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Three factors to influence measures to address modern slavery in public procurement

Blog by Sofia Gonzalez de Aguinaga from the Bingham Centre for the Rule of Law.

Published: 18th November 2022

With an average annual spending of 13% to 20% of a country’s GDP on goods, services and works from the private sector, governments are powerful actors that can and “should take steps to prevent and address human trafficking in government procurement practices”.

Many countries, including the UK, have introduced a range of provisions into their public procurement laws and policies and across the stages of the procurement cycle to address modern slavery, and have produced guidelines, training, toolkits and resources to implement them.

But how effective are these measures?

The Modern Slavery and Human Rights Policy and Evidence Centre (Modern Slavery PEC) published a Policy Brief, based on an evidence assessment to review what we know.

The evidence base on the effectiveness of public procurement measures is limited but, case studies from around the world show that public procurement measures have the potential to positively influence supplier behaviour and contribute to reduce modern slavery risks. This is likely to be influenced by many factors and these measures must be implemented effectively in the first place. The evidence suggests that modern slavery provisions in public procurement laws and policies is likely to be more effective when they cover the whole procurement cycle.

There are three factors that significantly influence the effectiveness of public procurement measures aimed at addressing modern slavery and that are particularly useful for policymakers to consider: legal certainty, legislative design and collaboration.

1. Legal certainty

The evidence suggests that laws that are sufficiently clear to provide confidence to public bodies over their modern slavery obligations are more likely to positively influence the effectiveness of public procurement measures in addressing modern slavery as they are more likely to be implemented effectively. This goes from explicitly mentioning exploitative practices such as forced labour and child labour, to clearly describing the permissible measures public procurement officials can take. Such clarity and specificity are key when public buyers might be risk averse to implementing some of these measures, such as human rights due diligence or excluding suppliers from bidding, as tenderers might challenge these decisions legally, leading to a delay in government procurement orders. This is exacerbated by tensions between primary (economic and efficiency criteria) and secondary aims (social criteria) within procurement legal regimes, as prioritising value for money has long been the prevalent public procurement culture in high-income countries.

2. Legislative design

The design of laws can influence the effectiveness of public procurement measures at ultimately addressing modern slavery. For example, a law that requires the exclusion of suppliers from public procurement where they have been convicted for offences related to human trafficking may not be effective if there are very low conviction rates for traffickers.

Similarly, the coverage of and thresholds in the legislation are likely to influence its effectiveness in ultimately addressing modern slavery. For instance, in the US, the clause 52.222-50 on Combating Trafficking in Persons in the Federal Acquisition Regulation (FAR) requires contractors to certify that they have implemented a Compliance Plan to prevent human trafficking. However, this only applies to contracts above $550,000 and covers only non-commercially available off-the-shelf (non-COTS) contracts outside the United States. This leaves out many contracts in sectors such as PPE, construction and food held by the Department of Defence (DoD) - which holds the largest contract spending portfolio in the US- as they are not covered by these criteria, even where there is a high risk of human trafficking either due to location or spend category.

3. Collaboration

As individual public bodies purchase many of the same goods and services, a promising practice that influences the effectiveness of public procurement measures is collaboration. Through collaboration, public authorities can pool resources, increase leverage, reduce costs, promote the sharing of knowledge and simplify processes. For instance, collaborative contracts such as the one developed in 2014 by the City of Madison in the US for a contract of uniforms, allows agencies with limited resources to participate in tenders without setting the requirements themselves.

However, for public authorities to collaborate, it is necessary to develop appropriate national solutions that move away from national and sectoral frameworks, promote structural and procurement data alignment within regions and provide public authorities with sufficient evidence on the benefits of collaboration.

These factors and further evidence presented in our Policy Brief can serve to inform ongoing legislative work worldwide in this area. This includes the UK, where the Procurement Bill aims to exclude businesses that have committed modern slavery and human trafficking offences from participating in public tenders, and establish a ‘debarment list’ – a register of suppliers’ names accessible to all public sector organisations, that have been excluded, similar to the exclusion records in the System for Award Management (SAM) in the US.

Finally, the evidence shows very limited research on the involvement of people with lived experience of modern slavery in the design of such measures. The Modern Slavery PEC will continue carrying out research to identify the latest developments in this area and assess how this might influence the effectiveness of public procurement measures in addressing modern slavery.

Dr Sofia Gonzalez de Aguinaga is a Research Fellow in Business, ESG & Modern Slavery at the Bingham Centre for the Rule of Law. She leads the Modern Slavery PEC's research work strand on business and modern slavery. Follow her on Twitter at @sofiadeaguinaga.