Modern Slavery - Closer Than You Think?

January 2016 saw what has been reported as the first conviction of a UK-based business owner for a human trafficking offence. The case demonstrates the growing appetite to clamp down on such abuses, and serves as a timely reminder that modern slavery issues occur not just in the developing world, but also much closer to home.  It also further emphasises the importance of effective supply chain monitoring for global businesses.

In January 2016, Mohammed Rafiq, owner of the UK bed-making business Kozee Sleep, was convicted of conspiracy to traffic by Leeds Crown Court.  In February, he was sentenced to 27 months in prison.  Rafiq’s conviction followed that of two Hungarian gangmasters who were found guilty of supplying the UK factories run by Kozee Sleep and its subsidiary Layzee Sleep with slave labour.  The gangmasters promised Hungarian nationals good wages and housing if they travelled to the UK.  Instead, the workers were detained in overcrowded, squalid conditions, without freedom to travel and forced to work 10 to 16 hours a day, often for up to seven days a week and for less than £2 a day.  The court concluded that Rafiq had knowingly employed these trafficked men and "went along with their exploitation as a slave workforce."  

Unfortunately, this is not an isolated incident in the UK.  In the wake of the Rafiq case, the Anti-Slavery Commissioner promised that there will be "many more" convictions to come.  There has also been an upturn in slavery-related civil claims in the UK, with a group of Lithuanian workers suing Kent-based “Happy Egg” producer DJ Houghton and its directors for forcing them to work as chicken catchers in inhuman and degrading conditions

These two cases provide a cautionary tale for global businesses.  The trafficked Lithuanians worked within supply chains for several major supermarkets.  Similarly, Kozee Sleep was a significant supplier of leading British high-street retailers.  Despite the fact that Kozee Sleep was contractually obliged to adhere to each of these company’s policies on ethnical trading, and that each of these companies had recently undertaken some form of ethical supply chain audit, it appears none of them succeeded in detecting any issues, or took any steps to address them.

With the introduction of the Modern Slavery Act 2015, increasingly close attention will be paid to the efforts made by global businesses in this regard, and they will need to carefully review existing policies and procedures worldwide to ensure they are adequate.

Join Freshfields and the UN Global Compact on 19 April 2016 for an in-depth webinar on the implications of the Modern Slavery Act for global business and how effective compliance can be achieved. Register here.