UK Modern Slavery Act expected to increase scrutiny throughout Gulf construction supply chains

Author: Herbert Smith Freehills LLP, Lexology (UK), Published on: 13 October 2017

“Modern Slavery Act 2015 - Implications for the Construction Industry in the Middle East”, 21 August 2017

The Modern Slavery Act 2015 applies to commercial organisations which supply goods or services and carry out any part of their business in the UK, as long as they have a global gross annual turnover in excess of GBP 36 million…[I]mportantly, the Act extends to subsidiaries and joint ventures. Accordingly, the Act applies to many businesses with a UK presence, which carry out business activities in the Middle East. If you are acting as a contractor or supplier to a company carrying out business in the UK, you are likely to see increased scrutiny and the imposition of contractual warranties and representations driven by the introduction of the Act…

Although many companies have robust policies and systems in place to monitor slavery and human trafficking, there are extensive challenges in tackling the issues lower down the supply chain, at commodity level and in respect of suppliers and subcontractors.

The key areas of risk on construction projects in the GCC are as follows:

  1. Accommodation and living conditions of workers;
  2. Living wages and salaries of workers (including overtime fees);
  3. Recruitment fees paid by workers to secure employment in the GCC; and
  4. Retention of workers' passports…

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