I. Introduction
According to the International Labour Organization’s (ILO) global data on modern slavery, a staggering 25 million people are estimated to be trapped in conditions of forced labour.Footnote 1 Human rights abuses, from child labour to hazardous conditions of work to debt bondage, are often hidden and unintentional aspects of the global supply chains behind our everyday products. In the 1990s, clothing and footwear were two of the first industries to come under pressure for labour and human rights abuses in their supply chains.Footnote 2 The electronics industry followed, with the uncovering of widespread forced labour in Malaysian factories making smartphones and computers for export.Footnote 3 Even one’s food could be produced by slaves millions of miles away. In 2015, the multi-billion dollar shrimp industry was exposed for its cruel enslavement of men, women and children in Thailand peeling shrimp for export to the United States and Europe.Footnote 4
A typical product supply chain consists of a network of separate but integrated entities involved in a production value chain, beginning with raw material suppliers to manufacturers of components and finished goods, ending with distribution to the end consumer.Footnote 5 Over the past few decades, the globalization of economic forces, actors and markets has had both positive and negative effects: contributing to economic prosperity on the one hand, and leading to business-related human rights violations on the other.Footnote 6 Many policymakers have observed that over this period, the scale and power of transnational companies (TNCs) have increased, while the capabilities and capacities of governments have declined.Footnote 7 This has created a ‘fundamental institutional misalignment’,Footnote 8 or a governance gap, in accountability for such human rights violations. As a result, with the global interdependence and integration of corporate supply chains, business activity generated in one country can cause abuses to occur in other countries.
In the absence of an authoritative, international regulatory body to address these human rights violations, new and varied forms of global governance have emerged.Footnote 9 From anti-sweatshop advocacy to media exposure, civil society organizations (CSOs) have been a driving force holding business (and governments) accountable for human rights impacts in business operations. Companies have also developed their own private means of addressing governance gaps, such as supply chain corporate social responsibility programmes designed to uncover and address violations in a brand’s supply chain. Global business exploits and contributes to the weakening of state protection of human rights within their national borders,Footnote 10 which paradoxically, can enhance enforcement of international standards and local laws through privatized regulatory mechanisms.Footnote 11 The complex interdependence of state and non-state actors has led to areas of governance at the intersection of business and human rights that are ‘overlapping, contested and fluid’.Footnote 12
Against this backdrop, and in an attempt to clarify the roles and responsibilities of the state and business entities, in 2011 the United Nations (UN) Human Rights Council endorsed the UN Guiding Principles on Business and Human Rights (UNGPs).Footnote 13 The UNGPs operationalize the three core pillars of the ‘Protect, Respect and Remedy’ FrameworkFootnote 14 : the state duty to protect, the corporate responsibility to respect, and access to remedy. The first pillar establishes the state duty to protect against human rights abuses by third parties, including business. The second pillar clarifies the business responsibility to respect human rights, including identifying, preventing and remediating their human rights impacts. The third pillar codifies the state duty to ensure that individuals affected by business-related human rights harms have access to effective remedy. Since the publication of the UNGPs, state responses to implement the new principles have continued to evolve. As of May 2019, 21 countriesFootnote 15 have published National Action Plans (NAPs) on business and human rights to meet their state ‘duty to protect’. However, given that state frameworks to implement the UNGPs are still in their infancy, there has been limited empirical analysis of the effectiveness of NAPs.
This article aims to assess the effectiveness of the UNGPs and NAPs by focusing on the problem of modern slavery in supply chains and the promise of polycentric governance, a theory of governance premised on the cooperation and interdependence of diverse stakeholders to address a shared problem. The UNGPs promote a polycentric governance approach to addressing human rights violations arising from business activity. Footnote 16 Modern slaveryFootnote 17 is not the only human rights issue identified in NAPs, but is selected for this study because it is one of the most egregious abuses taking place in business operations and emblematic of the global governance gap. The women, men and children at risk of being trafficked or enslaved are by definition, ‘at a heightened risk of becoming vulnerable’, and according to the UNGPs, should receive particular attention in implementation of the principles.Footnote 18 Modern slavery is, therefore, a meaningful standard by which to test the effectiveness of state activities to implement the UNGPs.
This article explores two central questions:
Have NAPs on business and human rights established and implemented new measures that have been effective in addressing modern slavery?
To what extent do NAPs contribute to a polycentric governance framework for business and human rights, which underlies the UNGPs?
To assess these research questions, this article applies the case study method, focusing on the problem of modern slavery, and the NAPs published by the United Kingdom (UK) and the United States (US). These two countries were selected for this study because many transnational companies are domiciled in the UK or US; such companies are generally only subject to the domestic laws of states where they are incorporated;Footnote 19 and both countries have adopted measures to address modern slavery. A conceptual framework of polycentric governance is applied to the case study in order to formulate an early assessment of the effectiveness of NAPs in combating modern slavery.
Based on this analysis, this article argues that both the UK and US NAPs contain elements that have demonstrated the early potential to address the governance gaps surrounding modern slavery, while not yet achieving sufficient scale. The relevant measures within the NAPs include: adopting new transparency requirements for companies; enhancing existing laws; strengthening norms, such as prohibiting recruitment fees in employment; and funding new measures of accountability and innovation. However, the NAP process was not a catalyst for the majority of the five measures reviewed. While the NAPs provide a starting point for reinforcing and focusing state commitments to the UNGPs, it is argued that NAPs should also be designed as true ‘action plans’ with specific improvement targets, timelines and measures to track progress. To strengthen the effectiveness of NAPs as drivers of change, this article suggests ways in which states should optimize five core attributes of polycentric governance, with an approach to NAP development and implementation that is multi-stakeholder, multi-level, interdependent, adaptive and innovative.
This article makes these arguments in three sections. The first part examines the polycentric origins of the UNGPs and outlines the theoretical underpinnings and defining characteristics of polycentric governance. The second part applies the conceptual framework of polycentric governance to the case study of modern slavery and the UK and US NAPs, and presents the study’s findings and recommendations. The third part concludes with a summary of the analysis, recommendations and areas for future research.
II. A Conceptual Framework for Polycentric Governance
A. Introduction
When the UN Human Rights Council unanimously approved the UNGPs in 2011, this endorsement was hailed as a significant milestone. In contrast, a previous attempt in 2003 by the UN to establish a framework of business accountability for human rights lacked the consensus among stakeholders to take any legal effect.Footnote 20 With the failure of the earlier normative initiative, the UN appointed Professor John Ruggie as Special Representative to the Secretary General (SRSG) to identify and clarify standards and practices surrounding human rights and transnational corporations and other business enterprises.Footnote 21 As SRSG from 2005 to 2011, Ruggie undertook extensive stakeholder consultations and research into the existing regulations, governance mechanisms and initiatives – private and public, local and international – regulating the contentious area of business and human rights. He observed that business conduct is primarily influenced by three separate but complementary systems of governance: civil, legal and corporate governance.Footnote 22 New multistakeholder initiatives have also emerged to address business and human rights challenges.Footnote 23 Yet Ruggie notes that each of these regulatory efforts ‘existed as separate fragments’ with none possessing the scale necessary to ‘move markets’.Footnote 24
How could Ruggie bring cohesion to the fragmented regulatory landscape in the business and human rights arena? The conditions were ripe for applying the concept of polycentric governance. According to Ruggie:
What was required was a new regulatory dynamic under which these governance systems become better aligned in relation to business and human rights; add distinct value; compensate for one another’s weaknesses; and play mutually reinforcing roles – out of which cumulative change can evolve. Footnote 25
The UNGPs were envisioned to bring together the three types of civil, legal and corporate governance in a polycentric system to establish a ‘common platform of action’Footnote 26 and an authoritative framework ‘around which the expectations and actions of relevant stakeholders could converge’.Footnote 27
Yet despite the historic consensus reached on the UNGPs, deep divides persist within the business and human rights field. Questions of effective governance and accountability mechanisms for human rights violations resulting from business activity remain highly contested. With no global government mechanism for legal enforcement of the UNGPs, the principles are therefore non-binding for states and companies. The voluntariness of the UNGPs has been a ‘lightning rod’ around which many civil society and human rights organizations have organized to support a binding treaty process as an alternative to the UNGPs.Footnote 28 In the discourse of binding versus non-binding accountability measures, the UNGPs, as a ‘soft law’ approach, have been pitted against the ‘hard law’ approach of a legally binding treaty.Footnote 29 Treaty proponents argue that voluntary initiatives have been in place for decades and a new form of soft law will not end the widespread corporate impunity for human rights violations.Footnote 30 Critics have also argued that the UNGPs might not be able to ‘trigger sufficient changes – through national action plans (NAPs) or otherwise’ in existing regulatory frameworks to provide access to remedy for victims, or to change fundamental business conduct.Footnote 31 On the other hand, proponents of a complementary approach to the UNGPs and treaty argue that the NAP process of identifying protection gaps in regulation and enforcement can help inform the development of a treaty.Footnote 32 Moreover, through the NAP process which aims to strengthen legislation at the national level, states can ‘pave the way for treaty mechanisms in the future’.Footnote 33 From a conceptual standpoint, the question of whether the UNGPs, and NAPs to implement them, can lead to effective change rests upon the theory of polycentric governance.
B. The Polycentric Theory of Change: Harnessing the Power of Networks and the Power of Norms
The promise of the UNGPs to ignite change rests on the underlying assumption that polycentric governance has the potential to harness the power of norms and the power of networks. Globalization, and the global organization of power, is depicted by some scholars as ‘networked, rather than as a set of hierarchies’.Footnote 34 The world system therefore consists of ‘networks among agents’ and ‘norms – standards of expected behavior – that are widely accepted among agents’.Footnote 35 Governance is exercised through networked relations both formal and informal, that involve a diverse set of actors with different types of power and authority.Footnote 36 A central rationale supporting a polycentric approach is that the state ‘cannot do all the heavy lifting required’Footnote 37 and must rely on, and cooperate with, other actors in order to effect governance.
In a polycentric world order, ‘the disciplines of soft power’Footnote 38 become increasingly important. Soft power rests on the ability of agents and their principles to attract and influence,Footnote 39 and ideational factors, or norms, typically form the basis of soft power. Research on norms demonstrates how norm entrepreneurs, from anti-slavery abolitionists to suffragists, to environmental activists, use the soft power of norms to stimulate political and social change.Footnote 40 In the business and human rights context, CSOs have used norms such as codes of conduct, to hold companies accountable for rights violations in product supply chains.Footnote 41 As these examples suggest, where hard law is absent or not immediately attainable, the creation and dissemination of norms can, at times, lead to positive outcomes.
How are the theories of polycentric governance applied in the regulation of global, collective action problems? What are core attributes of the polycentric approach? The next section will address these questions.
C. Summarizing the Key Characteristics of Polycentric Governance
This section describes five characteristics of an ideal model of polycentric governance. These characteristics are gleaned from the literature analysing existing polycentric regimes to regulate transnational human rights and environmental collective action problems. Drawing from examples such as the regulation of conflict mineralsFootnote 42 and climate change,Footnote 43 five core characteristics of polycentric governance are delineated below.
1. Multi-stakeholder
A polycentric system is inherently multi-stakeholder, with each stakeholder bringing diversity in background, expertise and interest.Footnote 44 While all the actors that have governance roles are working towards addressing a common problem, each of those actors may wield a different type of power. Public sector actors may impose mandatory requirements or encourage voluntary standards, while civil society may use the soft power of advocacy or campaigns to influence changes in behaviour. Polycentric governance capitalizes on the different strengths and spheres of influence possessed by various state and non-state stakeholders.Footnote 45
2. Multi-level
A model polycentric regime includes stakeholders and accountability mechanisms at multiple levels, from the global to the local.Footnote 46 The nature and complexity of the problems themselves coupled with prevailing governance gaps often require solutions to be developed at multiple scales. Thus, even where the problem to be regulated requires change at a global level, central to the polycentric approach is the involvement of local, grassroots decision-making bodies in the process of change.Footnote 47 A polycentric approach that maximize resources and efforts at various levels of governance, in turn allows for benefits to be gained at multiple levels.Footnote 48
3. Interdependent
In polycentric governance, state and non-state actors may be formally independent, but there is a recognition of interdependence among actors. An interdependent system of regulation may have ‘areas of agreed authority’ as well as areas in which authority is contested.Footnote 49 However, in the ideal form, each stakeholder contributes unique value, counterbalances each other’s limitations, and functions in ways that complement and support one another.Footnote 50 For example, civil society’s role in documenting human rights abuses may promote changes in corporate behaviour or influence state actors to enact legislation.Footnote 51
4. Adaptive
The effectiveness of polycentric governance hinges on the ability of the system to facilitate ‘mutual monitoring, learning and adaptation’.Footnote 52 Adaptability in global governance refers to a system in which actors adapt international norms to their local context, and implementation is subject to periodic monitoring and revision.Footnote 53 This feature also allows for exchange of information about best practices and solutions among actors working towards a shared goal.Footnote 54
5. Innovative
By tapping into the knowledge, capabilities and experience of diverse stakeholders within its network, polycentric governance can enhance innovation and creativity to address collective challenges. Because the system does not prescribe a single or specific solution, it has the potential to spark innovative approaches to complex problems. A governance system is ‘fully polycentric’ if it facilitates creative problem-solving at all levels.Footnote 55
While proponents of polycentric governance are quick to caution that this approach is ‘not a panacea’,Footnote 56 incorporating and applying these five core features can maximize the potential of the polycentric model to create positive change. The following case study applies this conceptual framework for polycentric governance to assess the effectiveness of NAP measures to address one of the most ubiquitous and severe business-related human rights abuses: modern slavery.
III. Case Study of National Action Plan Measures to Address Modern Slavery
A. Modern Slavery in Global Supply Chains
The business of producing and exporting cotton was one of the earliest global industries to reap enormous profits off the backs of men, women and children in slavery. The systematic, violent coercion of labour was central to the rapid and global expansion of the cotton empire, which became the launch pad for industrial capitalism.Footnote 57 Yet despite the massive economic benefit of involuntary labour, a growing moral outrage over the ‘blood-stained produce’Footnote 58 ultimately led to the abolition of slavery by the end of the 19th century. Normatively, ‘the general view of slavery changed from the economic focus of the 18th century to the moral or victim focus of the 19th’.Footnote 59 By the 1900s, slavery and conditions of forced labour were widely condemned by the international community. In 1926, the United Nations adopted the Slavery Convention aimed at permanently ending the slave trade, followed in 1930 with the ILO’s adoption of the Forced Labour Convention. To date, the Forced Labour Convention is one of the most ratified ILO Conventions and has been ratified by 178 of the 187 member countries of the ILO.Footnote 60
However, a grim and shocking reality remains. Although slavery is illegal in almost every country in the world today, it persists as a global epidemic.Footnote 61 Modern slaves could have produced the clothes you wear, the electronics you use, the food you eat or the coffee you drink. The ILO report ‘Profits and Poverty: The Economics of Forced Labor’ reveals the staggering profits gained from modern slavery to be an estimated US$150 billion.Footnote 62 In its 2018 Global Slavery Index, the Walk Free Foundation identifies the top products at risk of modern slavery, which includes common items such as: laptops, computers, cell phones, apparel, accessories, fish, cocoa and timber. The business of slavery occurs in developing and developed countries alike, and persists as a ‘truly global phenomenon’.Footnote 63
Victims of modern slavery could be male or female, young or old, but women and girls are disproportionately affected, and migrant workers are particularly vulnerable. Footnote 64 For example, in a 2014 report funded by the US Department of Labor, the human rights organization Verité uncovered widespread forced labour abuses of predominantly female foreign migrant workers in Malaysian factories manufacturing electronic products for export to the US.Footnote 65 The system of coercion by which these workers were enslaved included deceptive recruitment practices, imposing excessive recruitment fees amounting to debt bondage of workers, and withholding workers’ passports once they arrived in country.Footnote 66
How has slavery managed to thrive in the modern world? The literature on modern slavery attributes its acceleration to economic globalizationFootnote 67 and the governance gaps that permit slavery to flourish.Footnote 68 Governance factors such as the rule of law, rates of corruption, political stability and democratic accountability can narrow or widen the regulatory gaps surrounding slavery.Footnote 69 At the extreme, authoritarianism is a likely precursor for slavery, such as in North KoreaFootnote 70 and Uzbekistan.Footnote 71 Many countries may also lack sufficient resources or the political will for enforcement or prevention of slavery. There are also more subtle and inadvertent governance factors that contribute to the increased vulnerability of workers to slavery. For example, national migration-related policies heighten the vulnerability of foreign workers when visa and work permit policies tie the legal status of foreign workers to their employers.Footnote 72
Likewise, there are regulatory gaps in protection and enforcement at the international level and within countries at the receiving end of goods made with forced labour. In the US, while the regulatory landscape to prevent modern slavery includes mechanisms for corporate liability through civil tort and criminal laws, critics have claimed ‘few prosecutions have occurred at the national level’ and ‘existing laws are not vigorously enforced, if they are enforced at all’.Footnote 73 Moreover, anti-slavery advocates and the literature on modern slavery emphasize that even in countries with stronger laws, capabilities and resources for governance, domestic modern slavery persists.Footnote 74 For example, in a study of regulatory gaps surrounding forced labour in UK domestic supply chains, researchers describe a fragmented governance system in which ‘regulatory enforcement and policing targeting the business of forced labor is limited’.Footnote 75
Modern slavery in supply chains is the type of transnational, egregious human rights challenge that the UNGPs were envisioned to address. The next section examines the UNGP obligations of states to close the governance gaps that permit and exacerbate slavery and other business-related human rights abuses.
B. Addressing Governance Gaps through National Action Plans
The first pillar of the UNGPs upholds the state’s duty to protect individuals within their jurisdiction and borders from human rights abuses resulting from business activity.Footnote 76 The UNGPs also elaborate that states should establish ‘clear expectations’ for all businesses domiciled within their territory or jurisdiction to respect human rights ‘throughout their operations’.Footnote 77 Thus, the UNGPs extend the duty to protect principle beyond a state’s territorial boundaries with respect to business conduct. The UN Working Group on Business and Human Rights (UNWG)Footnote 78 recommends that each state establish a NAP on business and human rights, with the goal of outlining the state’s strategy and specific plan to implement the UNGPs.Footnote 79
According to the UNWG guidance documents, the following four criteria are considered ‘essential’ for NAPs to be effective.Footnote 80 NAPs should be: (1) founded on the UNGPs, (2) developed according to the specific national context, (3) drafted through an inclusive and transparent process, and (4) regularly reviewed and updated.Footnote 81 While there is no one-size-fits-all approach to NAP creation, the UNWG recommends that states conduct baseline assessments and stakeholder consultation in order to identify the priority human rights issues and gaps in protection, as well as develop concrete measures to address governance gaps.Footnote 82 In addition to the UNWG guidance, the International Corporate Accountability Roundtable (ICAR) and the Danish Institute for Human Rights (DIHR) developed one of the first NAP ‘Toolkits’,Footnote 83 which outlines 25 criteria for the development process and content of NAPs. The ICAR-DIHR Toolkit has also served as a reference point by which CSOs and academic researchers have analysed various states’ NAPs. Footnote 84 This research has demonstrated that existing NAPs have varied considerably in their development, content and review processes. Yet there has been limited analysis of NAPs with respect to addressing specific human rights abuses and the corresponding governance gaps.
Given the array of governance factors and protection gaps that create conditions for modern slavery, to what extent have states addressed these within their NAPs? The following discussion highlights two measures from the UK NAP and three from the US NAP that address modern slavery.
C. UK National Action Plan
The UK was the first country to develop a NAP, which was published in 2013, entitled Good Business: Implementing the UN Guiding Principles on Business and Human Rights. Footnote 85 Subsequently, the UK issued an update to its NAP in 2016. The first UK NAP does not mention modern slavery (or its related forms, such as forced labour or human trafficking). In the 2016 NAP update, however, the issue of modern slavery in supply chains is given significant attention, particularly in relation to the UK’s commitments to two global agendas: the Sustainable Development Goals (SDGs) launched in September 2015 and the 2015 G7 Leaders’ Declaration SDG 8.7 specifically sets a target for states to, inter alia, ‘take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking’.Footnote 86 The G7 Leaders’ Declaration affirms support for the UNGPs, NAPs, and encourages companies to ‘implement due diligence procedures regarding their supply chains’.Footnote 87
The 2016 NAP update cites the Modern Slavery Act (MSA) and Modern Slavery Strategy as examples of the UK’s commitment to the SDGs, the G7 Leaders’ Declaration, and the UNGPs.Footnote 88 The MSA was a significant legislative development in the UK that consolidated existing legislation, strengthened penalties for perpetrators, enhanced protection for victims, and established an independent Anti-Slavery Commissioner.Footnote 89 The 2016 NAP update also describes the UK’s actions to support the corporate responsibility to respect human rights, which includes developing guidance for companies to implement the MSAFootnote 90 and providing funding and support to the Corporate Human Rights Benchmark (CHRB). Footnote 91 The CHRB is a new initiative to assess and rank company human rights performance, and includes criteria for evaluating companies on their prevention and remediation of forced labour in their supply chains. The UK also supported the development of the UNGPs Reporting Framework, which provides guidance to companies on human rights reporting in accordance with the UNGPs and national legislation, such as the MSA. The UK’s 2016 NAP update, therefore, includes a number of actions that address modern slavery in supply chains. The following analysis assesses two of these measures: the UK’s passage of the MSA and funding of the CHRB.
1. Modern Slavery Act
The enactment of the MSA in 2015 strengthened the UK’s legal framework to combat modern slavery. Civil society played an instrumental role in exposing the problem of modern slavery in the UK, and in lobbying for and shaping the content of the MSA.Footnote 92 In order to create a multi-faceted response to modern slavery, the UK government adopted a polycentric approach to the MSA drafting process, with a view ‘to encourage as wide participation in the development of the Bill as possible’.Footnote 93 While the process that culminated in the MSA was separate from the UK’s process of adopting a NAP,Footnote 94 the MSA is regarded as ‘one of the most promising actions [to promote corporate disclosure of human rights due diligence] taken by the UK government between its two NAP iterations’.Footnote 95
One of the MSA’s novel provisions related to the UNGPs is the requirement for companies with annual turnovers of UK£36 million or more to produce a public disclosure statement describing their activities to ensure that modern slavery is not taking place in their supply chain or business.Footnote 96 This requirement is estimated to impact 12,000 companies,Footnote 97 including TNCs that have operations in the UK. The underlying rationale behind the public disclosure provision of the MSA is that transparency empowers consumers and other stakeholders to demand and force change that will make slavery unprofitable.Footnote 98 However, on the spectrum of weak to hard accountability measures, a public reporting requirement is relatively weak. The MSA does not prescribe how companies should address modern slavery or even require that companies take steps to address modern slavery.Footnote 99 Consequently, a company could publish a statement that they have taken no steps at all, and the company would still meet the legal requirements of the MSA.Footnote 100 At the other extreme, a company could disclose its findings of actual cases of modern slavery, forced labour or trafficking in its supply chain, and it would not be subject to any penalty.Footnote 101 It would also be feasible that a company could fabricate or embellish the information contained in its disclosure statement in order to avoid the cost of implementing actual and comprehensive due diligence.Footnote 102
The weak enforceability of the MSA with respect to corporate supply chains has also garnered strong criticisms from academics and human rights organizations. Sceptics have argued that an open-ended disclosure requirement is unlikely to incentivize companies to change their behaviour, rendering the MSA’s influence more ‘symbolic’ than ‘practical’ in improving corporate human rights due diligence.Footnote 103 As such, many commentators have argued for meaningful and tougher sanctions for companies that fail to comply with the MSA.Footnote 104 Critics caution that superficial disclosure requirements without significant consequences for violations will not lead to ‘structural and organizational advancements’ necessary to eradicate modern slavery from supply chains. Footnote 105 At worst, disclosure can even have the unintended consequence of providing companies with the ability to ‘hide’ behind their reporting requirements and assuage consumers without making actual changes.Footnote 106
The disclosure requirements of the MSA, while new to the UK, were modelled after a law passed by the US state of California, Senate Bill 657 (SB 657) known as the California Transparency in Supply Chains Act of 2010. Footnote 107 While SB 657 does not specify how often a company needs to update its statement, one way in which the MSA goes further is the requirement that companies publish statements on an annual basis.Footnote 108 Annual reporting allows stakeholders, such as civil society, investors and consumers, to monitor company progress in addressing modern slavery. Yet both the MSA and SB 657 fall short in enforcement of their transparency provisions. Neither the UK nor the California State Government established mechanisms to monitor and report on compliance, such as publishing lists of companies that are subject to the disclosure requirements.
Impact: Business Transparency and Creation of the Modern Slavery Registry
Despite the clear limitations and weaknesses of the MSA noted above, there are early indications that the MSA has helped improve the ability of civil society to hold companies accountable for human rights. In 2017, a coalition of human rights organizations and anti-slavery advocates launched an online Modern Slavery Registry, published as a free, public resource to easily search and compare company statements. As of May 2019, the database includes statements from over 11,800 companies under the MSA and over 1,700 companies subject to SB 657.
Human rights groups have used the MSA’s requirements to raise awareness about modern slavery and compare company performance. In 2018, the anti-slavery organization Know the Chain published a report on electronics companies’ responses to the MSA and scored companies on their disclosures.Footnote 109 Know the Chain reports that following their outreach to electronics companies that had not published a statement, eight companies subsequently published a statement and ‘one additional company committed to publishing a statement’.Footnote 110 While a modern slavery statement is not an end in itself, the information contained in the statements can be used by stakeholders to identify gaps as well as good practices in company performance.Footnote 111 Despite the MSA’s shortcomings, the new disclosure requirements have contributed to an environment of increased transparency on corporate human rights due diligence.
2. Funding the Corporate Human Rights Benchmark – Evaluating Performance on Forced Labour
The 2016 UK NAP also describes how the state provided start-up funding and support to the CHRB, Footnote 112 a multistakeholder initiative of CSOs and investors that ranks company human rights performance and makes the results publicly available. Unlike the MSA, the UK government’s funding of the CHRB was connected to the process of implementing its NAP.Footnote 113 Following the UK’s participation in the UN Forum on Business and Human Rights in 2014, the government urged additional countries to support the CHRB to ‘ensure that human rights performance of business throughout the world is assessed fairly and transparently’.Footnote 114 With respect to forced labour, the CHRB methodology establishes criteria to assess company performance within their own operations and supply chains. When an allegation of forced labour is lodged against a company listed on the CHRB ranking, the CHRB assesses the company’s response to the allegation. Company responses are measured against criteria such as whether the response to the allegation was made public and whether the company took appropriate action, such as ‘providing remedy … or engaging in dialogue with the stakeholders reportedly affected’.Footnote 115
Impact: Improved Transparency of Corporate Human Rights Performance
The first CHRB rankings were published in 2017 and included 98 publicly traded companies from the apparel, agricultural and extractives industries.Footnote 116 Fifty-seven companies from apparel and agriculture were assessed on their guidelines to prevent forced labour in their supply chains.Footnote 117 Of these, 26 per cent of companies had published their supplier requirements to prevent debt bondage and 25 per cent had published their guidelines on protecting workers’ freedom of movement. Footnote 118 Following this first report, there is anecdotal evidence that companies may be increasing their transparency and improving their human rights practices as a result of the CHRB. In October 2017, Coca-Cola issued ‘its first stand-alone human rights report, partly as a reaction to the first benchmark’.Footnote 119 Tesco, after reviewing its performance on the CHRB, ‘said it would reflect on the benchmark and “evolve its efforts”’ to tackle human rights issues.Footnote 120
There are also early signs that the CHRB rankings may have helped human rights groups to bolster their campaigns highlighting corporate human rights abuses. In one example, an Australian corporate watchdog organization used the low CHRB ranking of Woolworths Limited to mobilize support for a shareholder resolution requiring the company to address human rights abuses, including ‘slave-like conditions’,Footnote 121 in its supply chain. Investor pressure and the resulting media firestorm led to Woolworths signing a historic agreement with the National Union of Workers to improve human rights protections for farmworkers in the company’s supply chain.Footnote 122 These examples demonstrate the potential of a public-facing ranking mechanism to drive changes in corporate behaviour and performance on human rights.
D. US National Action Plan
The US NAP to implement the UNGPs, entitled Responsible Business Conduct: First National Action Plan for the United States of America, was published in December 2016.Footnote 123 The US was the second country outside of Europe and the eleventh country overall to publish a NAP on business and human rights.Footnote 124 While the US NAP does not use the term ‘modern slavery’, it includes several new and ongoing efforts to combat two forms of modern slavery: forced labour and human trafficking.Footnote 125 The US NAP also focuses primarily on the conduct of business operating abroadFootnote 126 and includes multiple government initiatives to address labour and human rights impacts in global supply chains. One of the most significant actions taken by the US to enhance enforcement of forced labour laws was the enactment of the Trade Facilitation and Trade Enforcement Act (TFTEA),Footnote 127 which strengthens the prohibition of US imports made with forced labour. The US NAP also lists various ongoing initiatives to ‘Leverage U.S. Government Purchasing Power’, including Executive Orders aimed at ‘Prohibition of Acquisition of Products Produced by Forced or Indentured Child Labor’ and ‘Strengthening Protections against Trafficking in Persons in Federal Contracts’.Footnote 128
In addition to legal and policy instruments, the US NAP includes government actions to help the private sector identify, prevent and address modern slavery risks. For example, the US has funded the development of different tools to support companies in eliminating human trafficking from supply chains, such as the Responsible Sourcing Tool and the Sustainable Facilities Tool. Footnote 129 The US NAP also cites a new action of ‘promoting worker voice’ in global supply chains, with government commitments to ‘building innovative tools’ that empower workers to report labour concerns in federal supply chains and ‘leverage public–private partnerships … to promote worker empowerment throughout global supply chains’.Footnote 130 This includes government funding and participation in initiatives such as Partnership for Freedom and Supply Unchained.Footnote 131 Similarly, the US government also provides capacity building and technical support to industries that are high risk for forced labour and human trafficking, such as the agricultural sector.Footnote 132
While there are several anti-slavery measures described in the US NAP, the following analysis highlights three measures across the legislative and policy spectrum: (1) the TFTEA, (2) the 2012 Executive Order ‘Strengthening Protections against Trafficking in Persons in Federal Contracts’, and (3) funding of the Partnership for Freedom.
1. Trade Facilitation and Trade Enforcement Act
The US NAP lists the 2016 enactment of the TFTEA as a new law to ‘promote and enforce high standards’ in responsible business conduct.Footnote 133 However, as the TFTEA was enacted prior to NAP publication, it ‘is arguably not a new action’.Footnote 134 Under the TFTEA, the US government removed an exemption to a previous act (the ‘consumptive demand’ clause) that allowed certain goods to be imported, even if produced through forced labour, if those goods were not made in the US in sufficient quantities ‘to meet the consumptive demands of the United States’.Footnote 135 The removal of this exemption strengthened the authority of the US Customs and Border Protection (CBP) to prevent and investigate the import of products suspected to be produced with forced labour.
Impact: Preventing Import of Forced Labour-Produced Goods
Within two years of implementing this law, the CBP reported that it had ‘detained 57 shipments valued at US$6.3 million’ on suspicion that the goods were made with forced labour.Footnote 136 While this evidence is an encouraging sign of enhanced enforcement, the value of goods detained in the first two years is extremely modest compared with the total value of imported goods likely to be produced with forced labour, estimated by Human Rights First to be US$142 billion annually.Footnote 137 What is more difficult to quantify is how the threat of CBP detentions can shift industry practices and reduce the prevalence of modern slavery in supply chains. In today’s globalized economy, speed is the new currency. A customs detention on forced labour grounds can stall not only that shipment, but might tarnish a company’s reputation, putting it at risk for future detentions. Thus, removing the consumptive demand clause potentially provides a market mechanism to incentivize company behaviour towards preventing forced labour in the supply chain in order to maintain speed to market and brand reputation.
2. Strengthening Protections against Trafficking in Persons in Federal Contracts
One of the ‘key domestic Executive Orders’ listed in the US NAP is the 2012 Executive Order ‘Strengthening Protections against Trafficking in Persons in Federal Contracts’ (E.O. 13627).Footnote 138 In January 2015, a final rule was issued for implementing this Executive Order, which amends the Federal Acquisition Regulation (FAR) to strengthen prevention of forced labour and human trafficking in government contracts. Footnote 139 The new policies prohibit certain practices, such as ‘using misleading or fraudulent recruitment practices’ and ‘charging employees recruitment fees’.Footnote 140 However, the US NAP was not the impetus for either the 2012 Executive Order, or the final rule amending the FAR, as both were implemented prior to publication of the NAP.
Impact: Advancing the Norm of No Recruitment Fees
Despite the fact that the policy banning recruitment fees was established separately from the NAP, the language of the final rule helped to strengthen the ‘norm’ of ‘no recruitment fees’ in supply chains among the business community. A study by the law firm Baker & McKenzie reported that even companies not subject to the Executive Order have voluntarily complied with its requirements.Footnote 141 In April 2015, a few months after the announcement of the final rule, the largest industry association of electronics companies, the Electronics Industry Citizenship Coalition,Footnote 142 announced that it would amend its Code of Conduct to prohibit recruitment fees in its members’ supply chains.Footnote 143 According to the press release announcing this decision, the new language introduced into the Code ‘is in alignment with the recent US Federal Acquisition Regulation (FAR) final rule’.Footnote 144
In 2016, a group of large Transnational Corporations from different countries and industries launched the Leadership Group for Responsible Recruitment. Footnote 145 This cross-sector coalition aims to prevent modern slavery and champion the ‘Employer Pays Principle’ (i.e., no recruitment fees for workers) across multiple industry supply chains. The group announced that one of its objectives would be:
to develop a practical roadmap … a valuable tool for companies as they report under the UK Modern Slavery Act, California Transparency in Supply Chains Act and the US Federal Acquisition Regulation (FAR). Footnote 146
This global business collaboration to tackle modern slavery in supply chains appears to be prompted at least in part by the final rule and other anti-slavery legislative developments in the US and UK.
3. Funding for Partnership for Freedom
The third action examined in the US NAP is the US government’s support and funding of the Partnership for Freedom,Footnote 147 a public–private partnership that launched three ‘Innovation Challenges’ aimed at spurring solutions to end modern slavery. The first challenge, coined Reimagine Opportunity, focused on improving services and infrastructure to support survivors of modern slavery. The second challenge, Rethink Supply Chains, centred on encouraging new technological solutions in the areas of workers’ voices, recruitment or traceability. The third challenge, the Pathways to Freedom City Challenge, aimed to enhance community-wide responses to human trafficking and to promote collaboration among city agencies and community stakeholders, including survivors and anti-trafficking advocacy groups.Footnote 148 The NAP lists the US government’s action to support the Partnership for Freedom under ‘Ongoing Commitments’.Footnote 149 It is therefore not a ‘new’ action, and as with the other two measures assessed in the US NAP, would have been carried out regardless of the NAP.
Impact: Encouraging and Implementing New Solutions to Combat Modern Slavery
How have the Innovation Challenges advanced the fight against modern slavery? This section highlights one of the winning solutions, which was to develop the Labor Safe Digital Certificate, a digital risk assessment tool to help the seafood industry screen for, and address, high-risk areas for modern slavery in their supply chains.Footnote 150 The basis for the digital tool, the Labor Safe Screen, triangulates data from suppliers, human rights authorities and workers in order to ‘illuminate blind spots in production’ from a ‘product’s country-level origins upstream into the workplace’.Footnote 151 The Labor Safe Screen analysed the supply chains for 188 seafood products for 18 participating food companies.Footnote 152 Based on these screenings, companies gained increased visibility to slavery risks in their supply chains, such as debt bondage and lack of employment contracts for foreign migrant workers. A digital version of the Labor Safe Screen has since been adapted as the Labor Safe Digital Certificate, a tool that can be used by food retailers to identify high risks and engage their suppliers in human rights due diligence.Footnote 153 This example demonstrates how NAPs should include actions that promote innovation as one method of addressing the governance gaps that create conditions for modern slavery.
E. Analysis of NAP Measures: Lessons Learned and the Promise of Polycentric Governance
As illustrated in the five examples above, both the UK and US NAPs include measures (mandatory as well as voluntary) that address modern slavery, ranging from enacting new laws, to strengthening existing legislation, to funding innovation in human rights monitoring and corporate self-regulation. However, the majority of these measures addressing modern slavery were developed and implemented separately from the specific processes for developing NAPs on business and human rights. Of the five measures assessed in this study, only the UK’s funding of the CHRB was an action connected to the government’s plans to implement the UNGPs. Are NAPs then irrelevant? How can NAPs improve their relevance and effectiveness in order to protect against adverse human rights impacts caused by business?
As a starting point, NAPs provide a means for governments to reinforce existing commitments focused on business and human rights and raise awareness about priority human rights issues. For example, the US and UK NAPs both underscore the commitment of these two key states to eradicate modern slavery and highlight forced labour in supply chains as a significant impact area. Yet rather than merely summarizing actions already taken, NAPs should establish forward-looking action plans with specific improvement targets, time frames and mechanisms to track progress. Where states have parallel human rights initiatives (e.g., specific to modern slavery or human trafficking), the NAP can reference, or be developed in alignment with, existing initiatives.Footnote 154 Moreover, considering the centrality of polycentric governance to the UNGPs, NAPs should be designed to enhance and maximize the benefits of a polycentric system of human rights protection. This section analyses the NAP measures against the five core characteristics of polycentric governance and provides recommendations for states to optimize polycentric governance as a means to improve NAP effectiveness.
1. Multistakeholder
Polycentric governance is inherently multistakeholder, and the following examples from the UK and US NAPs demonstrate multi-stakeholder approaches to address modern slavery. For example, during the drafting of the MSA, the UK government drew input from diverse stakeholders ranging from human rights advocates to business groups and law enforcement. In addition, the UK’s funding of the CHRB demonstrates the government’s efforts to engage the investor community as a stakeholder in governance. The US government’s support of the ‘Partnership for Freedom’ demonstrates a multi-stakeholder approach to identifying and generating new solutions to the problem of modern slavery.
Yet while both the UK and US NAPs include aspects of stakeholder consultation and engagement in the measures reviewed above, neither plan fully optimizes the multi-stakeholder approach. Multistakeholder engagement remains piecemeal and limited. On the one hand, both the US and UK plans provide support to the civil society sector, to ensure a robust accountability mechanism that has the ability to organize and influence the corporate sector. However, neither plan includes a comprehensive strategy for the active participation of relevant stakeholders. In order to optimize the polycentric governance framework, NAPs should adhere to the UNWG guidance regarding stakeholder participation and establish a holistic strategy to engage relevant stakeholders at all stages of the NAP process, from issue identification to monitoring progress and updating plans.Footnote 155
2. Multi-level
There was only minimal evidence that the UK and US NAPs effectively involve stakeholders at multiple levels of governance. For example, the only mention in the US NAP of sharing information among state and local governments is in reference to information-sharing regarding public procurement best practices.Footnote 156 Similarly, in the UK NAP, it is unclear how local stakeholders will play a role in addressing modern slavery. The US NAP also fails to mention how the federal government or other states could learn lessons from implementation of SB 657. Failing to assess the implementation and outcomes of this landmark state law that addresses business and human rights is a missed opportunity by the federal government to promote systematic implementation of human rights due diligence reporting by companies.
Because the US legal system operates at multiple levels (federal, state and local), there can be a high degree of variation among states and municipalities in laws and practice. To offset the threat of fragmentation within its domestic governance, the US should involve stakeholders at state and local levels to align policies on human rights disclosure requirements of companies. Consistent standards can provide a common platform upon which companies, civil society, states and other supply chain actors can mobilize collectively and independently. The UNGPs call on states to ensure ‘policy coherence’ on business and human rights issues throughout all levels of government, which is critical to reducing governance gaps.Footnote 157 To promote greater policy coherence and coordination, the US and UK NAPs should outline a strategy and practical steps to include stakeholders at multiple levels.
3. Interdependent
Both the UK and US NAP exhibit features that demonstrate an underlying assumption of the interdependence of multiple stakeholders. For example, the premise of the public disclosure requirement of the MSA is that non-state actors will hold companies accountable to the norm of eliminating slavery from their supply chains. In the US, the new trade law that strengthens US customs enforcement against forced labour also illustrates an interdependent system. The enforcement of this law by the US government will probably rely on reports of forced labour from other non-state actors.
Yet these examples also demonstrate the risks of the state relying too heavily on other stakeholders and abdicating its regulatory and enforcement responsibilities in an interdependent system of governance. For example, the creation of the Modern Slavery Registry by civil society was a result of the UK government’s failure to establish any mechanism to monitor or report on company compliance with the MSA. In a polycentric environment, states need to identify the appropriate balance of hard and soft law approaches that maximise the benefits of interdependent governance and strengthens accountability, rather than weakening it.
4. Adaptive
An ideal polycentric system of governance promotes opportunities for continuous learning and adaptation. The UNWG guidance on NAPs recommends that governments regularly review and update their NAPs in order to track and achieve systemic progress. The UK has demonstrated a stronger commitment than the US to the principles of ongoing monitoring, review and adaptation, and to date, is the only country that has issued an updated NAP. The US lacks any clear commitment or time frame to review, revise and update its NAP.
However, there is some evidence that the US has reviewed its existing laws with respect to modern slavery. The removal of the ‘consumptive demand clause’ in the TFTEA shows a willingness by the US to adapt its laws to changing circumstances. The US has also strengthened its enforcement of the law prohibiting human trafficking in procurement by banning recruitment fees under the FAR final rule. The adaptation of existing laws and norms has had a positive impact in influencing corporate policies and corporate self-regulation of forced labour in the supply chain. Yet, as noted earlier, the failure of both the UK and US NAPs to establish mechanisms for multistakeholder monitoring and evaluation of plan effectiveness hinders the adaptability of the plans.
5. Innovative
Finally, one of the advantages of polycentric governance over other forms of centralized governance is its ability to promote innovation. Both the US and UK NAPs describe new initiatives to address modern slavery that could be characterized as entrepreneurial. For example, the Corporate Human Rights Benchmark, which was funded in part by the UK government, has provided new tools for civil society and investors to hold companies accountable. Similarly, the US funding of the ‘Partnership for Freedom’ initiative has promoted new models and solutions to address modern slavery. These two initiatives will not achieve the necessary scale to curtail the modern slavery crisis alone. The UK and US should consider dedicating additional government resources, in funding and technical support, to accelerate the process of identifying solutions to the problem of modern slavery.
IV. Conclusion
Since the 2011 adoption of the UNGPs, 21 countries have published National Action Plans on business and human rights, and additional countries are in the process of developing them. Yet there is scant evidence in the academic literature of the effectiveness of NAPs to improve human rights protections. Using a case study approach and applying a conceptual framework for polycentric governance, this article attempts a preliminary assessment of the effectiveness of NAPs adopted by the UK and the US to address one the most pervasive – yet often hidden – human rights abuses in global supply chains: modern slavery.
Based on a review of relevant measures from the UK and US NAPs, this article argues that both NAPs contain elements that have demonstrated early potential to address the governance gaps that allow modern slavery to persist. These actions included: adopting new disclosure requirements for companies; enhancing existing laws and enforcement; strengthening norms, such as ‘employer-paid’ recruitment fees; and funding new measures for non-state actors to benchmark company performance and foster innovation. While the majority of measures reviewed in this study were not actions taken as a direct result of the NAP process, the NAPs establish a foundation for states to reaffirm their commitment to business and human rights. To augment this foundation, states should use the NAP process to develop forward-looking action plans with specific targets, time frames, monitoring and verification measures.
Considering the influence of polycentric governance theory on the development of the UNGPs, this article also assessed the ways in which the NAP measures contributed towards a polycentric system of governance that is: (1) multistakeholder, (2) multi-level, (3) interdependent, (4) adaptive and (5) innovative. It is argued that the polycentric features of the NAP measures, such as adapting and strengthening legal frameworks, adopting a multi-stakeholder approach to enforcement, and partnering with non-state actors to develop innovative solutions to the problem of modern slavery, ultimately helped contribute to the effectiveness of the measures. Yet this article showed that the state actions taken to date fall significantly short of meeting the sheer scale of the slavery epidemic. In order to achieve scale and prevent the threat of continued fragmentation in the governance of business and human rights, states should incorporate and optimize the five characteristics of polycentric governance outlined in this article. This includes involving relevant stakeholders in monitoring, measuring and updating NAPs, continuing to fund and support innovation, and improving policy coherence at multiple levels of governance.
The modern slavery case study also showed that while voluntary norms can lead to mandatory standards implemented at the state level, the hard-law requirements examined in this article are relatively weak in terms of accountability, scope and enforcement. For example, the UK MSA has a low bar for compliance, in which a company could disclose that it has taken no steps to address modern slavery and still be in compliance. The US TFTEA enhances the ability of the US customs authority to detain goods suspected to be produced with forced labour, but to date, the value of the goods detained is vastly smaller than the estimated value of forced labour-made goods imported into the US. Because modern slavery is symptomatic of the fragmented governance that permits and exacerbates human rights abuses, this research has implications for future NAP development based on an optimal mix of hard-law and soft-law approaches to address complex, business-related human rights issues.
This article also underscores a pressing need to analyse NAP effectiveness to determine whether actions implemented are achieving the intended outcomes. Given that the scope of this case study was limited to the UK and US NAPs, future studies could also investigate and compare anti-slavery measures from the NAPs of other countries, using this study as a benchmark. Moreover, modern slavery is only one type of adverse human rights impact resulting from business conduct. Future issue-based research could assess NAP effectiveness by focusing on other specific business and human rights issues, solutions, and outcomes in the context of a polycentric approach to governance.
If NAPs are to be effective blueprints for change, states should use the NAP process as a catalyst for new measures–including legal and regulatory reforms–and outcomes should be evaluated. With many governments having made commitments to the SDG goal of ending modern slavery, NAPs can be a tool to address this issue across multiple countries as part of a larger commitment to policy coherence. Ultimately, the success or failure of NAPs rests upon their ability to create meaningful, lasting change in improving the everyday lives of individuals and communities affected by business activity. Ending widespread human rights abuses such as modern slavery will require a sustained commitment and concrete actions on the part of government, and NAPs can and should be part of the solution.
