REUTERS | Suzanne Plunkett

Modern slavery, bribery and corruption: corporate compliance with legal frameworks

Last week Thomson Reuters hosted a seminar entitled Modern Slavery, Bribery and Corruption: Corporate Compliance with Legal Frameworks which coincided with the publication of two reports on the connection between modern Slavery and corruption from Verité and Liberty Asia.

An eminent panel including Nick Grono, CEO of the Freedom Fund, Dan Viederman, CEO of Verité, Duncan Jepson , CEO of Liberty Asia, Martina Vandenberg, Founder and President of the Human Trafficking Pro Bono Legal Center and Mike Harris from World-Check discussed the findings of these reports and answered questions from a varied audience of in-house, legal and risk officers and academics.

The premise of both of the reports is that bribery facilitates slavery, for example in the identification, transportation and control of people as labour. Local law enforcement agencies, immigration officers and transportation business owners may be bribed to move migrant workers who are then exploited to decrease the bottom line and increase profits.

The panel considered the strength of the MSA and recognised that corporate compliance is largely driven by enforcement. The requirement under section 54 of the MSA does not carry with it a criminal sanction for non-compliance and the offences identified in the MSA are direct offences of commission, not failure to prevent offences. For more information, see Note for the board on offences under the Modern Slavery Act 2015.

Questions were asked of the panel about the effectiveness of Dodd-Frank quarterly reporting requirements and what could be done in the way of reporting that would flag up potential trafficking risks.

The panel suggested that identifying whether particular groups in a particular region have freedom of association (Article 11 rights) is a good first step to identifying whether they have employment rights.

Using the same procedures required to prevent bribery in a company will also assist the company in respect of transparency of supply chains. Martina Vandenberg emphasised the point that this should not be a box ticking exercise, as this kind of superficial engagement often masks the issue and encourages complacency. For more information, see Note for the board on Bribery Act 2010 offences.

Human trafficking is being investigated with increasing frequency and involves a high degree of cross border participation through the mutual legal assistance (MLA) process. The Home Office received 59 MLA requests from overseas in respect of human trafficking in 2015. For more information, see Note for the board on mutual legal assistance.

Since the implementation of the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, quoted companies are required to prepare a separate strategic report alongside the annual directors’ report including disclosures about human rights, gender diversity and greenhouse gas emissions. This may be another opportunity to ensure compliance with transparency in the supply chain. BIS would be the prosecutor for a failure to comply with the strategic report requirement but to date have never received a complaint in relation to it.

The government has committed to extending corporate criminal liability extra-jurisdictionally in respect of failure to prevent tax offences. It may be important to consider extending the failure to prevent offences to include slavery, health and safety offences and corporate manslaughter to ensure that a company has an ethical supply chain and that companies do not engage in exploitation in order to improve profits.

Practical Law Morag Rea

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