‘Global Britain’ encapsulates broad principles and aspirations for the UK’s continued influence in the world. The Prime Minister, in his preface to Global Britain in a Competitive Age (often referred to as the Integrated Review), said: “The creation of the Foreign, Commonwealth and Development Office is the springboard for all our international efforts, integrating diplomacy and development to achieve greater impact and address the links between climate change and extreme poverty.”[1]

 

A growing criticism of ‘Global Britain’ is that the aspirations, in a number of areas, are not backed up by a credible and coherent plan for implementation. Fragile states, and the precarious human rights of their citizens, are, regrettably, no exception to this criticism. The UK Government’s approach to the impact of UK business on conflict and rights in precarious societies relies heavily on the belief of a benign invisible hand of the market, and an appeal to voluntarism -‘do the right thing’ – from both responsible and unscrupulous companies. But high-risk fragile states tend to attract those looking for big rewards at any cost, even fuelling conflict and gaining cheap, pliant communities or labour through collusion with state silencing of human rights defenders.

 

Fragile states often present opportunities for high return on investment to key sectors of UK business, but also risks. And from the flip side, UK investment can create new jobs for the people of fragile states but also threats to their livelihoods, labour rights and land rights. The outcomes for people’s dignities and freedoms depend greatly on the intentions and approach of the UK company, the willingness of the national government to act as a fair interlocutor between the company and communities and, and the UK Government’s own commitments to uphold responsible investment and business practice.

 

Globalisation, and the digitalisation of the UK economy, has transformed UK business and its global supply chains. These have become truly global, intensely complex, with short-lived supplier contracts that pass risk and cost down to the poorest and most vulnerable – often women and migrant workers in factories and farms. The pandemic has exposed fragilities in these supply chains, and has exacerbated inequalities of power and wealth in the extended supply chains that characterise many UK business interests in fragile states. The Business and Human Rights Resource Centre is still supporting apparel workers across Asia to gain their unpaid wages for the clothes they manufactured for UK fashion brands in the first phase of the pandemic.

 

Abuse is far more prevalent in fragile states, with low governance capacities. The Business and Human Rights Resource Centre’s monitoring of abuse by global business from 2015 to July 2021 witnessed 3,303 allegations, of which over half, 1,859, were in the 32 fragile states, plus the Philippines, Colombia and Brazil.

 

This article seeks draw out some lessons from the Business and Human Rights Resource Centre’s global monitoring and database of human rights in business, focusing on key areas where UK business can play a key role either in building resilience, or exacerbating fragility and risk for communities and workers.

 

From corporate voluntarism to smart regulation and incentives

UK multinationals span the world, and many have links with fragile states. Like most of Europe and North America, the UK Government, for decades, has had a hands-off approach, relying on market forces, voluntary action, and some ‘nudge’ politics to promote responsible business conduct, even in fragile states. But the mood has shifted in the US and Europe recently regarding business incentives and regulation, and the UK risks being left behind. Increasingly the abuse of workers and communities in fragile states with poor governance, and the trafficking of workers from these states to forced labour in fields and factories in global supply chains, are no longer tolerable. The US is debating new regulatory standards and the Customs and Border Patrol have aggressively banned imports of goods suspected of being produced with forced labour. While the EU, and member states, have legislative initiatives to demand companies identify and prevent human rights risks in their operations and supply chains – a move that has special relevance to fragile states where much abuse by unscrupulous business occurs, often in collusion with the state.

 

Global Britain has some legal strengths to build on, including the Foreign Corrupt Practices Act, and UK Supreme Court judgements. There is an increasing trend of victims of corporate abuse bringing civil claims against UK companies for harm caused by their overseas subsidiaries. Recent decisions indicate UK courts willingness to accept jurisdiction in some cases. Critically for abuse in fragile states, foreign claimants’ inability to obtain sustainable justice in their home country, through lack of resources, for instance, will be taken into consideration by the UK courts when assessing jurisdiction. The UK Supreme Court’s landmark judgment in Vedanta Resources Plc and Konkola Copper Mines Plc v Lungowe and Ors held that a UK parent company does, under certain conditions, owe a duty of care to people and communities (in this case, Zambian villagers) affected by its overseas subsidiary’s operations and could be held liable for harm.[2] In this case, the Supreme Court affirmed the UK courts’ jurisdiction partly because there was a real issue to be tried and partly because “there was a real risk that the claimants would not obtain substantial justice in the Zambian jurisdiction”.

 

Another positive development is the UK Supreme Court’s 2021 judgement in Okpabi v Shell (concerning alleged oil pollution and damages in Nigeria).[3] The court cautioned against striking out a claim against a parent company at the jurisdiction stage (given the challenges claimants have in accessing evidence). This case will proceed to trial. This should make it easier for foreign claimants alleging parent company liability to have access to UK courts. Royal Dutch Shell is incorporated in the UK as a public limited company, with total assets of 379.3 billion USD in 2020. Shell has been operating in Nigeria since the late 1950s. The legacy the company has left in the country includes distrust and violence, environmental harm, and little to no economic development for many communities surrounding their projects. Allegations against Shell have ranged from exacerbating tribal conflict, complicity in unlawful arrests, and major pollution events.[4] In 2021, Shell was made to pay $45.7 billion naira ($111 million USD) in compensation from an oil spill from a ruptured pipeline in 1970.[5]

 

It is too early to assess whether increasing access to courts in the UK will actually translate into enhanced access to justice and remedy for victims of corporate abuse. To date there have been no court rulings on the merits. For example, Vedanta settled out of court in January 2021, two years after the UK Supreme Court affirmed the UK courts had jurisdiction; without admission of liability.[6] Nonetheless, this is a promising development. We can expect additional claims will be brought in UK courts going forward.

 

Transition minerals for clean energy futures

A number of fragile states hold key mineral wealth that is strategic to the world’s transition to clean energy. Minerals such as cobalt, copper, lithium, manganese, nickel and zinc are central to success. The International Energy Agency (IEA) forecasts a six-fold increase in production of transition minerals by 2030, for lithium it is 40-fold. Prices and production are already surging.[7] Most are concentrated in only a few states, many of which are fragile – Democratic Republic of the Congo (cobalt), Indonesia and the Philippines (nickel), and Bolivia (lithium). And even within these states, the minerals are often concentrated in the last territories of indigenous people whose nations’ existence is intimately linked to the land. Chinese mining companies prevail and are investing heavily, and the UK is being urged to build its stake in these geopolitically strategic minerals as competition heats up for future access. The quality of UK investment will be critical to the people and communities that should also benefit from this boom.

 

At the Resource Centre we monitor threats and attacks on Human Rights Defenders, a powerful litmus test of fragility. Unsurprisingly, over a third are linked to the extractive sector. Our survey of human rights abuse in transition mineral extraction reveals a similarly concerning picture: more than 300 serious allegations against 115 transition mineral mining companies, ranging from violence, to violation of indigenous land rights, water pollution, health threats, corruption, and a systemic failure to consult local communities.[8]

 

Irresponsible investments are driving conflict and polarisation. For instance, water-intensive lithium mining in the arid lithium triangle of Chile, Bolivia, Argentina and Chile, the world’s driest environment, has triggered a wave of protests and legal battles over water rights, pitching indigenous communities against multinational mining companies. Nickel production in Indonesia is driving battles over water pollution. Cobalt mining in the DRC is linked to allegations of child labour, large-scale corruption, and the funding of armed groups.

 

The UK Government cannot rely on voluntarism to prevent abuse. Codes such as the Voluntary Principles for Security and Human Rights encourage leading companies, but unscrupulous companies are, too often, immune to their influence. HMG should use the leadership it gained from COP26 to help build a multilateral commitment to demand companies identify and prevent risks through mandatory human rights and environmental due diligence, building on the example of the Foreign Corrupt Practices Act. With the US Securities and Exchange Commission and the European Union considering similar legislative initiatives, this could be low-hanging fruit if China can be persuaded to collaborate. The alternative is ballooning protest, legal challenge and loss of investor confidence, which together will act as a critical brake on projects and the fast transition.

 

UK Modern Slavery Act and fragile states

The conditions of fragile states create desperate people. Often facing poverty and repression, people seek routes to a better future elsewhere. Human traffickers, know these souls are a lucrative income source, and adopt strategies to funnel desperate people into conditions of forced labour.

 

In 2015, the UK Government established the landmark Modern Slavery Act. Its aim was to encourage global business to eradicate modern slavery. It deployed ‘nudge politics’ and voluntarism to shift companies to action on modern slavery. Section 54 requires companies to publish a statement of the steps they have “taken during the financial year to ensure that slavery and human trafficking is not taking place” in its operations or supply chains.[9] The intention was to create a ‘race to the top’ by encouraging businesses to declare their efforts to tackle modern slavery risks, and so increase competition to drive up standards for appropriate and effective response to modern slavery. There is no doubt that the Modern Slavery Act raised the profile of this issue of forced labour in many countries, but has it had an effect on UK companies’ actions to eliminate this scourge from their supply chains?

 

Business & Human Rights Resource Centre (BHRRC) hosted the only public repository of statements – the Modern Slavery Registry – for the first six years, to 2021.[10] We assessed compliance of over 16,000 modern slavery statements of some of the largest global companies over the past five years.[11] Unfortunately, the overwhelming evidence is that the approach of the UK Modern Slavery Act has failed in its stated intentions. The provisions of the UK Act itself, based on a requirement to submit a trifling level of reporting which was not monitored or enforced, has failed to drive systemic corporate action to expunge forced labour, even in high-risk sectors. The Act has raised awareness of the prevalence of modern slavery and encouraged a cluster of leading companies and investors to do more. But ultimately, our analysis reveals no significant improvements in the vast majority of companies’ policies, practice or performance.

 

Despite six years of persistent non-compliance with the minimal demands of the Act by two in five (40 per cent) of companies, not one injunction or administrative penalty (such as exclusion from lucrative public procurement contracts) was applied to a company for failing to report. This stands in stark contrast to more robust approaches, such as the Section 307 of the Tariff Act in the US where goods suspected of being produced with forced labour have been banned from being imported. This has led to rapid and multi-million dollar repayment of recruitment fees to workers in conditions of forced labour by suppliers desperate to enter the lucrative US market.[12]

 

Critically, the Act has failed to drive systemic improvement in corporate practice to eliminate modern slavery because it does not place any legally binding standards on companies to undertake efforts to effectively address risks of labour exploitation in their business operations. In fact, the Act explicitly states a company may publish a statement that says it has taken no steps to address modern slavery risks during the financial year and still be compliant with the law. The inadequacy of the Act to protect the estimated 25 million victims of forced labour around the world has been highlighted during the COVID-19 pandemic, which has further increased the risk to workers of forced labour. The pandemic has demonstrated how systemic the causes of labour exploitation are, especially in fragile states, and the urgent need for legally binding obligations on companies – properly enforced – that go beyond weak reporting requirements.

 

Transparency is a necessary, but insufficient condition for systemic corporate change, even for the worst forms of labour abuse. Three policy shifts would more effectively tackle modern slavery in UK companies and their supply chains:

1. A new piece of legislation to impose legal liability on all companies in all sectors for a failure to prevent human rights abuses in their businesses;
2. The introduction of import bans for goods suspected of being produced with forced labour; and
3. The application of these laws to public procurement.

 

Migrants, forced labour and the UK’s global hotel brands

Fragile states such as Nepal and Ethiopia also seek to augment their slim GDP through the export of migrant labour around the world. Remittances can become an important source of support to impoverished communities and regions where migration by recruitment agencies is better regulated and the employers abide by good labour law. But too often unscrupulous agents charge extortionate fees for the job and travel, leading to debt bondage, and employers and franchises tolerate abuse to provide cheap and pliant labour. Insights on the toleration of forced labour in UK business’s supply chains are highlighted in our survey of international hotel brands gearing up in Qatar for the World Cup 2022. To manage the expected influx of players, supporters and the media, the Gulf state has seen exponential growth of the hotel industry, with an additional 26,000 hotel rooms brought on stream in time for the World Cup. Yet our research shows hotel brands have failed to take necessary action to protect migrant workers, who suffer serious abuses including: extortionate recruitment fees, discrimination, and being trapped in a job through fear of reprisal and intimidation. These occur despite ‘landmark’ labour reforms which promised to end the Kafala system – a fixed term sponsorship which leaves workers wholly dependent on one employer, no matter their treatment, and unable to change jobs.

 

The Business & Human Rights Resource Centre invited 19 hotel companies, three of them British (IHG, Whitbread, and Millennium and Copthorne), representing more than 100 global brands with over 80 properties across Qatar, to participate in a second survey on their approach to safeguarding migrant workers’ rights in the country. Our survey revealed a widespread lack of action by hotel brands to prevent and exclude forced labour.[13] This reinforced the stream of stories from workers about abuse taking place in hotels, but the survey also highlighted a cluster of companies who have shown greater leadership. IHG Hotels & Resorts is the highest ranked company, whereas Millennium and Copthorne did not respond and were ranked ‘no stars’ due to lack of relevant information on their site.

 

Our interviews with hotel workers revealed a shocking contrast between many hotels’ public policy commitments and their practical application or enforcement. This was particularly evident in recruitment processes, where eight out of 18 workers reported being charged high fees for jobs (the precursor to forced labour) despite the fact that only IHG provided transparent figures for the number of workers it identified had paid such fees. The interviews revealed discrimination in position and pay based on nationality and far worse treatment of subcontracted workers. Most alarmingly, almost all workers reported being scared to request to change jobs when they saw a better opportunity, with some fearful the hotels would report them to the authorities and subsequently have them deported.

 

Much of this points to conditions of ‘forced labour’ as defined by the International Labour Organisation (ILO). Unfortunately, the responses by brands revealed none conducted worker-centric monitoring of the conditions of subcontracted workers despite this vulnerable group often working long-term for the hotel brand. Huge profits are set to be made by the multinational and national hotel brands which will host these visitors. Meanwhile, migrant workers from fragile states in East Africa, South Asia and South-East Asia, trapped in exploitative contracts and paying back hefty recruitment debts, will serve these visitors. The good news is that the World Players Union, leading footballers, and some national football federations are demanding fair treatment in the luxury hotels, before they make their booking.

 

Fragile states and the pandemic

The pandemic is hitting many fragile and poor states hard. Low income countries had a two per cent vaccination rate on the September 9^th 2021, compared to 65 per cent for high income countries. The further economic disruption and social challenges that the pandemic generates are exaggerated further in fragile states by the precariousness of people’s lives and their lack of savings to cope with shocks. The after-effects are likely to last at least a decade as people try to recover from their loss of earnings, as well as friends and family.

 

Global Britain could be doing far more than it is to ensure its own contracts with the businesses manufacturing the viruses. The UK has enough vaccine to jab everyone five times over, and we are about to give the general population boosters, while countries such as Ethiopia, Afghanistan, Liberia, Sierra Leone, and Mozambique, have vaccinated a fraction of their populations with one dose.

 

Equally, the G7 Summit this year, chaired by the UK, was a golden opportunity to put in place a rich-country financing plan for developing countries. Yet the chance was allowed to slip away, with tragic human consequences for fragile states, and potentially for the UK too. The pandemic highlights our interconnected world. As Mamta Murthi, the World Bank’s Vice President for Human Development, has warned: “The situation that we see right now is absolutely unacceptable, because a large part of the world remains unvaccinated and this is a danger for all of us.”[14]

 

To meet the international targets, we need to move beyond intermittent vaccine donations to fragile and poor states to large-scale, coordinated dose-sharing. As Kevin Watkins has argued: “The EU, the United Kingdom, and the US should immediately share an additional 250 million doses – less than one-quarter of their collective surplus – through COVAX…. with a clear schedule for providing an additional one billion doses by early 2022.[15]

 

Conclusion

‘Global Britain’ aspires to embrace the UK’s fundamental values of fairness, care for the vulnerable, and promotion of peace and democracy. It has the potential to make this come alive in our relations with fragile states, including through the actions of responsible business. Nevertheless, the Foreign Commonwealth and Development Office has a huge challenge to work across government departments to build a coherent and credible plan to realise the vision through trade and investment; business regulations and incentives, including UK tax havens; and vaccination policy. Currently the approach to fragile states appears to suffer from the same high rhetoric and low implementation that may undermine public trust in both the UK and in fragile states.

 

The UK could begin to demonstrate greater leadership immediately through some bold feasible actions:

1. Modern Slavery Act: Strengthen the modern slavery act by catching up with Australia and the US with:
   • Obligations to report on mitigation measures and enforcement of transparency;
   • Legal liability if these are inadequate and facilitate forced labour in supply chains; and
   • The introduction of import bans for goods suspected of being produced with forced labour

 

2. Human rights due diligence: Adapt the landmark Foreign Corrupt Practices Act, and the EU’s Sustainable Corporate Governance legislation, to develop a legal obligation on companies to demonstrate they have identified salient human rights risks for workers and communities in their operations and supply chains, and taken proper measures to eliminate these risks.

 

3. Revision of UK Government’s business incentives: Limit public procurement contracts and export credit guarantees to companies that both declare and report alignment with key business and human rights law; from the ILO convention on forced labour to the late John Ruggie’s UN Guiding Principles for Business and Human Rights.

 

4. Just transition to clean energy: In the aftermath of COP26, seek multilateral agreements with US, China, and EU to adopt minimum standards of corporate respect for human rights across the clean energy supply chain, and especially for fragile states.

 

Phil Bloomer became Executive Director of Business & Human Rights Resource Centre in September 2013. Based at the Centre’s London headquarters, Phil is responsible for leading the global organisation, delivering the mission and strategic priorities, and ensuring effective management of programme, personnel, finance, and administration. Prior to joining the Resource Centre Phil was Director of Campaigns and Policy at Oxfam GB, where he was responsible for a team of 170 staff working across policy, advocacy, programme and campaigns. His team’s priorities were food justice, humanitarian protection and assistance in conflict zones, and the provision of essential health and education for all. Previously he was head of Oxfam International’s Make Trade Fair, and Access to Medicines campaigns. Prior to joining Oxfam, Phil spent 11 years in Latin America and worked on human rights dimensions of business, including in food security, resource extraction; mega-projects; and business relations with public and private security in repressive environments.

 

[1] HM Government, Global Britain in a competitive age: The Integrated Review of Security, Defence, Development and Foreign Policy, March 2021, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/975077/Global_Britain_in_a_Competitive_Age-_the_Integrated_Review_of_Security__Defence__Development_and_Foreign_Policy.pdf

[2] The Supreme Court, Judgement – Vedenta Resources PLC and another (Appellants) v Lungowe and others (Respondents), April 2019, https://www.supremecourt.uk/cases/docs/uksc-2017-0185-judgment.pdf

[3] The Supreme Court, Judgement – Okpabi and others (Appellants) v Royal Dutch Shell Plc and another (Respondents), February 2021, https://www.supremecourt.uk/cases/docs/uksc-2018-0068-judgment.pdf

[4] Onome Amawhe, Long-Dead Oilfield In Nigeria Still Sows Conflict Between Shell and Communities That Watched It Grow, Forbes, November 2021, https://www.forbes.com/sites/zengernews/2021/11/02/long-dead-oilfield-in-nigeria-still-sows-conflict-between-shell-and-communities-that-watched-it-grow/; Amnesty International, On Trial: Shell in Nigeria, February 2020, https://www.amnesty.de/sites/default/files/2020-02/Amnesty-Bericht-Nigeria-Shell-on-trial-Februar-2020-ENG.pdf

[5] William Clowes, Shell to Pay $111 Million to Resolve Long-Running Oil-Spill Dispute in Nigeria, Insurance Journal, August 2021, https://www.insurancejournal.com/news/international/2021/08/17/627485.htm

[6] Leigh Day, Vedanta & Konkola Copper Mines settle UK lawsuit brought by Zambian villagers for alleged pollution from mining activities, Business & Human Rights Resource Centre, January 2021, https://www.business-humanrights.org/en/latest-news/vedanta-konkola-copper-mines-settle-uk-lawsuit-brought-by-zambian-villagers-for-alleged-pollution-from-mining-activities/

[7] International Energy Agency, World Energy Outlook Special Report, The Role of Critical Minerals in Clean Energy Transitions, May 2021, https://iea.blob.core.windows.net/assets/24d5dfbb-a77a-4647-abcc-667867207f74/TheRoleofCriticalMineralsinCleanEnergyTransitions.pdf

[8] Transition Minerals Tracker, see: https://trackers.business-humanrights.org/transition-minerals/

[9] UK Public General Acts, Modern Slavery Act 2015 – Part 6 Section 54, https://www.legislation.gov.uk/ukpga/2015/30/section/54/enacted

[10] Business & Human Rights Resource Centre, Modern Slavery Statements, https://www.business-humanrights.org/en/from-us/modern-slavery-statements/

[11] Business & Human Rights Resource Centre, Modern Slavery Statements, Briefing & Analysis Reporting, https://www.business-humanrights.org/en/from-us/modern-slavery-statements/briefings-analysis-of-reporting/

[12] Congressional Research Service, Section 307 and Imports Produced by Forced Labor, Updated May 20 2021, https://crsreports.congress.gov/product/pdf/IF/IF11360#:~:text=Section%20307%20of%20the%20Tariff,(CBP)%20enforces%20the%20prohibition

[13] Business & Human Rights Resource Centre, Luxury hotels check out over migrant worker abuses in Qatar, July 2021, https://www.business-humanrights.org/en/from-us/media-centre/press-release-luxury-hotels-check-out-over-migrant-worker-abuses-in-qatar/

[14] World Bank Group, The Development Podcast, ‘Absolutely Unacceptable’ Vaccination Rates in Developing Countries, Episode 17, The World Bank, August 2021, https://www.worldbank.org/en/news/podcast/2021/07/30/-absolutely-unacceptable-vaccination-rates-in-developing-countries-the-development-podcast

[15] Kevin Watkins, Ending “Trickle Down” Vaccine Economics, Project Syndicate, September 2021, https://www.project-syndicate.org/commentary/ending-trickle-down-vaccine-economics-by-kevin-watkins-2021-09