Business as usual? Routine labour exploitation in UK food supply chains

by | Mar 2, 2017 | Business Crime, Food Crime, Modern Slavery | 0 comments

In this latest blog post, Jon Davies, a PhD Candidate in Criminology at the University of Manchester, discusses key findings emerging from his doctoral research. Jon imports the concept of ‘harm’ to better understand how certain business practices and processes that are ostensibly ‘legal’ and ‘routine’ within UK food supply chains, actually have many harmful consequences for labourers in food production.

Previous work conducted by the European Food Crime Research Group at the University of Manchester demonstrates that legitimate actors and dysfunctional markets in the food system can facilitate food fraud. The aim of this research is to examine an important issue in a similar context – how the dynamics of some supply chains result in exploitative and harmful labour practices in the UK agri-food sector, especially for migrant workers in low-skilled occupations.

Conceptualising labour harms

When it comes to exploitative labour practices, we often think of the most severe and ‘newsworthy’ cases, which are associated with modern-day slavery, forced labour, and human trafficking. These severe practices are important areas of research and policy focus.
Yet if we view labour exploitation as a continuum ranging from ‘decent work’ on one extreme, to modern-day slavery on the other, there are a range of harmful practices in between that risk being neglected. A recent output by the Labour Exploitation Advisory Group (LEAG) highlights that numerous ‘minor’ labour abuses are left unchecked and can lead on to more serious exploitation. My research helps draw attention to these routine, banal, and normalised forms of labour exploitation, which seem to occur more frequently than the most severe instances. For example, underpayment of wages, substandard accommodation, and poor safety conditions are unlikely to be classed as modern-day slavery as isolated incidents. Yet these practices are still harmful, and may cumulatively feed into a continuum of exploitative work.

Unlike many street crimes such as burglary, where victims lose property and are worse off than before the crime occurred, labour exploitation is more complex, because workers usually make relative gains from their employment. In other words, labour exploitation can be mutually advantageous for employers and workers. Employers unfairly gain at their workers’ expense, whereas workers tend to be relatively better off in some way when compared to having no work at all; albeit their labour is unfairly compensated. Migrant workers may compare opportunities in their home countries with the UK (or other destination countries), and conclude that they are better off in the UK, even if they are being underpaid or otherwise mistreated.

The role of legal supply chain dynamics

These forms of routine labour abuse do not mean that most businesses in the agri-food sector want exploitation to occur in their supply chains. Yet factors typically associated with UK food production, such as subcontracting, zero-hours contracts, low trade unionisation rates, and poor safety records, suggest that exploitation is structural to many supply chain practices.

Supply chains contain a central tension, which is the need for businesses to meet demand for high quality, low cost, ‘just in time’ products. Since UK food supply chains are dominated by a small number of multi-national retailers who are in fierce competition with each other, they tend to place significant pressure on their suppliers.

This pressure can be helpful when preventing labour exploitation, since buyers can insist their suppliers adopt and enforce ethical labour standards as a precondition for doing business. However, this ‘helpful’ pressure is simultaneously undermined when buyers demand low cost products from their suppliers, who are also in competition with each other for small profit margins. Therefore, costs and risks are transferred down supply chains, often to workers, in the form of low pay and flexible employment contracts. Suppliers may use labour intermediaries such as gangmasters or work agencies as a means to informalise and reduce their labour costs.

One prominent example is zero-hours contracts, where workers may turn up to fields or factories, only to be sent home because there is no work for them that day. Not only do zero-hours contracts generate insecurity for workers, but some have complained of longer term health problems associated with this insecurity. So zero-hours contracts can have harmful implications, yet remain a legal business practice, and in some cases, are essential for suppliers to remain competitive by responding to fluctuating levels of demand.

While supply chain businesses may not want exploitation to occur, they become preoccupied with meeting daily orders and minimising costs to the extent that they lose sight of harmful practices that occur. If there are numerous layers of subcontracting, some businesses may not even be aware that exploitation is occurring. So we can see labour exploitation as a problem inherent to many legitimate supply chain and business practices, rather than being an exclusive problem of ‘rogue’ employers and ‘criminal’ human traffickers.

How can society address labour exploitation?

Given the number of complex issues highlighted here, there is no single intervention that will reduce or eradicate labour exploitation. Most policy makers and researchers think that a strong regulatory framework supported by enforcement is a helpful starting point. Recent UK legislative developments suggest a stronger emphasis on labour market regulation, but this is more complex when examined further.

The Modern Slavery Act 2015 includes a ‘transparency in supply chains’ provision, which means that large companies are required to publish a yearly statement outlining the steps they are taking to address ‘slavery’ in their supply chains. However, this obligation applies to large companies only, and deals with the most severe practices. Smaller companies are therefore excluded from this oversight, as are labour harms that do not meet the threshold of modern-day slavery.

The Immigration Act 2016 has led to a new Director of Labour Market Enforcement, who oversees a number of regulatory bodies, including the new Gangmasters Labour Abuse Authority (GLAA) to address the full spectrum of labour market non-compliance. Yet organisations such as the TUC have criticised this legislation for conflating labour market regulation with immigration enforcement. For instance, migrants with irregular immigration status can have their earnings confiscated as proceeds of crime.

Regardless of how we address labour exploitation, the most severe cases represent the tip of the iceberg. We should not forget about the wider range and larger frequency of labour harms that occur in legitimate supply chain processes.

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