By Sue Barham and Peter Coles, Holman Fenwick Willan LLP
Sue Barham and Peter Coles at Holman Fenwick Willan highlight the legal issues surrounding modern slavery and how they are currently affecting the aviation industry.
Modern slavery is a 21st century evil and a global phenomenon. Materialism, a craving for cheap consumer goods and access to anything desired, at any time and at the lowest possible price, fuel a tendency for the vulnerable to be exploited for others’ gain. That has lead to alarming levels of slavery, servitude, forced labour and trafficking in many regions of the world. There is an increasing awareness that business has a contribution to make, not just in preventing modern slavery within its own organisations but also in identifying it within supply chains. For airlines and airports, their staff are crucially placed to assist in the identification of modern slavery. The industry has a preventative role to play therefore, but also should be aware of the potential risks of becoming complicit in trafficking and of the legal and reputational consequences that can result.
There is no single definition. The UN Declaration of Human Rights 1948 stated (Article 4): “No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms.”
Modern slavery is an overarching term which encompasses all forms of contemporary slavery: slavery (where powers of ownership are exercised over another person), servitude (where the obligation to provide services is imposed by coercion), forced and bonded labour (where work or services are involuntarily extracted under the menace of a penalty) and human trafficking (where the travel of a person is arranged or facilitated with a view to their exploitation). Exploitation can take numerous forms; for example, the UK’s Modern Slavery Act 2015, which is highlighted in this article, provides that exploitation includes slavery, servitude, forced or compulsory labour, sexual exploitation, removal of organs, and securing services from children or other vulnerable persons. The consistent theme in modern slavery is the violation of a person’s human rights and/or the deprivation of their liberty in order to exploit them for personal or commercial gain.
The Global Slavery Index estimates that there are 45.8 million people living in some form of modern slavery. Of those, around 58 per cent are said to live in five countries: India, China, Pakistan, Bangladesh and Uzbekistan. North Korea and Uzbekistan are estimated to top the table in terms of percentage of the population living in some form of modern slavery, at 4.3 per cent and 3.9 per cent respectively. While all statistics are capable of being challenged, there can be no doubt as to the scale of the international problem.
So what does this have to do with the aviation industry?
There are many risks of which businesses, including airlines, need to be aware:
criminal penalties can be imposed on persons involved in exploitation;
civil proceedings can be pursued if companies fail to issue statements in relation to the actions they have taken to prevent slavery;
there is a risk of litigation from victims;
there is a risk of breaching ethical procurement terms on commercial contracts; and
potential reputational risks are severe, with the danger of becoming caught up in adverse media coverage and online campaigns as well as potential issues for investor relations, which increasingly have a corporate social responsibility dimension.
Further, airlines, along with others in the transportation industries, face the specific risk that they will be utilised for the purposes of human trafficking and therefore increasingly have specific responsibilities to take care that they are not facilitating trafficking.
In Europe, regulation is found in the European Convention on Human Rights (ECHR), European Directives and national law implementing those directives. The ECHR, the key instrument of human rights law in Europe, contains prohibitions on slavery, servitude and forced or compulsory labour. EU directive 2011/36 requires EU member states to implement laws prohibiting human trafficking, providing for criminal offences punishable by imprisonment as well as for seizure of proceeds, and assistance and support to victims; EU directive 2014/95 requires implementation of national laws requiring disclosure by large undertakings of their policies and practices relating, inter alia, to respect for human rights, anti-corruption and bribery.
In the UK, the principal legislation in this area is now found within the Modern Slavery Act 2015. The 2015 Act consolidates existing legislation containing criminal offences relating to slavery into a single statute. It is pertinent to focus on the offence of human trafficking as it is here that organisations in the aviation industry need to tread carefully. Human trafficking in the context of the Act includes trafficking for purposes of slavery, servitude, sexual exploitation and forced labour.
Pursuant to section 2 of the Act which relates to human trafficking, it is a criminal offence if a person “arranges or facilitates the travel of another person (‘V’) with a view to V being exploited”. Offences under section 2 are punishable by prison sentences – up to life imprisonment – and/or fines. The offence clearly catches those involved directly in the trafficking. However, it goes wider. A person can be regarded as arranging or facilitating travel of V with a view to V being exploited if that person “knows or ought to know that another person is likely to exploit V (in any part of the world) during or after travel” (s.2(4)(b)). Theoretically that is a very broadly framed offence and criminalises the turning of a blind eye to situations which are indicative of exploitation and trafficking. Where trafficking is involved, clearly airlines and airports are vulnerable to criticism and the risk of offences being committed. Vigilance and good training is essential. That can contribute to the identification and prevention of trafficking but can also protect the organisation from reputational damage and potentially criminal liability.
The potential liability exposure for airlines in the event of trafficking does not stop there. Aircraft used for the purposes of trafficking are also at risk. Under section 11 of the Modern Slavery Act, aircraft “used or intended to be used” for human trafficking can be subject to forfeiture in certain circumstances, including where the aircraft owner, or a director, secretary or manager of the owner knew or ought to have known of the intention to use it for human trafficking – so the notion of being penalised for “turning a blind eye” has a potential impact here also. There are also provisions allowing the prior detention of aircraft which could be subject to forfeiture; owners and charterers of such aircraft are able to apply to the court for release from detention but subject to the provision of security – so there are risks also for financiers, lessors and others with an ownership interest in aircraft in the event the aircraft are utilised for trafficking.
The UK’s Modern Slavery Act applies to any UK national regardless of where the conduct constituting trafficking takes place and regardless of where the travel takes place; it also applies to non-UK nationals if any part of the arranging or facilitating of travel takes place in the UK or if the travel consists of an arrival into, a departure from, or travel within the UK. So UK airlines, airports, and ground handlers undertaking check-in operations, and international airlines operating into and out of the UK, need to be vigilant in putting in place training and procedures which seek to identify potential trafficking activities. Signs can include travellers not being dressed appropriately for their journey; not being able to give their departure location or the destination of flight information; deferring attempts at conversation to someone who appears to be controlling them; and, for children, possibly appearing malnourished or showing signs of physical or sexual abuse. Training in this area can help combat trafficking and is also important in minimising the risks of exposure to potentially criminal liability under the UK legislation.
The UK Modern Slavery Act has also introduced formal disclosure obligations on businesses with turnover in excess of £36 million and which carry on any part of their business in the UK to produce annually a slavery and human trafficking statement which must confirm the steps the company has taken during the last financial year to ensure that slavery and human trafficking is not taking place in any part of its own business nor in any of its supply chains. The statement must be signed by a director and published on the company’s website. The Act is not prescriptive about what must be included in the statement but sets out a number of criteria which may be explained as set out below:
the organisation’s structure, business and its supply chains;
its policies in relation to slavery and human trafficking;
its due diligence in relation to slavery and human trafficking in its business and supply chains;
the parts of the business where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage the risk;
its effectiveness in ensuring that slavery and human trafficking is not taking place in its business and supply chains, measured against such performance indicators as it considers appropriate;
the training about slavery and human trafficking available to its staff.
The publication of an effective statement as contemplated by the Act clearly requires a significant level of due diligence, not only with regard to an organisation’s own activities, but also externally in relation to the policies and procedures of suppliers. Companies should be looking to the development of internal reporting procedures, key performance indicators, whistle-blowing policies and compliance oversight, as well as engaging with their suppliers on the same matters. While there are no offences committed or fines which can be imposed for failure to publish slavery and human trafficking statements, the requirement set out in the Act can be enforced by way of injunction or order for specific performance obtained from the court. One can also assume that an organisation’s slavery and human trafficking statement will be one of the first items to be perused in any investigation into whether there has been any complicity with the offence of human trafficking, and that any such investigation will also focus closely on the extent to which the statement reflects actual company practice. It accordingly has the capacity to increase an organisation’s potential liability exposure if it is inadequately drafted or complied with; conversely, it is likely to provide the foundations of a legal defence if it is well crafted and closely followed.
The UK’s Modern Slavery Act 2015 addresses the modern phenomenon is a cohesive and codified manner but other countries have also taken their own steps to legislate. In the US, for example, the Criminal Code prohibits anyone from knowingly benefiting from forced labour; the Mann Act criminalises the transportation of minors and the coercion of adults to travel across state lines or to foreign countries for the purpose of engaging in commercial sex; the Protect Act established enhanced penalties for individuals engaging in sex tourism with children; and in California the Transparency in Supply Chains Act 2010 provides consumers with information about the efforts that large companies are making to prevent human trafficking and slavery in their product supply chains by requiring disclosures in relation to verification, audits, certification, internal accountability and training, posted on the company’s website and accessible by a conspicuous and easily understood link.
Elsewhere and in addition to the UK and the US, governments considered by the Global Slavery Index to be making most response to modern slavery are the Netherlands, Sweden, Australia, Portugal, Croatia, Spain, Belgium and Norway. A relatively strong response, despite the countries involved having fewer resources, is considered to be coming from the Philippines, Brazil, Georgia, Jamaica, Croatia, Montenegro, Macedonia, Moldova, Albania and Serbia, whilst those considered to be taking the least action are North Korea, Iran, Eritrea, Equatorial Guinea, Hong Kong, Central African Republic, Papua New Guinea, Guinea, the Democratic Republic of the Congo and South Sudan.
Modern slavery is an international blight. As highlighted, many governments around the world are legislating to address it, decrease it, and punish the wrongdoers and those who facilitate the wrongdoing. Crucially for industry, governments are also legislating to require more corporate responsibility from large organisations to have them recognise the risks of modern slavery in their own activities, to require them to exercise due diligence in relation to the activities of their suppliers and to expose them to legal consequences if they choose to turn a blind eye to the criminal acts of others. The aviation industry, being uniquely placed as a potential conduit for human trafficking, needs to be fully cognisant of the potential legal risks and the steps to take to guard against them.