparency requirements in California, but they only apply to businesses producing goods for sale, whereas this disclosure will apply regardless of what it supplies, whether goods or services.
Minister for Modern Slavery and Organised Crime, Karen Bradley

What does the Bill and Transparency Clause mean for construction:

Chris Blythe, CE CIOB in Foreword to the CIOB Dark Side of Construction publication: The dark side – the systematic exploitation of millions of vulnerable migrants – is rarely acknowledged, even by the clients and multinationals that commission and create our shiny new cities. Our sector is rife with human rights abuses. Bonded labour, delayed wages, abysmal working and living conditions, withholding of passports and limitations of movement are all forms of modern slavery.

The scope of the TISC clause will cover construction products companies importing goods or components to the UK, as well as contractors and consultancies operating in the home markets and/or overseas.

The Modern Slavery Bill (with its Transparency in Supply Chains clause) will transform and elevate construction CSR and Supply Chain Management as important legislative responsibility processes.

Organisations with a turnover of £36 million will have to:

  • publish a “slavery and human trafficking statement” setting out the steps it has taken to ensure that slavery and human trafficking is not taking place in its supply chains and within its own business.
  • From October 2016, to publicly share their policies and strategies to tackle modern slavery in their supply chains.

Guidance on what might be included in such a statement:

  • Companies’ due diligence processes relating to slavery and human trafficking in their supply chains;
  • Reporting on the parts of companies’ supply chains where there is a risk of slavery and trafficking taking place, and how to assess and manage such a risk;
  • Reporting on staff training on slavery and human trafficking;
  • Reporting on companies’ effectiveness in ensuring that slavery and trafficking are not taking place in their businesses or supply chains.

“Implications of non-compliance with this reporting obligation in such a morally compelling context could leave a large dent in an otherwise sterling company reputation” Victoria Ball, projects & construction associate at law firm Trowers & Hamlins

“It will involve a deep dive into the supply chain to understand what’s really going on many tiers down – getting visibility of the many layers to truly see the conditions of workers at the bottom of the chain. The message to companies is clear – it is no longer an option to stay below the radar, refuse to take responsibility for problems in your supply chain and hope you won’t get exposed.”Cindy Berman, head of knowledge & learning ETI

What is not so clear is where the responsibility under the Bill rests for SME’s below the threshold that have organisations above the threshold within their supply chains. Most construction organisations procuring goods and services from large product distributors or manufacturers.

Actions construction and built environment organisations should take?

  • Embed Modern Slavery into CSR policies and statements, where, arguably there should be a statement anyway if base on a recognised CSR structures(eg ISO 26001, Global Reporting Initiative (GRI), JUST, Global Compact or the Human Rights Charter)
  • Understand the concept of Transparency in Supply Chains (TISC)
  • Include questions statements in supplier procurement processes. (And probably best to do so for all suppliers who are close to or over the threshold)
  • Develop a PQQ and Project Bid standard text.
  • Understand what an annual“slavery and human trafficking statement” for your organisation could look like

And of course, these good practices should be adopted even if below the £36million turnover threshold as a matter of social responsible construction.

Sources:

Related iSite blogs:

JUST: a social justice label for construction …

Constructing CSR iTransparency 

Understanding CSR in Construction

Future ISO14001 revisions to include supply chain and CSR?

ISO 14001, the international environmental management system standard, is shortly to undergo its second revision. The revised standard, which is expected to be published in 2015, will operate into the mid-2020s

The EMAS Helpdesk on behalf the European Commission’s Sustainable Production and Consumption Unit has launched a  survey, requesting input on relationship of EMAS to 14001, the results of which will be fed into the official ISO 14001 revision process. 

Of particular interest, hinting at 14001 changes are

Should  ISO 14001 …

2.1.7. …place greater emphasis on the management of environmental impacts across the entire life cycle / supply chain of products / services provided and used?

2.18 …seek to position environmental management in the context of sustainable development (e.g. ISO 26000, sustainability reporting)?

The online survey can be found here 

Half of Multinationals to Choose Suppliers Based on CO2 Emissions

Why monitor construction carbons:  Shortly after writing a comment to a linkedin group on the importance of measuring and understanding construction carbons, through tools such as ConstructCO2, indications of increased focus on carbon performance popped up in a tweet (via Julie Urlaub @TaigaCompany ) regarding an Environmental Leader post that referenced Carbon Trust Report: Half of Multinationals to Choose Suppliers Based on CO2 Emissions 

According to the study, a full half of multinational companies plan to select suppliers based on carbon performance, and that 29% of suppliers are likely to lose their places on green supply chains if they do not have adequate performance records on carbon.

In the U.K., 56% of multinationals said that in the future they expect to drop suppliers based upon low carbon performance, with 74% of the U.K. respondents quoting shareholder pressure as a key driver for them in tackling carbon emissions.

And, although the report has a focus on multinationals, it is not irrelevant to the built environment

Next month Marshalls Plc, a supplier of hard landscaping, will be hosting a United Nations Global Compact Supplier event to educate first-tier suppliers on its approach to environmental issues.

As I posted to the Think Zero group on Linkedin, I still have to hear a good reason why we should not be measuring construction carbons.  Are you tracking your carbon performance – do you have the evidence?

Read more: Carbon performance offers major risk or reward

on learning from eco-challenges …

What can we learn from the fact that bidders are pulling out of the next carbon-challenge project at Peterborough? (Shortlisted bidders flee from EP flagship project)

Could it be English Partnerships are using a traditional, cost based procurement route? Even with PQQ and other ability or capability ‘gates’ selection may still be based on cost. This could lead to the all too familiar high price of low cost syndrome, but as long as cost remains the main selection paradigm we are not going to think differently about sustainability, carbon zero, social responsibility and all things green.

What an opportunity we are missing. Eco challenge projects must do the same for our industry as Building Down Barriers did for partnering, collaboration and supply chain management a decade or so ago.

Why cannot the builders, designers and others be selected on improvement criteria (- ability and solutions in reducing carbons to zero, in design and in the construction process) and of improvement in cost – yes reducing cost at the same time through waste and improvement initiatives.

The oft quoted 30% waste (time, materials, energy, value, effort) in construction could more than pay for carbon zero and sustainability improvements.

We have a fantastic opportunity to demonstrate and to learn that we can get close to zero carbon, level 6 and all that without adding costs to the overall project – if combined with basic and proven improvement approaches.

The alternative? continue with business as usual from a construction perspective, with the exception of integrating some natty designs and product solutions, and continue to moan about the costs …