Criticising the industry’s “slow response” to the Modern Slavery Act, the Construction and the Modern Slavery Act suggests that “aggressive” business models are “creating an environment for unethical procurement and recruitment practices, and the system auditing failures that are allowing criminals to infiltrate major projects undetected”.

The report alleges that problems are set at the top of supply chains with low cost tendering, abuse of the retentions system and late payment pricing out ethical practice. This situation is creating an “imbalance of power that leaves all nationalities vulnerable to exploitation”, it said. Activities such are blacklisting are also believed to be continuing.

Major contractors in construction typically have long and fragmented supply chains, with little visibility beyond tiers one or two. They are also heavily reliant on temporary migrant labour, a significant indicator of risk. Nevertheless, the report found examples of complacency and disbelief that major projects were vulnerable to criminal infiltration and human trafficking. This contrasted with incidents of modern slavery being found on major UK infrastructure programmes, PFI hospital projects, power plants, recycling centres, renovation projects, demolition sites and local authority schemes.

The report is published as the Gangmasters and Labour Abuse Authority (GLAA) and National Crime Agency (NCA) jointly lead a national enforcement campaign involving police forces and other agencies aimed at tackling labour exploitation. NCA analysis has identified construction as one of the most common sectors for labour exploitation in the UK.

The new CIOB report highlights:

Chris Blythe OBE, chief executive at the CIOB, said its time to “get real” about the challenges facing UK construction.

He added: “Contrary to public perceptions, modern slavery is not confined to small illegal operators. Criminals are attracted to big business because of the greater profits they can earn. Unscrupulous labour providers, operating in the grey area of the law, are also creating misery for thousands of British and foreign workers.

“We need to change the conversation that we have with clients, our peers and the media. Suppliers and labour agencies should be rewarded for finding and reporting problems, contractors need to promote fairer business models and clients need to be more explicit about their ethical expectations. This goes to the heart of professional leadership. We need to empower everyone working in this industry to act, share and collaborate for the greater good.”

Independent anti-slavery commissioner, Kevin Hyland OBE, said: “The construction sector is recognised around the world as one of the highest risk industries for workers to be exploited in forced labour. It is therefore crucial that construction companies take meaningful action to prevent this crime from taking place within their operations and to ensure that anyone working in the sector within the UK or abroad are protected from abuse.

“This new report from the CIOB builds on its previous work highlighting the issue. It provides clear ways for responsible companies to tackle slavery and ensure their labour supply is protected. I hope to see many construction businesses taking up its recommendations and making real changes, so that it can set an example to other high risk sectors.”

Roger Bannister, interim chief executive of the GLAA, added: “There are huge profits to be made for those unscrupulous enough to exploit vulnerable workers and the building industry is extremely lucrative for them. We have carried out operations targeting those who traffic migrant workers into the UK and then force them to work on construction sites, often with false IDs.

“The protocol we developed in the autumn with the construction industry was a step in the right direction with some big names committing themselves to share information and play their part in tackling exploitation. We’d like to see more companies put their name to it and work with the GLAA in helping eradicate slavery altogether.”

Andrew Wallis OBE, CEO of anti-slavery charity Unseen, which operates the Modern Slavery Helpline, said: “The construction sector represented the third most prevalent type of forced labour exploitation cases reported. Economic abuse and isolation were the most common forms of control by the enslavers.

“The fundamental challenge the construction sector faces is that its default business practices facilitate forced labour exploitation. An extractive profit model, based on a repeating subcontracting framework, has created the conditions for illicit traders in human beings to flourish. When added to the fact that many companies are not proactively engaging with the spirit of the transparency in supply chain legislation, the perfect environment exists for people to be exploited.

“Unless there is a wholesale review of current ways of working, we should not be surprised that we continue to have problems in this sector. Tinkering around the edges will not deliver the freedoms victims deserve.”

Roy McComb, deputy director at the NCA, added: “Labour-intensive sectors like construction, where temporary and irregular work are common, are high-risk sectors for exploitation. Tackling modern slavery is a priority for UK law enforcement but everyone has a role to play in spotting and reporting this crime.

“We welcome this report and hope that it acts as a reminder to all employers within the construction industry that labour exploitation does exist and they are responsible for ensuring their supply chains are compliant with modern slavery legislation.”

A full copy of the report is available here.