What are cookies?
Cookies are small pieces of information that are stored on your hard drive to allow the British Institute of International and Comparative Law to recognise you when you visit. They can remember your preferences by gathering and storing information. They do not identify you as an individual user, just the computer used. Cookies cannot be used to run programs or create viruses on your computer. Cookies do not give the British Institute of International and Comparative Law access to your computer.
What types of essential cookies does BIICL use?
We may use cookies to store information about your membership on our site, or to enable you to log in to online resources. This might include registering for our events, making online purchases or accessing member-only content. The information is stored, as cookies, to enable you to use these resources, and to remember your log in details between sessions. If you clear your cookies, you may need to login to these parts of the website each time you visit.
We also use some third party cookies to help us improve your user experience.
If you don't want to receive cookies.
If you would prefer not to receive cookies while browsing our site, you can set your browser so that it will not download cookies onto your computer. Doing so will still allow you to navigate through the majority of our site but possibly not all of it. If you wish to access the password protected areas of our website you will need to allow "per-session" cookies. These are temporarily used while you are visiting the site but deleted when you close your browser or log out.
Supplying governments amidst modern slavery provisions in public procurement
Dr Sofia Gonzalez De Aguinaga
This is an accompanying piece to a Modern Slavery and Human Rights Policy and Evidence Center (Modern Slavery PEC) Policy Brief on the Effectiveness of public procurement measures in addressing modern slavery. The Modern Slavery PEC is led by the Bingham Center and Dr Sofia Gonzalez de Aguinaga is one of the authors of the Brief. Here she discusses the impact of public procurement modern slavery measures on business.
Businesses are increasingly facing regulations to tackle modern slavery in their supply chains. This year the EU commission published a proposal for a Directive on Corporate Sustainability due diligence and more recently a proposal to ban the import of products made with forced labour into the EU. Governments too, as significant buyers of goods, services and works from the private sector, are using their leverage to prevent and address human trafficking in global supply chains through public procurement measures.
Many countries around the world, including the UK, have introduced modern slavery provisions across the procurement cycle into their procurement laws and policies. This means that businesses aiming to supply governments would need to comply with these public procurement measures. In particular, businesses operating in high-risk sectors, as identified by each country, such as ICT, apparel & textiles, health supplies and construction.
Based on a new analysis of existing evidence, this blog discusses the impacts on businesses of public procurement modern slavery measures and of their interaction with existing Mandatory Human Rights and Environmental Due Diligence (mHREDD) and Transparency in Supply Chains (TISC) legislation.
Six ways in which public procurement modern slavery measures can impact businesses:
In Germany, between 2013 and 2015, and following inspections, the authorities in Bremen imposed penalties for non-compliance with labour clauses to several suppliers including exclusion from public tenders for a period of 6 to 15 months (Jaehrling et al. 2018)
To be eligible to supply rubber gloves to the Region Stockholm, suppliers are requested to report on migrant workers in factories and to disclose policies related to forced labour and no recruitment fees (The Danish Institute for Human Rights, 2020)
In Finland, the national-level central purchasing body Hansel, gives points to suppliers that pay a living wage and that limit total working hours, including overtime, to no more than 48 hours per week on average (OECD, 2020).
In Norway, the municipality of Skien has established a set of collective contractual requirements applicable to 'high-risk' sectors, such as construction, called the Skien Model, which establishes a maximum of one level of subcontracting under the main supplier to promote decent work and labour rights (European Commission, 2020).
In some cases, contract clauses apply beyond Tier 1 suppliers.
In Denmark, Copenhagen has implemented and monitored contract performance clauses focused on fair pay and labour conditions in all service and construction public contracts for contractors and subcontractors (European Commission, 2020) introducing chain liability clauses (Jaehrling et al. 2018).
In the Netherlands, if a supplier does not comply with social conditions in the contract, including modern slavery, fines can be imposed. If, after notice of default, the contractor still does not comply with social conditions in the contract, the agreement can be terminated.
Implications of legislative interactions for businesses:
• According to the European Commission, when a company that is bidding for a public contract falls within the French or Dutch mHREDD laws but has not complied with its due diligence obligations, it can be excluded from public procurement by EU law.
• In Germany, companies fined for more than €175,000 for non-compliance with the German Due Diligence Act, once the enforcement mechanism comes into force in 2023, could be subject to exclusion from public procurement.
• In Austria, a proposed Supply Chain Law would introduce penalties and sanctions to companies for violations of human rights due diligence obligations including exclusion from public procurement processes for up to 3 years.
• In the UK, a business can be excluded, at the discretion of public buyers, from bidding for a public contract if, whilst falling under the TISC regulations of the Modern Slavery Act 2015 has not submitted a modern slavery statement.
• In Western Australia, suppliers can be prevented from seeking or being awarded public contracts for up to 2 years for non-compliance with the reporting requirements of the Modern Slavery Act 2018.
As discussed, modern slavery public procurement measures have important implications for businesses that aim to supply to governments across the world. To comply with these, businesses need to be able to disclose data on specific modern slavery risks or working conditions and show evidence of the measures they have taken to address modern slavery in their business and supply chains. This might be more difficult for SMEs to achieve as they often face resource constraints, putting them at a disadvantage vis-à-vis large businesses to participate and win a public tender. Finally, if businesses want to supply to governments, they have to comply with their human rights due diligence and transparency legal obligations
Related Comments
Accelerating Change: The Potential of Capital Market Actors in Addressing Modern Slavery — Recommendations for Business
Sofia Gonzalez De Aguinaga | 8th December 2023
Read More
Restricting Foreign Direct Investment: the Rule of Law argument
Anthony Wenton | 18th June 2019
Read More
Zuckerberg is right: Third-party standards must govern online speech
Ulysses Smith | 6th April 2019
Read More
Related News
Weekly Update 01 July 2022
1st July 2022
Read More