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Global supply chains are under growing scrutiny as stakeholders, decision makers and consumers demand greater corporate accountability, particularly in industries like fashion, construction, manufacturing and agriculture, where child labour and worker exploitation are common. Unsafe working conditions in these high-risk industries often go hand in hand with these abuses, making a unified, holistic approach to compliance essential for mitigating both human rights violations and worker safety risks.

Human rights and health and safety laws share the same goal: ensuring transparency and accountability across businesses and their supply chains. Legislation such as the Modern Slavery Act 2015 in the UK, the German Supply Chain Due Diligence Act, and recent EU Corporate Directives require companies to investigate, monitor, and disclose human rights risks such as forced and child labour. Similarly, the UK Health and Safety at Work Act 1974 and the Management of Health & Safety at Work Regulations 1999 both place the onus on employers to identify and mitigate workplace hazards, ensuring senior management accountability. 

The main regulator in the UK to enforce health and safety failings (the Health and Safety Executive) acknowledges the link between child labour and safety, offering specific legal guidance on securing the health, safety and welfare of young persons, who are likely to be more vulnerable and at more risk of injury in the first six months of a job, as they may be less aware of risks. Young persons often lack experience or maturity or may be unaware of how to raise concerns. In any event, the onus is on the organisation to fully engage with young persons and ensure they have the correct training, supervision and support when performing work activities. 

International standards, such as the ILO Conventions, further reinforce these obligations, setting expectations for ethical labour practices and safe work environments. These binding treaties adopted by states apply across jurisdictions, again placing a duty on employers to ensure labour standards are upheld throughout the entire supply chain.

Despite many similarities, achieving compliance with human rights and health and safety laws is often dealt with as a separate exercise by organisations due to differing auditing frameworks and siloed departments. It is not common practice to approach child labour issues while looking into hazardous working conditions, despite these matters being likely to occur simultaneously, and carrying similar reputational and legal risks.  A prime example is the Rana Plaza factory disaster in Bangladesh, where over 1,100 garment workers died due to unsafe conditions. Investigations revealed rampant child labour in the same factories, highlighting how these risks often overlap. In this instance, both child labour and hazardous working conditions were borne out of the same route causes: poor corporate governance, inadequate factory practices and a failure to conduct adequate audits. This left the organisation exposed to a dual investigation by separate regulators.

Organisations should move towards integrated compliance to tackle both these issues, to demonstrate an appreciation of overlapping corporate and individual risks. This means fostering cross-department collaboration, employee engagement and using unified frameworks to assess both human rights and safety risks. For instance, safety audits should also interrogate  child labour practices, while human rights reviews should include safety conditions through the vehicle of a dynamic risk assessment . This proactive and collaborative approach ensures no risk is overlooked, and will show that the organisation is not simply operating to tick the compliance box, but instead seeking to achieve best practice across their specific sector.

While multi-tiered supply chains pose challenges to compliance exercises, such as hidden subcontracting, opaque and inconsistent local enforcement, and differentiating local labour laws, a unified approach offers significant benefits. It streamlines audits, reduces costs, and appeals to the ever more prevalent socially responsible investors. It helps to mitigate reputational risk in respect of failing to meet the expectations of their employees.  In addition, this approach will provide the best mitigation in the event of a regulatory investigation for civil and criminal breaches, which could result in extortionate fines and potential imprisonment in some jurisdictions for senior managers and directors that may have committed an offence due to consent, connivance or attributable to their neglect. 

Embracing the growing health and safety obligations, particularly the international ISO standards, alongside the global push for ESG (Environmental Social and Governance) transparency in supply chains is the only way forward. A proactive stance on these dual risks will yield businesses that will not only be more productive and cost-effective but fully compliant with industry standards and applicable legislation.

Authors:

Kizzy Augustin | Partner | Dispute Resolution (mishcon.com)

Polly Green | Associate | Dispute Resolution (mishcon.com)

Mishcon De Reya

2 October 2024