Corporate liability for modern slavery

Kadriye Bakirci (Faculty of Law, Hacettepe University, Ankara, Turkey)
Graham Ritchie (W Legal Ltd, London, UK)

Journal of Financial Crime

ISSN: 1359-0790

Article publication date: 11 October 2021

Issue publication date: 14 March 2022

950

Abstract

Purpose

The purpose of this paper is to provide an overview of evolving developments in international, regional and EU law including the UK and Turkish jurisdictions for the liability of corporate businesses for modern forms of exploitative labour practices described as the modern forms of slavery.

Design/methodology/approach

In the first part, this paper outlines international, regional and EU instruments, UK and Turkish jurisdictions in relation to modern forms of slavery. The second part reviews legal frameworks for corporate liability for modern forms of slavery.

Findings

Slavery, slavery-like practices or some other exploitative practices are prohibited by numerous international law instruments starting from 1904. Apart from old forms of defined exploitative practices, multiple relevant current exploitative practices, called contemporary or modern forms of slavery exist all over the world. Under various international or regional conventions signatory States have been held responsible for exploitative practices by the international or regional courts or supervisory bodies, yet businesses were largely overlooked as a participating partner in the global movement to eradicate modern forms of slavery. For many years, multi-national businesses have engaged with various voluntary international corporate social responsibility initiatives in response to demands to operate in a socially responsible manner. There is a growing global recognition of the role corporate businesses can and should play in tackling crime and exploitative practices. A number of initiatives at the international and EU level and the introduction of the California Transparency in Supply Chains Act, (2010 – effective from 2012), the UK Modern Slavery Act 2015, the French Act on Due Diligence of Corporations and Main Contractors 2017 (loi sur le devoir de vigilance), the Australian Commonwealth Modern Slavery Act 2018, the Dutch Child Labour Due Diligence Act 2019, (which is due to come into effect in mid-2022), reflect this recognition.

Originality/value

This paper argues that it is important for companies to use available tools, participate in joint initiatives and advocate for binding international and regional instruments and effective national legislation and action – all aimed at ending business involvement in modern forms of slavery.

Keywords

Citation

Bakirci, K. and Ritchie, G. (2022), "Corporate liability for modern slavery", Journal of Financial Crime, Vol. 29 No. 2, pp. 576-588. https://doi.org/10.1108/JFC-09-2021-0189

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited


Introduction

Modern slavery is an update of the term “contemporary forms of slavery” which has been used for decades by the UN to address the same issues [1].

There is no globally agreed definition of “modern slavery”(Scarpa, 2018); however, it is being increasingly used by advocacy groups, international organisations and governments to refer to a wide range of exploitative practices.

Although modern slavery is not defined in law, it is used as an umbrella term that focuses attention on commonalities across these legal concepts covering multiple forms of exploitation including both defined and undefined concepts under international or regional law. Essentially, it refers to situations of exploitation where a person cannot refuse or leave that exploitation because of threats, violence, coercion, deception and/or abuse of power (ILO/Walk Free Foundation/IOM, 2017).

According to a methodology which developed by the ILO and the Walk Free Foundation, in partnership with the IOM to define and measure “modern slavery”, modern slavery covers a set of specific legal concepts including forced labour, debt bondage, forced marriage, other slavery and slavery like practices and human trafficking (ILO/Walk Free Foundation/IOM, 2017).

In this incoherent and uncoordinated global framework, the EU has yet to clarify its position on the concept of modern forms of slavery. In its Resolution of 5 July 2016 on the fight against trafficking in human beings in the EU’s external relations, the EP labels human trafficking as “a modern kind of slavery”.

Despite the different legal definitions that exist in international instruments, people affected by these violations are not always distinct. A person can be trafficked for the purposes of slavery or forced labour, thus pertaining to two or three of the legal categories described below.

The UK and Turkey have ratified a number of the main international and regional (UN, ILO, COE) instruments that form part of the international or regional legal framework to combat modern forms of slavery. The UK’s and Turkey’s legal frameworks have been directly influenced by these instruments and EU Directives. 

The UK enacted the 2015 Modern Slavery Act (“MSA”). The term “modern slavery” is not defined in the Act. The MSA consolidated the existing offences in other legislation under the label “modern slavery”. Under the term, “modern slavery”, offences include slavery, servitude, forced or compulsory labour and human trafficking. The UK’s legislative framework includes a number of other pieces of legislation.

There is no specific national legislation on modern forms of slavery in Turkey. Turkey’s jurisdiction covers a range of exploitative practices which consist of modern forms of slavery.

This article provides an overview of the evolving developments in international, regional and EU law as well as the UK and Turkish jurisdictions in governing the liability of corporate businesses for modern forms of slavery. It does not analyse the issues of forced and child marriages, sexual exploitation of women and children, the sale of children, the use of children in armed conflicts and begging, as these are unlikely to be present in business operations and supply chains.

Human trafficking

Human trafficking (Bakirci, 2009) is a multifaceted and complex issue. International instruments first dealt with the slave trade starting from 1904.

The Slavery Convention of 1926 which was amended by the UN Protocol of 1953 provides a definition of slave trade. (art.1/2). This is further refined by the Supplementary Convention on the Abolition of Slavery, the Slave Trade and Institutions and Practices Similar to Slavery (1956) (“Supplementary Convention”) (art.7/c).

More recent enactments include the Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children (2000) (“UN Trafficking Protocol”) to the UN Convention against Transnational Organised Crime (2000). The Convention is administered by the UN Office on Drugs and Crime (UNODC) (UNODC, 2016; European Commission, 2021).

The UN Trafficking Protocol is the first legally binding international instrument with an agreed definition of trafficking in persons (art.3). The Protocol distinguishes between trafficking in adults and child trafficking (arts. 3/b, 3/d, 3/c).

In its guide, the UNODC noted that the definition of trafficking in persons “already includes forced labour, slavery or practices similar to slavery, and servitude as forms of exploitation in trafficking in persons” (UNODC, 2004).

The ILO Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, 1999 (No.182) declares that the trafficking of girls and boys under 18 years of age is a practice similar to slavery and, as such, is a worst form of child labour (art.3/a) [2].

The European Court of Human Rights (ECtHR) declares the Human Rights Convention (ECHR) (1950), whose Article 4 prohibits slavery, servitude and forced and compulsory labour, forbids human trafficking (ILC, 1996, 2001), as the ECHR is a “living instrument (ECtHR, 2018)”.

The European Convention on Action against Trafficking in Human Beings (2005) (“European Trafficking Convention”) sets out, in the exact same terms of the UN Trafficking Protocol, its definition for human trafficking (art.4).

Human trafficking is defined by the Treaty on the Functioning of the EU (1957) as a particularly serious form of organised crime (art.83) and is prohibited by the EU Charter of Fundamental Rights (2000) (art.5/3). The Directive 2011/36/EU of 5 April 2011 on preventing and combating trafficking in human beings and protecting its victims is the fundamental EU legislation addressing human trafficking (“EU Trafficking Directive”).

In the UK the MSA encompasses trafficking for all forms of exploitation (s.2).

The Turkish national legal framework in relation to human trafficking consists of Criminal Act (CA) (No.5237) (arts.80, 117), the Foreigners and International Protection Act (FIPA) (No.6458), the Regulation on Combating Human Trafficking and Protection of Victims (“Trafficking Regulation”), The Protection of Family and Prevention of Violence against Women Act (No. 6284) and Child Protection Act (No.5395).

Child labour and the worst forms of child labour

Although various international and regional instruments outlaw child labour and provide minimum requirements for the protection of young workers; the huge numbers of children employed in contravention of these instruments necessitates a clear signal about which forms of exploitation States should give priority to eliminating. The Worst Forms of Child Labour Convention (No. 182) and its accompanying Recommendation No. 190 was adopted by the ILC in June 1999 (Bakirci and Ritchie, 2010).

The Convention No. 182 Article 3 includes a wide number of criminal activities in the term “child labour” and identifies them as among the worst forms of child labour. However, the general term “child labour” does not imply activities such as child prostitution and pornography, the use, procuring or offering of a child for illicit activities, in particular for the production and trafficking of drugs. Those activities are never the less within the ambit of Convention No. 182 Article 3. No matter what role children have in participating in these activities, they should be seen as victims and witnesses. They should not be viewed as “sex workers” or “child labourers” [3].

The ILO Domestic Workers Convention, 2011 (No 189) requires that States Parties take relevant measures for the elimination of child labour affecting domestic workers (art.3/2).

The 1998 ILO Declaration on Fundamental Principles and Rights at Work calls on all member States to promote and realise the effective abolition of child labour within their territories whether or not they have ratified Conventions No.138 and No.182.

The UK MSA does not refer to child labour or the worst forms of child labour. However, English and Welsh legislation on child labour (the Children and Young Persons Act 1933 and the Children’s Act 1989) is compliant with the ILO Conventions and Council Directive 94/33/EC of 22 June 1994 on the protection of young people at work.

Turkish legislation related to child labour (Turkish Constitution art.50; Employment Act (EA) (No. 4857) arts.71–73, 104; Annex 3 of the Regulation on the Principles and Procedures Governing the Employment of Children and Young Workers) and worst forms of child labour (CA arts.80, 117) (Bakirci, 2004) is mainly aligned with international, regional and EU law.

A major inconsistency in the legislation is that as part of Turkey's recent changes in the Primary Education and Education Act (No.222) (art.3), years spent in compulsory education increased from eight years to 12 years, which means that a child would typically complete mandatory education at age 14. This creates a normative contradiction because children between the age of 14 and 15 can be employed in light work for limited daily and weekly hours (EA arts.71–73) but must also attend compulsory education (UN CRC Committee, 2012). In addition, gaps exist in the implementation of the legal framework to adequately protect children from the worst forms of child labour, including the application of the minimum age for work to all children.

Slavery

A definition of slavery first appeared in the Slavery Convention 1926. (art.1/1). The Supplementary Convention went further and covered more ground than the 1926 Convention. It obliged States parties to abolish, in addition to slavery (art.7/a) and slave trade (art.7/c), the following institutions and practices, identified collectively as “servile status” or “slavery-like practices”: debt bondage (art.1/a); serfdom (art.1/b); forced marriage, the sale of wives, the inheritance of a widow on her husband’s death by her husband’s brother or another member of her deceased husband’s family, exploitation of children (art.1/d).

The UN Declaration of Human Rights, 1948 (art.4), the UN Convention on Civil and Political Rights (1966) (art. 8), UN Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families (1990) (art.11/1) and the ECHR (art.4(1)) prohibit slavery and enforced servitude.

The Rome Statute of the International Criminal Court (1998) (art. 7/2(c)) defines enslavement in the same terms as the Slavery Convention’s definition, with the addition of a reference to human trafficking as the process that might lead towards enslavement (ILC, 1996, 2001).

The concept is also included as a form of exploitation associated with human trafficking in the UN Trafficking Protocol (art.3/a) [4].

At EU level slavery or servitude is prohibited by the EU Charter of Fundamental Rights (art. 5/1). Slavery or practices similar to slavery and servitude is also included as a form of exploitation in the EU Trafficking Directive (art. 2/3).

In the UK it is an offence under section 1 of the MSA to hold another person in slavery or servitude, or to require another person to perform forced or compulsory labour.

The Turkish Constitution provides that everyone has the right to liberty and security of person (art. 19/1). Slavery is an offence against humanity (CA art.77/4).

Forced or compulsory labour

The Slavery Convention mentions forced labour and distinguishes forced labour from slavery (art. 5).

The international framework on forced or compulsory labour is established in accordance with the ILO Convention on Forced Labour No. 29 (1930), its Protocol of 2014, Forced Labour (Indirect Compulsion) Recommendation (1930) (No. 35), the Abolition of Forced Labour Convention No. 105 (1957) and Forced Labour (Supplementary Measures) Recommendation (2014) No. 203.

The Protocol of 2014 clarifies the relationship between forced labour and human trafficking, by stating that the treaty provisions also include specific action focused on fighting against human trafficking for the purpose of forced or compulsory labour (art.1/3). The Protocol takes a very inclusive approach and puts special emphasis on the engagement and support of employers’ organisations and businesses. It states that national action plans should be prepared in consultation with employers’ and workers’ organisations. The Protocol calls for due diligence by both the public and private sectors to prevent and respond to risks of forced or compulsory labour (art.2). The Protocol opens up new possibilities for businesses to be fully included in the development of State policies with regard to forced labour and to receive the support needed in fulfilling expectations placed on businesses.

The Domestic Workers Convention (No 189) requires States Parties to adopt measures for the elimination of forced or compulsory labour affecting domestic workers (art.3).

The 1998 Declaration on Fundamental Principles and Rights at Work calls on all member States to promote and realise the elimination of all forms of forced or compulsory labour within their territories whether or not they have ratified Conventions No.129 and 105.

The ILO Committee of Experts broadly interprets the concept of forced labour, thus covering practices constituting vestiges of slavery from the past, practices similar to slavery, debt bondage and human trafficking (ILO, 2012a).

The ILO has produced a set of indicators to identify forced labour that recognises a continuum of exploitation. This continuum includes: abuse of vulnerability, deception, restriction of movement, isolation, physical and sexual violence, intimidation and threats, retention of identity documents, withholding of wages, debt bondage, abusive working and living conditions, excessive overtime. While the ILO emphasises that in some instances the presence of even only one of these indicators might be sufficient to prove forced labour, it also stresses that in other cases multiple indicators should be met to reach the same conclusion (ILO, 2012b).

On the other hand the UN Declaration on the Elimination of Violence Against Women (1993) and the COE Convention on preventing and combating violence against women and domestic violence (2011) seeks to eradicate, among other forms of violence against women, “violence in the world of work”.

The ILO Convention on the elimination of violence and harassment in the world of work, 2019 (No. 190) and its accompanying Recommendation (No. 206) recognise that violence and harassment in the world of work “can constitute a human rights violation or abuse […] is a threat to equal opportunities, is unacceptable and incompatible with decent work”.

The ECHR has similar provisions to the ILO Forced Labour Convention, 1930 (No. 29) (art. 4(2)).

The UN Convention on Civil and Political Rights, 1966 (art. 8) prohibits forced labour.

The ILO Basic Aims and Standards of Social Policy Convention, 1962 (No. 117) is particularly concerned with reducing forms of wage payment that foster indebtedness and requires States parties to take “all practicable measures” to prevent debt bondage (Part IV).

The ILO Minimum Wage Fixing Convention, 1970 (No. 131), and its accompanying Recommendation No. 135, is to give wage-earners the necessary social protection in terms of minimum permissible levels of wages.

The ILO Labour Inspection Convention, 1947 (No. 81), Protocol of 1995 to the Convention no.81, and Labour Inspection (Agriculture) Convention, 1969 (No. 129) require ratifying states to maintain a system of labour inspection for workplaces to ensure the enforcement of laws and regulations for the protection of the workers.

As mentioned above the UK MSA section 1 provides for an offence of slavery, servitude and forced or compulsory labour [5].

The Turkish Constitution (arts.18, 48, 49, 50, 55), CA (art.117), Obligations Act (OA) (No.6098) (art.430), EA (art.8), General Health Act (GHA) (No.1593), Occupational Health and Safety Act (OHSA) (No.6331), Protection of Family and Prevention of Violence against Women Act, Ombudsperson Act (OmA) (No.6328), Human Rights and Equality Institution Act (HREIA) (No.6701) and the Regulation on Labour Inspection Board of the Ministry of Employment and Social Security prohibit forced labour and guarantee decent working conditions.

Corporate liability for modern slavery

Except the European Trafficking Convention, none of the binding international or regional instruments mentioned above include corporate liability, either directly or indirectly. These instruments impose legal obligations on states to protect, respect and fulfil human rights in respect of all persons within their territory or jurisdiction. Each state is responsible under the ratified international or regional instruments for actions by state actors and non-state actors including business enterprises which violate the human rights of those within the territory or jurisdiction of that state.

The European Trafficking Convention requires that each party to the Convention ensures that any legal person (including a company) can be held liable for a criminal offence that is committed for its benefit by a natural person. The natural person can either be acting individually or as part of the legal person, if they are able to exercise control over the company. The Convention requires States to ensure that a company which benefits from human trafficking, committed by a person of authority within that company, commits a criminal offence. There is, therefore, a clear intention for corporates to be held accountable for acts/ommissions committed by senior employees and directors as well as perpetrators. Corporates have to ensure effective procedures to avoid the potential for such acts by employees. The liability of a legal person may be criminal, civil or administrative.

Although not legally binding there are two multilateral documents that help guide businesses in creating practices to respect human and labour rights. These are the UN Guiding Principles on Business and Human Rights; the OECD Guidelines on Multinational Enterprises (Bakirci and Ritchie, 2020). 

The UN Guiding Principles are a set of global guidelines for states and companies to prevent, address and remedy human rights abuses committed in business operations. One pillar of the Guiding Principles is the corporate responsibility to respect human rights. This provides that businesses should act with due diligence to avoid infringing human rights and to address negative impacts of activities in which they are involved.

The UN Guiding Principles are mirrored in the OECD Guidelines. The OECD Guidelines also require OECD member states to set up National Contact Points, to which complaints may be made that a company is in breach of the OECD Guidelines.

The EU has instituted a number of initiatives imposing certain due diligence-related obligations for human rights and environmental impacts.

Directive 2009/52/EC 18 June 2009 providing for minimum standards on sanctions and measures against employers of illegally staying third-country nationals prohibits the employment of irregularly staying third-country nationals, including victims of trafficking. It lays down minimum standards on sanctions and other measures to be applied in the Member States against employers who infringe the Directive.

Directive 2014/95/EU of 22 October 2014 regarding disclosure of non-financial and diversity information by certain large undertakings and groups, requires, from 2018, large EU companies to report on their policies with regard to human rights. Civil society organisations and the EP have called on the European Commission to explore additional legislation, such as making human rights due diligence binding for EU companies.

Directive (EU) 2019/1937 of 23 October 2019 on the protection of persons who report breaches of Union law, provides protection to individuals (whistleblowers) who report a breach of EU law in any of the following areas: public procurement, financial services, money laundering, corporate tax, transport, environment, food and animal welfare, public health, consumer protection, privacy, financial interests of the EU and the internal market. The Directive provides for minimum standards that must be adopted at national level (Bakirci, 2019). This means that EU Member States may choose to extend their national provisions to cover areas beyond those listed above including human rights violations with a view to promoting a comprehensive and coherent whistleblower protection framework at national level.

Council Regulation (EU) 2020/1998 of 7 December 2020 and Council Decision (CFSP) 2021/481 of 22 March 2021 concerning restrictive measures against serious human rights violations and abuses, which establish a sanctions regime for serious human rights violations and abuses such as slavery or abuses that are widespread, systematic or are otherwise of serious concern as regards the objectives of the common foreign and security policy set out in Article 21 of the Treaty of the EU by State and non-State actors – including corporations – worldwide.

On 10 March 2021, the EP passed a resolution with recommendations to the Commission on corporate due diligence and corporate accountability calling upon the Commission to prepare and submit legislative proposals for EU-wide “mandatory supply chain due diligence” and setting out a number of suggestions as to what that legislation should contain.

In the UK the MSA is the first legislative framework to specifically address the liability for modern forms of slavery.

A person committing an offence under section 1 (slavery, servitude and forced or compulsory labour) or section 2 (human trafficking offence) of the MSA can be convicted to imprisonment for life (if convicted on indictment) or to imprisonment for a maximum of 12 months and/or a fine (on a summary conviction). These offences are listed as serious offences in England and Wales under the Serious Crime Act 2007.

Secondary related offences under section 4 are punishable by imprisonment up to 10 years (if convicted on indictment) but if committed by kidnapping or false imprisonment, the person is liable to life imprisonment. On summary conviction, a sentence of up to 12 months imprisonment and/or a fine can be imposed. The MSA provides that modern slavery offences can also lead to confiscation orders under the Proceeds of Crime Act 2002.

Confiscation orders (s.5–7) and compensation orders can be made through a specific “Slavery and Trafficking Reparation Order” (s.8–9). Slavery and Trafficking Prevention Orders can be imposed by the court upon conviction (s.14 MSA). These civil orders are for the purposes of “…protecting persons generally, or particular persons, from physical or psychological harm which would be likely to occur if the defendant committed a slavery or human trafficking offence” (s.17).

Even where a case has not resulted in a conviction, the court can order a Slavery and Trafficking Risk Order (s.23–24 MSA), whilst interim orders of both Prevention and Risk Orders can also be made prior to the main application being determined (s.21 and 28).

Such orders are significant in that they can involve potential non-custodial deprivation of liberty (e.g. prohibitions on foreign travel – up to five years (s.18 and 25)) and non-compliance, absent a reasonable excuse, is an offence in itself and liable to a term of imprisonment not exceeding five years (s.30).

Section 54 of the MSA specifically deals with transparency in businesses and supply chains. It applies to any body corporate or partnership that carries on its business or part of its business in the UK; supplies goods or services anywhere in the world and has (taken together with the turnover of its subsidiaries) a global annual turnover of at least £36m. The interpretation of a “body corporate” and “partnership” is wide and includes a broad range of commercial companies, partnerships, large charities and not-for-profit organisations.

With the aim of improving “transparency”, section 54 MSA requires commercial organisations to prepare and publish an annual Slavery and Human Trafficking Statement. Organisations caught by this obligation will be those that supply goods or services with a turnover equal to or greater than £36m. It applies to corporates or partnerships so long as they are carrying on a business or part of a business in the UK. The Statement must confirm: The steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any part of its supply chains and in any part of its business, or that the organisation has taken no such steps.

Corporates, failing to comply with the obligation to issue a report under section 54 of the MSA can subjected by the Secretary of State to civil proceedings by way of injunction. However, pressure from civil society, consumers and investors as well as actual and prospective business partners may have a more immediate effect.

The content and the detail of such a statement remains within the discretion of each qualifying organisation, with the MSA specifying only what an organisation “may” include (s.54(5)). Regardless of the content; however, each relevant organisation has to publish, without qualification, their statement on their website and provide a link to it in a “prominent place” on their homepage (s.54(7)).

Businesses should be concerned about the commercial and reputational damage a “no steps” Statement may have on their business. 

Companies should not assume that their responsibilities end once their Statement has been published. Subject to rules of attribution, companies remain at risk of corporate criminal liability where attribution to the company of guilt can be established under current Common Law for offences committed pursuant to sections 1, 2 or 4 MSA. What investigations were made will be scrutinised when assessing if a company knew, or ought to have known, that an offence was being carried out. The objectification of the subjective part of mens rea is crucially important. It means that the offence can be proved even without evidence of actual knowledge. If the courts have decided that a corporate entity can commit an offence of harassment – that has the same objective/subjective mens rea test [6] – then they could do the same with the MSA.

The territorial application of the MSA only extends to England and Wales, with some provisions also applying to Scotland and Northern Ireland. However, to the extent that non-UK companies are identified by the MSA they will be required to comply with the obligation to issue a statement. The MSA Section 2 Subsection (6) makes the offence extra-territorial in its reach in relation to UK nationals regardless of where the arranging or facilitating takes place, and where the travel takes place. The MSA also applies to non-UK nationals, where any part of the arranging or facilitating takes place in the UK or where the travel consists of arrival in, entry into, departure from, or travel within, the UK. For example, a UK national who trafficks a person from Spain to France could be prosecuted in England and Wales for this offence. Subsection (7) provides for a more limited territorial reach in relation to a non-UK national. Such a person commits the offence if any part of the arranging or facilitating takes place in the UK or if the UK is the country of arrival, entry, travel or departure.

The UK has so far a piece meal approach to corporate liability for crimes committed by a corporation. Excepting the above the MSA contains no criminal sanctions for the involvement in, or indifference to the fact of slavery in the corporation’s supply chain.

There are no regulatory sanctions for inadequate or negligent annual corporate statements pursuant to the MSA. Reputational loss has been considered to be a sufficient motivator for a corporation to make sure that it is diligent in checking for signs of slavery in its supply chain. That situation might change in the foreseeable future.

There is a private members bill laid before the UK parliament at the time of writing. This is entitled the “Modern Slavery (Amendment) Bill”. Its passage through parliament is unlikely to be opposed. The Bill provides for criminal penalties if criminal conduct of officers can be attributed to the corporation and or officers of the corporation. Were the officers of a corporation to have the criminal intent to commit the crimes specifically listed in the MSA then sections 5, 7, 8 could be used to impose sanctions against the individuals. Reparation orders by reference to the Proceeds of Crime Act 2002 could be made. Conceivably the corporation could also be guilty if the obstacles to conviction of a corporation under UK Common Law such as the Identification Doctrine could be overcome. Under the Modern Slavery (Amendment) Bill relevant officers could be imprisoned for up to two years (There seems to be a need for harmonisation with the drafting of the MSA because under s.5 of the MSA an individual can be imprisoned for life for active participation in a slavery offence). The company could be fined 4% of global turnover up to a maximum of £200,000,000.

There is no provision for strict liability and so proving the offences against a corporate body is subject to the limitations of the outmoded Identification Doctrine, as subsequently finessed by case law, without the fundamental problems of this doctrine being adequately resolved.

If this private members bill becomes law then it will join the Bribery Act 2010 and the Criminal Finances Act 2017 as being a UK statute that explicitly makes a corporation and its relevant officers criminally liable for acts of the corporation, or acts on behalf of the corporation. The Criminal Finances Act 2017 includes the new offence of corporate failure to prevent economic crime. Such a provision could be included in a modern slavery enactment: a new offence of corporate failure to prevent slavery.

Under the Corporate Manslaughter and Corporate Homicide Act 2007 a company is guilty if a death was caused by a management failure which fell far below what can reasonably be expected in the circumstances. There have been very few prosecutions because of the difficulties presented by the identification doctrine. No large corporations have been convicted. Only companies controlled by an identifiable controlling individual have been convicted. Convictions have occurred when a company has pleaded guilty. Any prosecutions of companies responsible for the Grenfell Tower fire [7] deaths has the potential for producing a land mark decision.

Under the Bribery Act 2010 the corporate offence of failing to prevent bribery is established on the basis of strict liability. An unlimited fine can be imposed. Any corporation dealing with territories with systemic corruption needs to establish enhanced systems of supervision and management to avoid the risk of infringement. Whistleblowers in such companies need to be assured of full statutory protection and are to some extent recognised within the Act.

The Criminal Finance Act 2017 by reference to the Proceeds of Crime Act 2002 provides for the recovery and confiscation of the proceeds of gross human rights abuses or violations. Such a provision in a modern slavery updating enactment would be conceptually easy to achieve.

It is long overdue for the UK to abandon the concept of the doctrine of identification (as subsequently developed) whereby a corporation can only become criminally liable for acts directed by a controlling mind of the corporation, senior management or a corporate culture. This is largely only relevant to small companies where there is a controlling mind. It is impractical to apply this doctrine to the huge multinational conglomerates that exist today. Judicial statements in the case of Meridian Global Funds Asia Ltd v Securities Commission [8] attempted to widen the concept of identification doctrine to make it fit for purpose; however, “The doctrine despite its improvements, does not present a feasible option for imposing criminal liability upon a corporation. The improved doctrine fails to address the fundamental problems of the identification doctrine. For instance, the flexibility provided by Meridian will only serve to enhance the uncertainty that has become synonymous with the identification doctrine” (Cavanagh, 2011). Various attempts to finesse the identification doctrine – if not actually replace it – such as the senior management test, aggregation doctrine, corporate culture doctrine as referenced in the 1995 Australian Criminal Code do not adequately address the problem of corporate criminal liability compared to a strict liability test. A strict liability test is now incorporated in the Bribery Act 2012 and the Criminal Finance Act 2017. A new modern slavery act is an obvious candidate for the concept of strict liability given the fundamental violations of human rights that are involved and the evident unsatisfactory gloss which companies can overlay their annual anti-slavery reports with to comply with their basic obligations under the MSA without actually carrying out the due diligence that is in reality needed.

The concept of vicarious liability of a company for the wrongful acts of its officers result in successful prosecutions in the USA, however, given the egregious nature of offences of modern slavery the certainty of strict liability is preferable.

In Turkish Law the EA, OHSA, GHA, OA, HREIA, Protection of Family and Prevention of Violence against Women Act, CA regulates individual liability (Bakirci, 2020) of private sector employers and employer representatives who breach the obligations foreseen in the EA, OHSA GHA, OA, HREIA and CA.

The main sources of corporate liability of private legal entities are the Commercial Act (ComAct) (No.6102) (2011), CA and Misdemeanours Act (MA) (No.5326) (2005).

The ComAct regulates the corporates` and board members` civil liability (art. 549/1). The general duties and liabilities of directors are set out in Article 375 of the ComAct. The company is principally liable for infringements by board members, including tortious acts of board members or directors committed in the exercise of their duties (art. 632). The company can seek an indemnity from negligent parties for any damages incurred. Directors are liable to the company, to its shareholders and its creditors for breach of their legal and contractual responsibilities, unless they can prove an absence of fault (art. 553/1). Where more than one board member is at fault, they are jointly and personally liable for any damage caused (art. 557). The liability of directors is limited to their negligent acts. A director cannot be held responsible if he/she does not act on behalf of the company and is not at fault (art. 553/3).

The MA regulates the administrative liability of private legal entities. The MA provides that the private legal entity shall be subject to an administrative fine where, a representative, or anyone acting within the scope of the legal entity’s business commits crimes such as bribery, fraud, money laundering, bid rigging, or smuggling in favour of the legal entity (art. 43/A).

CA Article 277 places an obligation on Turkish citizens to notify the authorised bodies about the commission of any criminal offence where it is still possible to limit its consequences. It also obliges public officials and public and private health personnel to notify the authorised bodies of any criminal offence while performing their services (arts. 279–280) (Bakirci, 2019).

The Turkish Constitution (art.38) and CA (art.20/1) stipulates that the criminal liability is personal. Therefore, the CA only applies to natural persons.

However, private legal entities can be subject to security measures if directors or representatives intentionally commit a crime in the interest of or for the advantage of the legal entity:

  • revocation of license/permit; and

  • confiscation of property or material interests (CA art.20/2).

The prerequisites for imposing such measures are indicated in detailed by articles 53 and 54 of the CA. The offences of the entities which are sentenced to security measures are set forth under several articles of the CA inter alia crimes against humanity (art. 77); setting up an organisation for the purpose of committing genocide and crimes against humanity (art. 78); smuggling of migrants (art. 79); human trafficking (art. 80); threats (art. 106); blackmail (art. 107); violence (art. 108); deprivation of liberty (art. 109); violation of privacy of communication (art. 132); wiretapping and recording of communications (art. 133); violation of privacy (art. 134); recording of personal data (art. 135); unlawful acquisition or disclosure of data (art. 136); destruction of data (art. 138); abusing trust (art. 155); fraud (art. 157); obscenity (art. 226); prostitution (art. 227).

The CA does not specifically recognise corporate liability for crimes committed abroad by representatives or subsidiaries . However, Turkey is qualified to try Turkish citizens for crimes committed abroad if certain conditions are met (arts.11–13). Therefore, security measures for its representatives or subsidiaries’ actions abroad can be imposed on the legal entity located in Turkey if all these conditions are met: The Turkish representative of the legal entity or subsidiary commits crimes abroad. The penalty for the crime requires at least one year imprisonment under Turkish law. They are prosecuted in Turkey. The crime is committed in the interest of or for the advantage of the legal entity.

The CA does not explicitly regulate the corporate liability of parent companies located abroad where offences are committed by the local company’s directors, managers or representatives. However, other laws may apply (e.g. prohibition from participating in public tenders under the Public Procurement Act (No. 4734)).

The CA excludes public law legal entities from the coverage of the CA. However, HREIA and OmA provides corporate liability of public legal institutions and subjects them to administrative fines if there is a breach of HREIA or OmA.

Comments

Specific international, regional conventions and national legislation refer to forms of exploitation that are considered to be included within the concept of modern forms of slavery. However, the international framework of the law of modern forms of slavery remains undefined, a number of important activities are inadequately addressed by the lack of clear definition of modern slavery: first, the coordinated action involving global governance’s actors in the fight against different forms of exploitation constituting modern forms of slavery; second, the collection of relevant data and calculation of meaningful estimates; and third, the setting of priorities for future action (Scarpa, 2018).

On the other hand, it is evident that there is scope to hold businesses accountable for their human rights violations and businesses face human rights litigation risks through international, regional and national legislation as discussed above. However, more than ever it is important for companies to use available tools, participate in joint initiatives and advocate for binding international and regional instruments and effective national legislation and action – all aimed at ending business involvement in modern slavery.

Notes

1.

UN (1987), Report of the Working Group on Slavery on its 12th Session, Doc. E/CN.4/Sub.2/1987/25, § 114(2); UN General Assembly (2019).

2.

See below “Child labour and the worst forms of child labour”.

3.

For a criticism of the ILO see Bakirci (2007); Bakirci (2009).

4.

See above “Human trafficking”.

5.

See above “Slavery”.

6.

Kosar v Bank of Scotland plc trading as Halifax [2011] EWHC 1050 (Admin), (2011) All ER (D) 08 (May).

7.

Available at www.grenfelltowerinquiry.org.uk/ (accessed 31.08.2021).

8.

Meridian Global Funds Asia Ltd v Securities Commission [1995] UKPC 5.

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Corresponding author

Kadriye Bakirci can be contacted at: kadriy_e@yahoo.co.uk

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