Slavery: Breaking the chains

Slavery in construction is an issue some in the industry would prefer not to acknowledge. But it is a very real problem. A new CIOB report lifts the lid on how migrant workers are treated in the construction supply chain – and presents some solutions. James Kenny explains.

For the Euro 2016 tournament now under way in France, most host cities have given their football stadiums a spectacular revamp. There have been no construction controversies. But that isn’t the case with another major football tournament happening in six years’ time: the 2022 World Cup in Qatar.

In March this year, in its report The Ugly Side of the Beautiful Game: Exploitation of migrant workers on a 2022 World Cup site, human rights charity Amnesty International directly accused football’s world governing body Fifa and the Qatari authorities of ongoing indifference towards the systemic abuse and “appalling treatment” of migrant workers working on the venues that will host the competition.

The abuse and ill-treatment of migrant construction workers in some countries is seen as a form of modern slavery. To throw a spotlight on this, the CIOB has produced a new study which includes detailed guidance for construction companies that may – unknowingly – use exploited migrant workers in their supply chains.

The study titled Building a Fairer System: Tackling modern slavery in construction supply chains. The report aims to investigate the root causes of modern slavery, looking particularly at labour and materials supply – where worker abuses often occur. It also highlights examples of good practice.

“Unfortunately, in modern industry, slavery is present in many sectors, whether through mining, raw material production, manufacturing, contracted services or agency supplied labour,” says the study’s author, construction journalist Emma Crates.

“Global trends towards outsourcing and the deepening of complex supply chains make it easier for such abuses to be ignored or remain hidden. And while much media focus and criticism has been directed toward the Arab world, it must be noted that exploitation can be found in many regions, including those that pride themselves on superior human rights records, including Europe and North America.”

Practices that can occur – and are covered in the report – range from unfair contracts, long working hours and awful accommodation right up to restriction of movement, inability to resign and the threat of violence.

South Asian labourers working at a construction site in Doha, Qatar

“The construction industry is particularly susceptible to cases of forced labour as the use of migrant workers has become a key element for many companies, particularly when bidding for or working in large infrastructure projects abroad,” says Crates. “Without attracting skilled and unskilled talent from other regions, many organisations would struggle to complete these building schemes.”

For the workers themselves, there can be a huge benefit financially to securing work on these projects. Many of those employed work abroad as a means of feeding and educating their families – and of climbing out of poverty. 

And, at a national level, the economic importance of exporting labour is huge. Migrant workers from Bangladesh, for example, sent home more than $10bn (£7bn) in 2009 – 12 times greater than the sum the country received in foreign direct investment and six times more than the foreign aid it received that year.

Worker welfare action points

Immediate

• Ensure that money is paid directly into bank accounts.
  
• All staff, including agency workers, should have a written contract.          
  
• Provide a safe storage area for passports and anonymous phone lines for workers to report abuse.       
  
• Pay all recruitment costs. The actual costs of recruitment would be considerably cheaper than those paid by the workers.

Medium term

• Educate staff about modern slavery. Implement tailored training and support for each level of the business.
• Use independent parties to interview labourers. Ensure that the interviews are carried out in confidence, away from the worksite and without the participation of management.
• Build up trust. Many migrant workers may lie about paying recruitment fees because they are desperate not to lose their jobs. Try to be open and do not necessarily believe the first answer that they give on arrival.

Longer term

• Map out your supply chain. Investigate the relationships between agencies and suppliers.          
  
• Encourage the establishment of ethical recruitment agencies. Change contracts to introduce harsher penalties and termination clauses if suppliers do not comply with policy.          
  
• Lobby governments. Argue for investment in more inspectors to enforce compliance of workers’ rights and recognition of the right of workers to organise and join trade unions in countries where it is currently illegal.

But a reasonable question is: with such large numbers of migrant workers being employed, why are they continuing to be exploited?

“The transparency and complexity of the supply chain is usually the cause,” says Crates. “While the top level and first few tiers of a company and its affiliates may be well run and monitored, problems usually arise further down, among subcontractors and other levels of the supply chain.”

She adds: “While any respectable company will tell you they have policies and procedures in place to protect workers, the complexity of the procurement process provides ample opportunity to look away from issues that are too remote, or too embedded, to tackle.”

But now, construction and other industries face not only public pressure but also governmental scrutiny – in the form of the Modern Slavery Act, which became law in March 2015 and applies to all large firms carrying out business in the UK, regardless of where they are registered. 

The Act introduces two main offences: the first relating to slavery, servitude or forced labour, and the second to “human trafficking”, which is defined as arranging or facilitating the travel of another person with a view to that person being exploited, irrespective of whether that person consents to travel.

Stadium under construction in Doha for the 2022 football World Cup

In addition, section 54, also known as the Transparency in Supply Chains (TISC) clause, introduces an obligation on commercial organisations with annual turnover of more than £36m to prepare a “slavery and human trafficking statement” each financial year. This requires them to state the steps, if any, that have been taken to ensure that slavery and human trafficking are not taking place in any of the organisation’s supply chains or in any part of its business.

The construction site may be where exploited workers end up, but it is seldom the place where exploitation starts, Crates asserts. “Although much of the focus of abuse has been in the Gulf region, in order to root out the problem, investigations must start at the beginning where workers are recruited,” she says.

In 2015, 1.7 million migrants were working in Qatar, 90% of the total workforce. Predominantly they came from South Asian countries such as Nepal, a country where, according to a “conservative estimate” from the World Bank in 2010, corruption in foreign employment was running at more than $194.7m (£135.8m) a year.

“In that country, obtaining a foreign worker permit can involve up to six discrete stages of verification and pre-approval,” says Crates. “Each step presents an opportunity to extract a bribe or corrupt payment.”

This is where the controversial “recruitment fee” usually comes in (see box). Workers pay an initial sum to a labour broker or other intermediary, then have their passport retained or find themselves beholden in some other way.

“They become effectively bonded,” says Crates, “and bondage is an indicator of forced labour, regardless of subsequent conditions at the work site.”

The issue of forced labour in the construction supply chain is unlikely to diminish without proper action. But, with the eyes of the world focused on the Qatar 2022 tournament, there is a chance for the construction industry to effect change and do so on a grand scale, and in a spotlight.

“By improving the conditions for workers in Qatar and in preparations for the World Cup, construction can set out a guideline for future large projects,” says Crates. “Construction companies can learn the right way to monitor their supply chains and make sure all their workers, no matter where in the supply chain, are treated humanely and properly.”

Common abuses of migrant workers

Unfair payment practices

• Non-payment or late payment of wages.
• Employers not recognising all the hours worked.
• Illegal deductions.
• Some employers will delay payment for months or even years, leaving the workers literally starving, yet too frightened to complain.

Inappropriate accommodation

• Cramped, unsanitary, crowded conditions, often far from site and requiring long commutes.

Long working hours

• Workers forced to work in unsafe conditions and very long shifts.
• Agents may force them to work on multiple locations taking on more than one job. 

Restriction of movement

• Workers have passports removed and are unable to leave the country or seek alternative work.

Extra charges

• Accommodation is far from food outlets so that workers must pay for expensive canteen food.
• Deductions for food are made from wages, though workers were promised inclusive food and accommodation.

Unfair contracts

• Contracts are not in the labourers’ native language and they do not understand what they are signing. Despite this, the contract may be declared “legal” by employers and the courts.

Threat of violence

• Frequent threats of violence can leave workers fearful and frightened to speak out.

Lack of representation

• Workers are unable to organise or form unions. They have no platform to raise issues with the client or main contractor.

The recruitment fee

The recruitment of workers is where the seeds of slavery are sown. Although big companies use established recruitment agencies in capital cities of countries such as Bangladesh, India, Nepal and the Philippines, they rely heavily on unregistered networks in rural towns and villages, the informal nature of which can lead to corruption and exploitation.

From the beginning, the worker is often misled as to the level of wages that he will be paid. He will be charged a “recruitment fee” that is far higher than the actual costs and could also exceed the legal limit imposed by his government. If the countries have various layers of bureaucracy then it is more likely that the worker will be exploited at each level and be forced to pay.

Often workers will take the job out of desperate economic circumstances. They may sell possessions or get money from a loan shark to pay the fee.

Having paid the agent, the worker is now vulnerable. He may be duped into signing a contract that he does not understand, meaning he is effectively trapped by the system before he has left his home country.

Industries are starting to recognise that recruitment fees are often the core root of the forced labour problem and new initiatives are being launched to combat this.

The Leadership Group for Responsible Recruitment was set up in May this year. Convened by the Institute for Human Rights and Business (IHRB), the aim of this international cross-industry initiative is to eradicate recruitment fees from supply chains within the next decade.

Founding companies, which include Coca-Cola, Hewlett Packard Enterprise, IKEA and Unilever, are promoting the Employer Pays Principle, which specifies that employers, rather than employees, should pay recruitment costs. The group is urging that the principle is embedded within industry codes of conduct and company policies in every sector.

Eradicating illegal recruitment fees from supply chains should be a priority for clients and Tier 1 organisations, says the CIOB report.