Seeing through transparency: making corporate accountability work for workers

Blog6 Mar 2018

A new FLEX project, Seeing through transparency: making corporate accountability work for workers, funded by the Freedom Fund, is exploring how to effectively hold companies to account for their actions to secure better working conditions for people in global supply chains. To improve working conditions and prevent modern slavery, we are exploring how to make transparency meaningful, at the same time as we consider its limitations. Through consultation with workers, academics, company representatives and other experts in Bangladesh and the UK, we are developing an action plan to make corporate accountability work for workers worldwide.

Transparency to prevent modern slavery

The UK Modern Slavery Act 2015, introduced the ‘Transparency in Supply Chains (TISC) requirement, which requires companies with an annual turnover of £36 million or more to produce a Modern Slavery Statement. The TISC requirement requires UK companies operating in the UK to report on steps they are taking to address modern slavery in their supply chains. The TISC requirement was an important addition to the Modern Slavery Act and came about through the joint action of NGOs such as FLEX and companies that wanted to see clear requirements for business to create a level playing field. However, a considerable number of companies have failed to comply with the legislation, and the quality of many company statements is poor. Guidance to improve reporting, such as that developed by FLEX, CORE and partners, while a useful resource for responsible companies, does not change or challenge the practices of unscrupulous employers.

‘Ticking time bombs’ – is transparency enough?

The UK Government’s unwillingness to monitor compliance with the TISC legislation and to penalise companies that fail to comply are both barriers to making transparency work. However, to make corporate accountability count, we must also consider the limitations of transparency by asking what else it takes to improve working conditions for people in global supply chains. In the UK, while the Prime Minister brands the country as a world leader in tackling modern slavery, well-known companies are asking for Government action to enforce labour standards, describing UK factories as ‘ticking time bombs’ due to dangerous working conditions.

As FLEX has previously reported, the UK has one of the poorest resourced labour inspectorates in Europe and is far below the International Labour Organization’s recommended target of one labour inspector per 10 000 workers. The risk to unscrupulous employers currently is low – according to the Migration Advisory Committee a company can reasonably expect an inspection once every 500 years. In Bangladesh, another key destination for UK brands, the 2013 Rana Plaza tragedy brought to the fore extremely poor working conditions. Five years on, factories remain unsafe and workers are at risk of exploitation. In this context, we are exploring the impact of transparency legislation, asking how governments and companies can make real improvement to workers in global supply chains – from Dhaka to Leicester.

An action plan: corporate accountability that works

FLEX is now consulting with workers, academics, company representatives and other experts in Bangladesh and the UK to develop an action plan for corporate accountability that works for workers worldwide. The action plan will bring together legislative and enforcement measures that place workers’ rights at its core. If you would like to share your views about how to make transparency meaningful and how to move beyond transparency to make corporate accountability count, please contact Linn Aakvik at linnaakvik@labourexploitation.org.