Ground-breaking legal challenge leads to government improving due diligence in supply chains

VIDEO: Department of Health forced to scrap how it sources medical gloves for NHS after supplier accused of modern slavery – Channel 4 News‍

The NGO All the Citizens, represented by Wilson Solicitors LLP, have settled their claim in the High Court to challenge the Government’s procurement processes in relation to modern slavery. In May this year the High Court granted permission for All the Citizens to proceed with a legal challenge to the Government’s procurement decision last year with the PPE supplier Supermax Healthcare Limited, the UK-based subsidiary of the Malaysian Supermax Corporation - one of the world’s largest rubber glove manufacturers. The judge’s order set out that there was an arguable claim of a grave breach of public law obligations.

Workers at Supermax factories detailed their experiences of debt bondage, physical abuse and forced labour over the last few years at Supermax factories. The decision made in December 2021 by NHS Supply Chain was for contracts worth £6 billion of UK taxpayer money. The decision to award a place to Supermax came despite the US banning imports from the Malaysian glove manufacturer, following an investigation which identified 10 out of 11 forced labour indicators present within the operations and practices of the Supermax Corporation. In reality it appears UK authorities went ahead with their decision to continue business with Supermax Healthcare Limited without awaiting the further evidence requested from the company after the US bans.

Proceedings were issued by Wilson Solicitors LLP on behalf of All the Citizens in January this year. NHS Supply Chain had responded by outlining future plans for audits of Supermax, however that did not replace their legal duties for appropriate due diligence before making the decision to award. At the core of the case is that these authorities failed to verify the information provided by the company in relation to its modern slavery standards in the face of mounting evidence against it. These actions undermine the authorities claim that they take issues of forced labour seriously within their procurement processes. The authorities have now agreed to provide an undertaking that no orders for gloves will be placed with Supermax under the disputed agreement decision. They will conduct and new procurement exercise for PPE gloves and the award criteria for the new framework agreement will include updated requirements relating to labour standards and modern slavery, such as the provision of a recent audit covering a bidder’s entire supply chain which must assess risk across the ILO’s eleven indicators of forced labour. Suppliers will be unconditionally appointed to the new framework only if they are assessed as “low” risk across all eleven indicators. See the agreement below.

Nusrat Uddin, lead Partner on the case, was interviewed by Channel Four news which covered the story, you can see full coverage above.

Danny Bayraktarova, lead Solicitor on the case, said: We expected that the due diligence, monitoring and enforcement mechanisms would ensure that serious concerns around labour standards, would be effectively addressed. We have not been satisfied by the government authorities’ position that there were ‘no substantiated allegations’ against their suppliers, despite the widespread media coverage of the issues and the US import bans. The approach of the UK authorities in comparison to the US has fallen short. The legal requirements are clear that there should be real verification of suppliers before the award stage, but this was not met by the UK authorities in this case. We are proud to have represented the workers and All the Citizens to successfully bring the first legal challenge in the English courts to consider issues of modern slavery in the Government’s own public procurement processes.

Clara Maguire of All the Citizens said: We are extremely pleased with the outcome. This is a win for all of those concerned with the government’s practices in relation to PPE procurement throughout the pandemic and even before. And particularly for the workers, who have endured these appalling conditions in order to support the global community of medical professionals through the pandemic. It's crucial that courts recognise the role that organisations like outs play in holding the state to account and exposing issues such as those raised in this case. Without this there would not be any challenge to such arguably unlawful actions of the state and the flagrant misuse of public funds.

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