HCW0002

Written evidence submitted by a member of the public

Submission relates to the operation of a car wash operating without planning permission (refused) next to a brook.

In July 2017 in Allesley Park, a suburb in North West Coventry, a car wash appeared on private land which has been used to date as a car park for the local Nisa convenience store. One quarter of the said car park was turned into a hand car wash without planning consent.

Concern from local residents to the council stopped the car wash from going into operation at this time as a result of them notifying the planning department of the activity. A planning application was then received and refused based on the risk of contamination to biodiversity (twenty metres from a stream) and the blocking of access to and from a public highway – the issues being traffic management and noise.

The car wash lay idle until 12 March 2018, when it went into operation with no further planning consent. Enforcement from the council gave the applicant until the 21 May to cease operation. A further application has now been received, which does not satisfy residents’ conncerns and objections have been made. Residents also aren’t aware of what the hours of business would be, as there is no place on the planning application that gives this amount of detail.

Effluent is to be discharged to mains sewer via interceptor according to planning however there is no interceptor fitted from what residents can see. They have stated no harmful substances will be drained either, however a pre-acid cleaning spray and removal of brake dust and oils feature in most car wash processing, therefore there are harmful substances that are not being contained. Those running the car wash have made no further changes to access and the 40 car parking spaces have been reduced to 10 with a significant impact on local businesses who rely on customers using those spaces. Coventry also has an epidemic of car washes that operate in the city without planning consent and certainly there are a number of car washes within a two mile radius of this particular one.

Car washes also require a permit from water companies to handle the effluent going down a main sewer and residents are doubtful that the council has checked this car wash has one.

It is clear that there is not a process of communication between local councils, water companies and public highways when issues of car washes operating without consent arise. The biggest breakdown of communication in the planning process has been the continuation of work after law enforcement requested that they cease to trade on the 21 May, however they are apparently at liberty to continue to trade until the further application is heard. This should not be allowed to continue as it is an affront to the planning process that most citizens have to abide by.

In this case when the planning had been refused, Severn Trent Water connected the car wash to the mains water. To do this they had to have consent from Coventry Public Highways for access. When we checked with Severn Trent Water how they had made the connection with no planning in place, they stated that they did not have to check if planning had been authorised. The same question was posed to Coventry Highways and they stated they did not authorise the connection. Here is an issue which should be addressed by the government at scale.

Residents of Allesley Park in Coventry have have sought support from the Wildlife Trust and the government Environmental Agency have been notified of residents’ concerns. The local MP, Geoffrey Robinson has also been contacted via email but has not replied. Residents also await the council’s further findings on this application.

May 2018

HCW0003

Written evidence submitted by Kevin Hyland OBE, Independent Anti-Slavery Commissioner

I am writing to express my absolute support for your examination of hand car washes. Given my role, my focus is on the proven route between human trafficking and the workers being exploited in pursuit of profit.

Having seen first-hand evidence of labour exploitation in London’s car washes while accompanying the Metropolitan Police on a raid in South London I concur with your starting premise that there is grave doubt over whether these car washes even approach “decent work” as outlined under Sustainable Development Goal 8. Rather an industry of exploitation has burgeoned unregulated and this is an area that demands regulation.

The abuse of workers at hand car washes is especially pernicious; not only because it ruins lives as people willing to work hard are exploited and controlled, bedded down in metal boxes, ill fed and worked for illegally long hours on a pittance, but also because it thrives by embroiling an unwitting public in serious organised crime.

The extent to which this crime is prevalent is – despite some excellent ongoing studies – largely unknown, and so I welcome the move to hear evidence on the matter. I hope that you will consider in your recommendations the work that my office has commissioned from the University of Nottingham, led by Dr Akilah Jardine.

Dr Jardine’s research, due to be completed in autumn 2018, explores the prevalence and nature of exploitation within the sector, the international and historical contexts and additionally, examines what a responsible business model for these businesses would involve, such that they were abiding by regulations, paying legal minimum wages and the necessary taxes. Additionally, the recently published strategy of the Director of Labour Market Enforcement recommends piloting licensing schemes for hand car washes as a sector with evidence of multiple non-compliance. As such, it would be good to see the inquiry have regard to the Director's work in this area.

May 2018

HCW0004

Written evidence submitted by a member of the public

Hand car wash opened on Whitby Road Easington without planning permission in June 2017. North York Moors Parks Authority were informed but allowed the car wash to remain open finally granting retrospective planning approval, with conditions March 2nd 2018. Conditions including noise reduction and anti- pollution measures were not adhered to nor have they been adhered to following a Breach of Condition Notice issued April 20th 2018. Since opening in June 2017 the car wash has undergone change of ownership both owners being of Eastern European origin. People working at the car wash are of Eastern European origin and change on a regular basis. It is unsure where they are living but it is not in Easington. Any one visiting the car wash looking like they may be on official business results in some of the workers leaving site for a while. All business appears to be cash in hand. The workers do not appear to be supplied with any form of protective clothing.

May 2018

HCW0005

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Written Evidence submitted by Professor Ian Clark and Nottingham Civic Exchange

1. Executive Summary1.1. This submission builds on research and partnerships developed by Professor Ian

Clark from Nottingham Business School supported by Nottingham Civic Exchange

1.2. Hand Car Washes (HCW) grew to prominence since 2008

1.3. Estimates that across Nottingham and Leicester there are more than 45 HCW

across both cities which often employ up to 10 operatives

1.4. At least 450 people employed through HCW across Nottingham and Leicester

which could be extrapolated to 24,300 operatives across England and Wales

1.5. Virtually no work to reduce the environmental impact of many informalised hand

car washes exists and there are serious questions about how many hand car

washes source water and how they dispose of dirty used water

1.6. The effects of working with chemicals used in car cleaning are potentially

threatening to health and safety especially in cases of prolonged use and

exposure; this is particularly the case in relation to the chemicals used to clean

alloy wheels

1.7. Drainage of waste water and chemicals is an obvious environmental concern but

variation in site location and drainage systems would make regulation difficult.

Whilst the best mechanised car washes re-cycle water this was not found in

HCWs

1.8. Much of the growth of HCWs does not contribute to official figures in terms of GDP

growth precisely because much of it is located in the informalised economy

making its impact difficult to explore

1.9. HCWs are a regression into a lower value added area of work. There is

tremendous physical productivity but HCWs are a lower value-added lower

productivity solution where cheap labour replaces technology

1.10. Hand car washes may represent a form of entrepreneurship, often pioneered by

migrants; on the one hand, this is entrepreneurship but on the other kinship and

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common ethnicity are often shields for clear labour market exploitation. We found

that some HCW entrepreneurs aim to become legitimate employers and have an

ambition to acquire more legitimate regulated brands such as Imo, Shinny and

Waves but this is not always the case

1.11. Our research found no extreme cases of forced labour or modern slavery and

more over the exploitation of workers at hand car washes started once they

arrived in the UK. The majority of hand car washes indulge in some form of labour

exploitation but we would suggest that there is not a clear cut link to human

trafficking in the same way as there is for workers engaged in cannabis farms, nail

bars and the sex work industry

1.12. The cost of lost taxation to HMRC is substantial as is the cost of safeguarding

vulnerable and precarious labour. The provisions of the modern slavery act have

had some effect on HCWs. One national supermarket has banned all independent

hand car washes from their car parks and is now in a partnership agreement with

Waves which has impacted on other local HCWs

2. About the authors2.1. Professor Ian Clark is a Professor of Work and Employment from Nottingham

Business School. Professor Clark has led research projects funded by the ESRC

and the Treasury select committee on the business models of US MNCs and

those of businesses backed by private equity investors. In both cases the research

examined the effects of business models on work and employment. Professor

Clark presented oral and written evidence to the Treasury Select Committee

during its investigation into private equity in 2007 and to the Department of Work

and Pensions’ inquiry in 2014 into the collapse of BHS and more specifically its

pension scheme.

2.2. Professor Clark has been researching the growth of hand car washes (HCWs) for

the past three years. He has published articles in world-leading and internationally

recognized academic journals on HCWs. Professor Clark has presented material

at a GLAA intelligence workshop held at the University of Warwick and has briefed

the director of labour market enforcement, Sir David Metcalf on HCWs at a

meeting held at BEIS. He has also worked with the director of strategy, Darryl

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Dixon, at the GLAA on what a licensing scheme for HCWs might involve.

Alongside these activities he has have interviewed all the appropriate stakeholders

and with a colleague conducted an empirical study of HCWs in two East Midlands

cities. Currently Professor Clark is working on a more extensive ‘tech’ enabled

mapping and categorisation of hand car washes throughout the midlands and UK.

Professor Clark will be happy to discuss the details of this project at any future

meeting of the audit committee

2.3. Nottingham Civic Exchange is Nottingham Trent University’s pioneering civic think

tank with a primary focus on issues relating to the city and the region. Nottingham

Civic Exchange enables discovery by creating a space where co-produced

approaches are developed to tackle entrenched social issues. Nottingham Civic

Exchange supports the role of NTU as an anchor institution in the city and the

region. Nottingham Trent University holds engagement with communities, public

institutions, civic life, business and residents at the core of its mission.

3. Submission

3.1. This submission responds to the categories of question laid out in the terms of

reference for the inquiry published in April.

3.2. Development of the Industry3.2.1. The number of hand car washes in the UK is difficult to calculate for the

following reasons. Firstly, the material published by the hand car wash

association, now known as the car wash advisory service relates only to

England and Wales because Scotland has its own car wash regulations and

approaches to enforcement. A second reason for the difficulty in calculating

the number of HCWs is that that there are different types of HCW with different

degrees of visibility, presence and longevity in England and Wales; for

example, there are pop-up washes, washes present on supermarket car parks

and in city centre car parks. Other HCWs occupy abandoned spaces on

former petrol station forecourts, former pub car parks or pub spaces, which

have now been demolished. Similarly, some HCWs occupy spaces, which

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were previously car dealerships, tyre replacement outlets, or road-side

garages. Together with a colleague, Professor Clark has produced a detailed

study of these different types and estimated the distribution among the

different HCW formats. We also suggested that there could be up to 20,000

HCWs; but that not all of these are permanent and that there are varying

degrees of informalisation. For a fuller view, we suggest you explore two

articles written with Colling from 2016 and 2017 that explore informal migrant

employment in car washes and road side hand car washes in the informal

economy.

3.2.2. In the studies, we conducted in Leicester and Nottingham we found that

individual HCWs had as many at 10 operatives working at any one time.

However an on-going study conducted with my colleague Huw Fearnall-

Williams has also identified ‘one person bucket’ operations operating out of

porta cabins or small caravans. Across Leicester and Nottingham in our

published studies we reported on 45 HCWs; there were more than this number

as we were frequently denied access to HCWs located in city centre car parks

and sometimes those occupying space on national brand supermarket car

parks. For Leicester and Nottingham we therefore estimate around 450

workers employed in hand car washes; assuming there are around 54 cities in

England and Wales if these numbers were replicated there could be around

24,300 workers engaged in this sector. There is though a definitional and self-

identification question because not all those who work at HCWs see

themselves as workers and neither do they see themselves as being

exploited. We were also aware of some workers responding to interview via

‘scripted speech’, which denies any trafficking and or modern slavery offences.

3.2.3. The consensus is that hand car washes began to diffuse as a widespread

presence around 2008. The effect on the legitimate hand car wash sector and

the use of roll-over and drive through jet washes has been devastating.

Throughout my established empirical studies and our current studies we found

mechanical car washes to be abandoned or utilized in some form by hand car

wash businesses but not as drive-through car washes.

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3.3. Environmental Impact3.3.1. The work we conducted is primarily focussed on employment relations and

regulation issues but environmental issues do feature in this work. Anecdotally

we would say that there is virtually no work to reduce the environmental

impact of many informalised hand car washes and there are serious

questions, which need answers about how many hand car washes source

water and how they dispose of dirty used water. The effects of working with

chemicals used in car cleaning are potentially threatening to health and safety

especially in cases of prolonged use and exposure; this is particularly the case

in relation to the chemicals used to clean alloy wheels. At many HCWs

operatives do not wear protective gloves or appropriate footwear, although it

should be stated that the use of protective gear is variable both in and across

HCW formats.

3.3.2. Regulations wise a key issue is the presence of appropriate drains; at HCWs

located on former or still open petrol stations this is less of a problem as many

road-side petrol stations have appropriate heavier drainage systems. HCWs

located on other abandoned spaces do not and there is clear evidence of

degrading and damage to tarmac and around storm drains where chemical

concentration eventually breaks down brick and tarmac. In terms of owner,

landlord and regulator responsibilities our research found a confused and

permissive picture where many blind eyes were turned. Professor Clark is

happy to discuss these issues in more detail confidentially. As part of the

research ethics process at the University of Leicester (where Professor Clark

was employed during the beginning of this research) and at Nottingham Trent

University it is necessary for us to enforce confidentiality because in some

cases those who own HCWs and those who work on them admitted to us that

that they were breaking laws. (e.g. on environmental and employment

regulations.) Some regulators and supermarket landlords terminated our

research engagement with them once we began to pose more difficult

questions about regulatory compliance and sub-contractors.

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3.3.3. In respect of sustainable water use water, re-cycling is one obvious candidate

but this is unlikely as most used water runs off into regular storm drains;

interestingly the best mechanized car washes do re-cycle water. We spoke to

one of the key suppliers of equipment and chemical solutions to the sector

who suggested to us that part of the problem is that many informalised but

large scale HCWs dilute solutions and fail to use others in appropriate mixes.

3.4. Sustainable Employment Practices 3.4.1. Sustainable development goal ambitions and ‘decent work’ cover a variety of

issues and we summarise each of them in respect of HCWs. Much of the

growth of HCWs does not contribute to official figures in terms of GDP growth

precisely because much of it is located in the informalised economy; estimates

suggest that up to 12% of UK GDP is accounted for by informalised activity, an

economy, which supports up to two million workers. In terms of productivity,

HCWs are a regression into a lower value added area of work. There is

tremendous physical productivity but HCWs are a lower value-added lower

productivity solution where cheap labour replaces technology; these points

were presented to the Taylor Review and the Watson Review of modern work

practices and the future of work.

3.4.2. Hand car washes may represent a form of entrepreneurship, often pioneered

by migrants; on the one hand this is entrepreneurship but on the other kinship

and common ethnicity are often shields for clear labour market exploitation.

We found that some HCW entrepreneurs aim to become legitimate employers

and have an ambition to acquire more legitimate regulated brands such as

Imo, Shinny and Waves. Clearly, regulation must be appropriately followed

and more importantly existing regulations in particular those relating to

employment and the environment must be enforced which for a variety of

reasons they are not. Essentially entrepreneurial activity, both collective and

individual at HCWs is largely unregulated. Forced labour and modern slavery

are complex issues. In our research, we found no extreme cases of forced

labour or modern slavery and moreover we found that the exploitation of

workers at hand car washes started once they arrived in the UK; indeed many

HCW0005

7

flew here on low-cost airlines such as EasyJet and Ryanair. Modern slavery

may be present in the HCW sector in the form of labour bondage, which is

often gentrified in the term payment to intermediaries for job or

accommodation placement.

3.4.3. The research we conducted found various degrees of informalisation in work

and employment; the national minimum wage and the living wage were not

enforced, neither were holiday pay arrangements and other aspects of

employment protection. We found wage theft against the then national

minimum wage of 15% which accords with much of the research in the United

States where there is a longer history of unregulated HCWs. Another issue

which our research found was that within the HCW sector there are some

subsistence operations where those who work do not consider themselves as

employees but part of a kinship based collective - we need though to be

sceptical of scripted speech where the speech shields more severe forms of

exploitation.

3.4.4. The majority of hand car washes indulge in some form of labour exploitation

but we would also suggest that there is not a clear cut link to human trafficking

in the same way as there is for workers engaged in cannabis farms, nail bars

and the sex work industry. Unregulated hand car washes do not exist in the

same way as in the UK and Ireland in other EU nations. In German and

Austria, this is the case because of a strong adherence to bio issues and the

green lobby. Academic colleagues at conferences suggest that these

operations would be closed down within days in Germany and moreover the

public would not use them in the same numbers as in the UK; the latter point

may or may not be true. In summary in many northern European EU nations

there is better enforcement of regulations of all types. Darryl Dixon, head of

strategy at the GLAA has acquired some recent comparative data from

European colleagues, which does suggest the embryonic diffusion of hand car

washes in some European nations.

3.4.5. The cost of lost taxation to HMRC is substantial as is the cost of safeguarding

vulnerable and precarious labour. The provisions of the modern slavery act

have had some effect on HCWs. One national supermarket has banned all

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8

independent hand car washes from their car parks and is now in a partnership

agreement with Waves, a hand car wash franchise business, which provides

Tesco hand car washes. One effect of this is that informalised hand car

washes in the vicinity of Tesco stores are beginning to be out-competed by a

legitimate provider.

4. Recommendations

4.1. A licensing scheme should be piloted in a particular region or City and regulatory

compliance could be something that local authorities, in partnership with the GLAA

and other enforcement bodies are more firmly charged with enforcing. In the case

of a city like Nottingham, this may align with the aspiration to become a ‘good work

city’ and a slave free city.

4.2. ‘Nudge theory’ needs to be applied to the public; there is a reason why you can

get a BMW 3 Series washed in 10 minutes better than you could ever do it

yourself; it is because a host of regulations are at a systematic level breached,

disregarded or ignored. Moreover, your car could be damaged due to grit and

small stones in cleaning ‘shammy’ leathers.

4.3. Vicarious business and employer responsibilities could be monitored more closely,

for example, insurances and displays of such. Addressing these responsibilities

can be taken forward in a deterrence approach or a compliance approach to

regulation.

4.4. Publicity campaigns can be used to highlight the downside of using HCWs where

permissiveness is not just that, that is turning a blind eye but a practice that

legitimises exploitation- this is the situation in the United States where eventual

compliance activity found that many unregulated unlicensed hand car washes had

been operational for in excess of ten years.

4.5. As our research, reports many HCWs may well be compliant in all areas other

than aspects of employment regulation and environmental regulation. The task is

how to bring them all into regulation; there are various options – do nothing other

than regulate for extreme exploitation in the form of trafficking; seek to outlaw all

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hand car washes or encourage hand car washes to improve self-regulation in

combination with enforcement action by the IASC and the GLAA.

4.6. Professor Ian Clark is happy to speak to committee members confidentially about

aspects or our research that can’t be made open to the public; He is also happy to

present oral evidence to the committee or individual committee members.

May 2018

HCW0006

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Written evidence submitted by AIR-serv/Valet-serv

Introduction

AIR-serv/Valet-serv is the Trading name for Airvending Ltd which is an America Company with a UK turnover of circa £28 million.

AIR-serv is credited with ISO 9001, 14001 and 18001 standards and we employ 150 people in the UK.

Part of our operation includes the running of four hand car wash sites under the Valet-serv banner for two blue-chip companies.

These sites are run with full legal compliance i.e. VAT registered. Customers can pay by credit/debit card and we issue receipts.

We are fully compliant with environmental legislation i.e. all sites have interceptors and all sites have main drains. All chemicals are biodegradable.

The sites are franchised to legitimate businesses and are monitored and audited both financially and operationally to ensure that they are sustainable.

Hand Car Wash Market

Our market research would indicate that there is c19,000 Hand Car Wash sites within the UK. The majority of which are illegally run in that they do not comply with Health & Safety and they do not pay VAT. Staff are paid below minimum wage, and a lot are self-employed and these are the main stumbling blocks for developing a professional and sustainable industry.

Valet-servs aim was to develop a Hand Car Wash that was fully legal, Health & Safety compliant and sustainable environmentally.

This document details how Valet-serv have achieved this objective as we wanted to be at the top end of the Hand Car Wash market and be the best in class. We believe that we have achieved this goal.

Planning Process

Valet-serv have an arduous planning process to ensure that we are fully compliant with Local Planning Authority requirements and Planning Regulations.

Once we identify the site we review the planning requirements, and if we require planning consent from the Local Authority we submit this through a recognised Architect.

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We comply with all Local Authority requirements especially when it comes to local flood risk areas and environmental requirements i.e. traffic flow and noise abatement. No site is built until Local Authority Consent is received.

All equipment is manufactured by AIR-serv and is CE marked and we have CE Compliance Certificates.

When a site is built we install meters to measure power consumption and water usage which are constantly reviewed to maximise these resources.

Site Set Up

The picture below is a typical setup where we have a wash area that has a 3 stage Jet Wash. The waste water feeds into a interceptor which is then pumped away to foul drainage. Periodically the drains are cleaned by a professional drainage cleaning company to prevent any backflow or flooding of the site.

There is an area for mini valets where we clean the inside of the vehicles, and again all products and chemicals are biodegradable and environmentally friendly.

Employee Benefits

We have manuals for the site operation for Health & Safety and Compliance, Site Operation and Recruitment.

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All employees are interviewed and are checked for compliance to work in the UK.

Contracts are issued. Senior Staff are given a fixed hours contract and Junior Staff are offered Zero hours contracts. Each employee receives a PAYE payslip. Staff complete a Health Form and receive Health & Safety training, and are encouraged to report incidents and near misses so that we can improve our Health & Safety Compliance.

We pay above minimum wage to staff.

Regular audits are carried out with the Franchisee and Valet-serv to ensure Compliance to all operating manuals.We conform to Anti-Slavery Regulations and a number of other policies which we have attached further on within this document.

Point of Sale

We operate a Point of Sale terminal (BIP 1500). This device allows sites to input car registration number and then issue a receipt.

We also operate a contactless credit card system that customers can use and payments by this system are generally 63% of sales.

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MODERN SLAVERY &

HUMAN TRAFFICKING POLICY

Airvending is committed to driving out acts of modern day slavery and human trafficking within its business and that from within its supply chains, including sub-contractors, and partners. The Franchisee acknowledges responsibility to the Modern Slavery Act 2015 and will ensure transparency within the organisation and with suppliers of goods and services to the organisation. These as well as the suppliers of services make up the supply chain within Airvending.

As part of the companies due diligence processes into slavery and human trafficking the supplier approval process will incorporate a review of the controls undertaken by the supplier. Imported goods from sources from outside the UK and EU are potentially more at risk for slavery/human trafficking issues. The level of management control required for these sources will be continually monitored.

The Franchisee will not support or deal with any business knowingly involved in slavery or human trafficking.

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The Franchisee shall take responsibility for implementing this policy statement and its objectives and shall provide adequate resources (training, etc ) and investment to ensure that slavery and human trafficking is not taking place within the organisation and within its supply chains.

A full copy of the regulations relating to t the Modern Slavery Act 2015 can be accessed on the internet.

Ethical employment in the UK

One of Airvending’s key values is to ensure the fair treatment of every Franchisee and every operative on every site. We believe strongly in every individual’s entitlement to earn a fair day’s pay for doing a fair day’s work in a safe and friendly environment. We expect you to adopt this value and ensure that your operatives enjoy this right.

You MUST comply the Anti-Slavery act. Acts and regulations in relation to the fair treatment or workers and employees will change from time to time will advise of any changes.

Franchisee will comply with all regulations under the GLAA (Gangmasters & Labour Abuse Authority).Regular on site audits will be undertaken to ensure compliance with the standards

Corporate & Social Responsibility Policy

CODE OF CONDUCT The behaviour of employees is central to the continued success of the Franchisee. This section sets out what is expected of all employees in terms of their personal conduct when at work and their behaviour towards colleagues.

Code of Business Conduct We follow a Code of Business Conduct and you are expected to comply with this. A copy of the Code may be obtained from your Manager.

Conduct At Work During work times our commercial operations and organizational needs are paramount. You should make sure your efforts and energies are concentrated on achieving work objectives. We expect you to conduct yourself in a reasonable manner towards any person with whom you come into contact on our behalf. We expect you to observe reasonable instructions or requests issued by those authorized to act on our behalf.

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Conduct Outside Working Hours We have no wish to intrude upon your activities or interests outside work. However, we expect you not to engage in any activity outside working hours which:-

Could result in adverse publicity to our organization. May cause us to question your integrity. Prevents you from performing your duties/responsibilities to our satisfaction. Prevents us meeting our legal obligations. Infringements may lead us to investigate further. Disciplinary action, including dismissal in the most serious circumstances, may follow.

Invite

Valet-serv would be more than happy to meet any committee members on our site at BP Sonning Cutting, Reading to review our operation. It is worth noting that this is the Prime Minister’s constituency and the PM Support vehicles use our facility at Sonning Cutting to wash their cars.

May 2018

HCW0007

Written evidence submitted by Dr Ella Cockbain, Lecturer in Security and Crime Science, UCL

I am currently leading a major ESRC1-funded study (£204,000) into labour trafficking into, within and from the UK. The research is a collaboration between University College London (UCL) and the National Crime Agency. It has three main elements. First, my colleague Professor Kate Bowers and I conducted a rigorous systematic review of the European evidence-base on labour trafficking (Cockbain et al., 2018). Second, we examined the UK’s national database of human trafficking referrals for the period 2009 to 2014 (Cockbain & Bowers, In preparation). This source contained information on almost 7,000 suspected victims of human trafficking. Third, we scrutinised detailed case files for 450 unique victims of labour trafficking: all those officially identified as labour trafficking victims in the UK in 2012 and 2013 who came from countries in the European Economic Area2 (Cockbain & Bowers, 2018). We are currently completing detailed analyses of the social and economic conditions of labour trafficking and the geospatial distribution of the cases. Although using law enforcement data for academic purposes has some obvious limitations (Cockbain et al., Forthcoming), our research into the UK’s labour trafficking problem is unprecedented both in its breadth and its depth.

In line with my experience and expertise, this submission deals only with the questions posed around sustainable employment practices.

What proportion of hand car washes are thought to be exploiting workers? To my knowledge, this is not a question that can be answered definitively – at least not reliably, accurately and in a nationally representative manner. I am aware, however, of promising research into hand car washes conducted by the University of Nottingham (Dr Alex Trautims) and Nottingham Trent University (Professor Ian Clark) that would be useful to this enquiry.

Is there a clear link to human trafficking?Yes, there is a clear link to human trafficking. Our research has identified hand car washes as a fairly common context for trafficking into and within the UK for labour exploitation. Of the 450 victims whose detailed case files we examined (Cockbain & Bowers, 2018), 9% (n=40) were exploited in hand car washes. Most of these victims were adult males (n=36)3. The 40 victims exploited in hand car washes came from various Eastern European countries: Bulgaria, Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia. They were fairly typical of labour trafficking victims in the UK in terms of their countries of origin and gender profile.

Less than half (48%, n=19) of those exploited in hand car washes were exploited exclusively in this context. This finding is important as it highlights how the experiences of individual victims of labour trafficking may span multiple industries and exploitations. It also speaks to they way traffickers seek to maximise their profits by seeking and taking different opportunities to generate income from their victims. Other contexts in those exploited in car washes were also put to work by the same or other traffickers included: food processing factories, other factories, painting and decorating, agriculture, domestic labour, leafleting, forced theft and benefit fraud. For two of the three female victims in the

1 Economic and Social Research Council of the UK2 Based on positive ‘conclusive grounds’ decisions. Note that EEA victims constituted the majority (approximately 80%) of all officially identified labour trafficking victims in this period. 3 The sample also included two adult women and two minors (one male, one female).

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HCW0007sample, there were also indications of links to actual or attempted sexual exploitation and suspicions that the traffickers intended to organise sham marriages.

The case files for many (but not all) of those exploited at hand car washes contained explicit reports of dire living and working circumstances. Examples included victims:

Being housed in overcrowded and unsanitary accommodation (for example with cockroaches or limited/no heating or electricity)

Not having access to proper beds (for example, one victim reported there being only one mattress between four men, others slept on mattresses on the floor or directly on the floor)

Being underfed and surviving on a nutritionally limited diet (e.g. bread, jam and beans). Victims were often provided very little food or money to buy food (e.g. one set of traffickers provided 15 victims housed in one property a total of £25/day for food).

Being paid little or nothing Having illegal deductions taken from wages Having identification documents taken away Suffering verbal abuse, being degraded and humiliated Being threatened with violence, arrest and/or deportation Being assaulted Not having access to personal protective equipment for work at car washes Working in wet clothes and wet shoes Working long hours Having little or no breaks during the working day

Victims varied in the hours they were expected to work at car washes. At the more extreme end, some reported working 10-12 hours a day, seven days a week. They varied too in the payments they received. Some victims reported receiving no remuneration at all, whereas others said they were paid minimal amounts. None were paid in line with national minimum wage legislation. Many of the other working conditions cited above also constitute clear violations of labour laws. Some victims were charged a minimum day rate for the ‘right’ to work at the car wash and were only paid when their profits had exceeded this amount. Some victims had deductions taken for chemicals and other equipment, which could be charged at excessively inflated rates.

There was evidence in several files of specific injuries directly related to exploitation in hand car washes, including back injuries, cuts, an abscess and – above all –chemical burns on arms, legs and feet from the chemicals used at work. One victim described suffering such bad chemical burns from the hydrochloric acid-based wheel cleaners that ‘half the skin’ on his feet was ‘peeling off’ them. While trafficked, victims rarely if ever had access to medical care to treat such injuries. In addition to car wash-specific injuries, many victims also reported feeling afraid, intimidated, angry and/or frustrated about their treatment. It is important to note that many of the conditions of exploitation detailed here are not specific to the hand car wash sector but rather common to victims of labour trafficking exploited across diverse industries in the UK.

What is the cost to the public of unpaid taxes in the sector and of police investigations, safeguarding work and minimum wage enforcement?

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HCW0007Victims in the cases detailed above were paid on a ‘cash in hand’ basis, meaning there would clearly have been lost revenue in the form of unpaid taxes. Others are better placed than I to comment on the cost of police investigations, safeguarding and minimum wage enforcement.

How has the 2015 Modern Slavery Act worked in tackling the problem of slavery in the industry?The introduction of the Modern Slavery Act has undoubtedly increased awareness of human trafficking and exploitation (known collectively as ‘modern slavery’). It also marks an expansion from responses focusing on counter-trafficking alone to those that incorporate other forms of exploitation under the modern slavery umbrella. This change in parameters and increases in awareness, attention and prioritisation are likely among the key factors driving the substantial growth in suspected victims referred to the authorities (National Crime Agency, 2018) and volume of calls to the Modern Slavery Helpline (Unseen, 2018). In this respect, the growing number of cases does not mean the trafficking/exploitation problem is necessarily getting worse: the UK may simply be getting better at uncovering and identifying the problem.

There is, however, a long way still to go to improve responses. Although legislation is important, legislation alone does tackle slavery in car washes or any other industry. Very little is known about ‘what works’, by what mechanisms and in what contexts to reduce the scale, scope and harms of any form of labour exploitation (Cockbain et al., 2018). We need robust evaluations of interventions to tackle labour trafficking and labour exploitation. There is also a tendency to focus too heavily on reactive counter-measures. Rather than treating arrests and prosecutions as the hallmark of success, investing in targeted deterrence, detection and disruption could reduce harms in the first place. More and better-quality research on labour trafficking – in car washes and beyond – is a crucial step towards generating the necessary evidence to inform well-substantiated and carefully targeted preventative interventions (Cockbain et al., 2018). It is also vital to provide better support to victims of modern slavery: many are heavily traumatised individuals whose support needs will understandably persist well beyond the standard 45 day recovery and reflection period. More funding is likely needed to meet these goals and support vulnerable individuals and prevent re-trafficking. There has also been a tendency in the UK and across Europe to focus service provisions too heavily on sex trafficking, leaving the needs of labour trafficking victims overlooked (Antal & Laszlo, 2015; Jokinen & Ollus, 2011; Oram et al., 2012; Rijken, 2011). Labour trafficking victims are likely to have different support needs than, for example, sex trafficking victims since they differ in their socio-demographic characteristics, trafficking experiences and health impacts suffered (Cockbain & Bowers, In preparation; Oram et al., 2012). Although labour trafficking victims share common characteristics and experiences, they should not be misconstrued as a homogenous group and individualised support is important too.

ReferencesAntal, I., & Laszlo, E. (2015). The Situation of Human Trafficking for Labour Exploitation in Romania.

Paper presented at the 2nd International Multidisciplinary Scientific Conference on Social Sciences and Arts, Albena.

Cockbain, E., & Bowers, K. (2018, 04/06/18). Applying data science techniques to human trafficking research. Paper presented at the United Nations on Drugs and Crime (UNODC) 4th International Conference on Governance, Crime and Justice Statistics, Lima, Peru.

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HCW0007Cockbain, E., & Bowers, K. (In preparation). Using case characteristics to predict human trafficking

type: a nationwide comparison of victims trafficked for sexual exploitation, domestic servitude and labour.

Cockbain, E., Bowers, K., & Dimitrova, G. (2018). Human trafficking for labour exploitation: the results of a two-phase systematic review mapping the European evidence base and synthesising key scientific research evidence. Journal of Experimental Criminology, 1-42.

Cockbain, E., Bowers, K., & Vernon, L. (Forthcoming). Using law enforcement data in trafficking research. In J. Winterdyk & J. Jones (Eds.), The Palgrave International Handbook of Human Trafficking. Basingstoke: Palgrave Macmillan.

Jokinen, A., & Ollus, N. (2011). Trafficking for forced labour: Project Summary and Conclusions. In A. Jokinen, N. Ollus & K. Aromaa (Eds.), Trafficking for forced labour and labour exploitation in Finland, Poland and Estonia (pp. 312-323). Helsinki: HEUNI.

National Crime Agency. (2018). Modern Slavery and Human Trafficking: National Referral Mechanism Statistics Annual Report 2017. London: National Crime Agency.

Oram, S., Ostrovschi, N. V., Gorceag, V. I., Hotineanu, M. A., Gorceag, L., Trigub, C., & Abas, M. (2012). Physical health symptoms reported by trafficked women receiving post-trafficking support in Moldova: prevalence, severity and associated factors. BMC women's health, 12(1), 1-9.

Rijken, C. (2011). Challenges and Pitfalls in Combating Trafficking in Human Beings for Labour Exploitation. In C. Rijken (Ed.), Combatting trafficking in human beings for labour exploitation (pp. 393-424). Nijmegen: Wolf Legal Publishers.

Unseen. (2018). Modern Slavery Helpline: Annual Assessment 2017. Bristol: Unseen.

May 2018

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HCW0008

Written evidence submitted by the Rights Lab, University of Nottingham

1 Introduction

1.1 The Rights Lab is a University Beacon of Excellence at the University of Nottingham. It brings together more than 100 researchers from all faculties of the University to focus on the eradication of global slavery to support the United Nations’ sustainable development goal of complete abolition by 2030. It is home to the world’s leading experts in contemporary slavery, and brings together different faculties, disciplines and cutting-edge research tools and methods across the university to create recipes for solutions to this critical problem. In collaboration with the Independent Anti-Slavery Commissioner, we are currently aiming to develop a better understanding of the nature and prevalence of labour exploitation in hand car washes in the UK, and establish a stronger foundation for research and intervention in the sector.

Authors: Dr Akilah Jardine, Rights Lab Research Associate, lead researcher on labour exploitation in hand car washesDr Alexander Trautrims, Lecturer in Supply Chain and Operations Management, project lead ‘the unchained supply’ Dr Alison Gardner, Assistant Professor of Local Governance and Anti-Slavery Policy

1.2 We are submitting responses to the following questions:

How have hand car washes developed over the past decade? What impact has this had upon the wider car wash industry?

What can the Government do to ensure that they meet their commitment to “decent work” under Sustainable Development Goal 8 in the hand car wash industry?

What proportion of hand car washes are thought to be exploiting workers? Is there a clear link to human trafficking?

How has the 2015 Modern Slavery Act worked in tackling the problem of slavery in the industry?

1.3 Key points:

1.3.1 Hand Car Wash (HCW) is not an illegitimate business activity. Furthermore, not all HCWs are unregulated and violate labour, employment, health and safety, and environment regulations.

HCW businesses provide a largely commoditised service that competes predominantly on costs and convenience of access. The commercial rationale for undercutting labour standards is sufficiently systemically dominant to be leading to widespread practices of undercutting labour standards and other regulation.

1.3.2 While there have been reports of workers being referred into the National Referral Mechanism as potential victims of human trafficking and modern slavery, and separately, instances of exploitative conduct in HCWs such as lack of breaks, and below national minimum wage payments, not all exploitative conduct will meet the threshold for human trafficking and modern slavery. Moreover, though commonalities may exist in cases of labour exploitation, the degree of such factors varies across HCWs.

It must also be highlighted that many victims who are offered referral to the NRM declined the option as they may not feel exploited, in subjective comparison to labour and pay conditions in their home countries.

1.3.3 The unregulated nature of HCWs, the absence of adequate licensing, the hidden nature of labour exploitation, and lack of an understanding of this growing phenomenon, largely contribute to the challenge in assessing the number of HCWs that are thought to be exploiting workers.

As HCWs are not licensed, the data basis for accurate analyses of the sector and its workforce is not sufficiently comprehensive. Although some data exist about HCWs operating on the premises of larger (mainly retail) businesses, it can be assumed that the majority of HCWs are not covered by these data sets.

1.3.4 The Modern Slavery Act 2015 (MSA) has fallen short in bringing attention to labour exploitation in HCWs. The MSA only brings companies with a turnover of £36 million or more into scope. Typically, HCW businesses do not reach this threshold as the sector is highly fragmented.

The fragmentation of the sector, in combination with commoditisation of the service and the absence of licensing leads to systemic structures that are fostering the exploitation of workers and in many cases lead to modern slavery.

Furthermore, HCWs are not picked up by corporate risk management systems of companies that are in-scope of the MSA as the spent on HCW is a relatively minor expense and usually no formal relationships are established with the service providers of HCWs.

1.4 Key Recommendations:

1.4.1 There is a need for a system to register and license HCWs to ensure compliance, and monitoring and enforcement of relevant regulations. The proposition that HCWs would improve conditions based on brand reputation considerations is not feasible for independent HCWs.

1.4.2 The government needs to address consumer behaviour that has fuelled and normalised unlawful labour practices in HCWs by increasing awareness. This will also improve the intelligence provision from the general public to law enforcement as bad labour practices will become more clearly distinct from normal practice.

1.4.3 Establishment and promotion of platforms to engage workers and educate them on their rights, particularly vulnerable workers such as migrants and agency workers. More robust legislation and enforcement against the use of inappropriate use of employment types, for example false self-employment.

1.4.4 Multi-agency partnership with local actors, including local authorities, law enforcement bodies and civic leaders, particularly those who share the same nationality as workers, should be encouraged and resourced to tackle labour exploitation in HCWs.

2 How have hand car washes developed over the past decade? What impact has this had upon the wider car wash industry?

2.1 Prior to 2004, the presence of Hand Car Washes (HCWs) were virtually non-existent (Clark and Colling, 2017). Now they have sprung up on the side of the road, petrol stations, disused forecourts, and in supermarket car parks. Such an industry offers a competitively low-cost alternative to its automatic counterparts as they are easy to establish and often utilise cheap and unskilled labour, predominately migrants originating from Eastern Europe.

2.2 Over the last 15 years, Automated Car Washes (ACWs) have significantly declined, struggling to compete with the low-cost alternative. The Petrol Retailers Association (PRA) suggests that HCWs now make up more than 70% of the market share of the sector (Petrol Retailers Association, 2018). It must be emphasised that HCWs are not illegal business activities, but nevertheless, it is reported that as many as 20,000 are

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unregulated and are non-compliant in environment, health and safety, and employment regulations (Car Wash Advisory, 2018).

2.3 Though in violation of a number of regulations, unregulated HCWs have become normalised as they are used by suppliers, and landlords who rent spaces to them.(Clark and Colling, 2017). Moreover, the regular use of HCWs by the general public has contributed to the growth and acceptance of such unregulated practices. On the other hand, in some instances, the scarcity of ACWs may leave customers with no other choice but to use the services of HCWs which may utilise unlawful business practices.

2.4 The increase in the number and use of unregulated HCWs, is also facilitated by poor regulation and lack of an understanding of this growing phenomenon. Though there are a number of regulations by which car washes should abide, and schemes they can voluntarily participate in, the UK lacks a system to enforce registering and licensing of these operations (Director of Labour Market Enforcement, 2018).

3 What can the Government do to ensure that they meet their commitment to “decent work” under Sustainable Development Goal 8 in the hand car wash industry?

3.1 In 2015 the United Nations established a 2030 agenda for sustainable development comprising of 17 goals with 179 targets. Goal 8 focuses on promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. Concerning decent work, target 8.7 calls on governments to take immediate and effective measures to eradicate forced labour, modern slavery and human trafficking, while target 8.8 highlights the importance of protecting labour rights, and promoting safe and secure working environments for all workers, including migrant workers and those in precarious employment (A/RES/70/1).

3.2 To ensure that they meet their commitment to “decent work” under Sustainable Development Goal 8 in the hand car wash industry, the UK government should adopt a number of measures:

3.3 Establish a system for registering and licensing hand car washes to ensure that such businesses are compliant with relevant protocols such as health and safety, national minimum wage, and working time regulations. Part of the problem in ensuring compliance of HCWs is the absence of data on the number and locations of HCWs in the UK, and lack of an understanding of their business models. The enforcement of regulations has therefore been inadequate as authorities struggle to gain traction on this new phenomenon. Ensuring that regulations are enforced also requires collaboration between agencies such as HMRC and law enforcement bodies, and the involvement of Local Authority regulatory services (Director of Labour Market Enforcement, 2018).

3.4 Support mechanisms that encourage HCW compliance by educating employers on labour and employment standards, the actions that they must take to comply with such regulations and the benefits of compliance.

3.5 Promote incentives and deterrents to influence business compliance. Positive incentives could include an industry certification or accreditation of compliance, such as the WashMark offered by the Car Wash Advisory Service. Deterrents to prevent employers from violating regulations can include targeted labour inspections, and the establishment of sanctions.

3.6 Engage workers in understanding their labour or working rights, including those susceptible to abuse, such as migrant workers and agency workers, and whistleblowing protocols. This should also include

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encouraging Local Authorities to partner with community actors who share workers’ nationalities and background, to help educate workers and raise awareness within their communities.

4 What proportion of hand car washes are thought to be exploiting workers? Is there a clear link to human trafficking?

4.1 Because of the unregulated nature of HCWs, the lack of licensing, and the hidden nature of labour exploitation, it is difficult to assess the proportion of HCWs that are thought to be exploiting workers. Operations and research carried out on HCWs have showed that in some instances, abusive employment practices are present, while others meet the threshold for more extreme forms of exploitation, such as human trafficking and modern slavery. Moreover, it should be noted that just because a HCW is deemed unregulated, that does not imply that the presence of exploitative labour practices are inevitable.

4.2 Common exploitative variables in HCWs include illegal employment, workers being paid below the national minimum wage (NMW), as little as £3 an hour, working up to 12 hours a day, 7 days a week, and being compelled to work in extremely poor or hazardous conditions, often with lack of protective clothing, gear and equipment. Further, some workers are reported to have been housed in derelict and unsafe accommodation with lack of adequate facilities, both on and off site, provided by car wash owners. For instance, in 2015 Sandu Laurentiu-Sava, a Romanian national, was electrocuted while showering in squalid accommodation adjacent to the car wash where he worked. In some cases, a percentage of the workers’ already low salary is deducted as payment for accommodation.

4.3 While common in many HCW operations, the presence of the above factors vary. Though an obvious violation of regulations, and exploitation of labour, assessment of intelligence on HCW indicates that such practices do not always satisfy the threshold for human trafficking and modern slavery, chiefly because some workers willingly accept this type of employment. Furthermore, some do not consider themselves as victims, or their situation analogous to slavery. For instance, their wages, though falling below the NMW, allows them the opportunity to send money back home to their families (GLAA, 2018). Separately, others may choose to work in HCWs to develop their skills to help move them up the job ladder, or because they are most likely to be employed due to the need for cheap labour, and also because HCWs were often known to be managed by migrants for migrants (Clark and Colling, 2017). While some may view HCW as a form of temporary work, it has been reported that others view it as a more long-term form of employment (GLAA, 2018). It must be underlined, that reports from car wash workers who claim that they are not subject to abuse, and are free to leave, have highlighted that such claims could be false, due to the level of control exerted by their employers.

4.4 Though some car wash workers willingly accept to work under such exploitative and informal conditions, there are others who are subject to more extreme forms of exploitation that prevents them from exercising free will to leave. There have been reports of passports and identification documents being withheld, threats of denouncement to immigration enforcement, infliction of physical abuse or threat of, and debt bondage to control workers. Between 10th October 2016 and 31st August 2017, Unseen’s Modern Slavery Helpline reported that out of 211 cases that made mention of car washes, the helpline received 112 (53%) of cases that concerned modern slavery (Unseen, 2017). According to its report, overall, there were 692 potential victims of human trafficking and modern slavery. Concerning referrals to the National Referral Mechanism (NRM), the UK’s process for identifying and supporting victims, the helpline made 99 referrals to law enforcement, 7 local authority child safeguarding referrals, 2 referrals to the GLAA, and 2 referrals to Non-Governmental Organisations (NGOs). Further, the helpline reported that it made 3 referrals to GLAA for potential labour abuse that did not satisfy the threshold for modern slavery.

4.5 Regarding human trafficking, the act of moving people for the purpose of exploiting them, there is limited evidence to indicate that individuals are being trafficked to the UK specifically to work in HCWs (GLAA, 2018). However, there have been reports of workers being moved across the UK to work in different HCWs (Ibid). Moreover, as HCWs appear to be run by migrants for migrants, reports have also indicated that some workers have been recruited in their country of origin through social channels.

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5 How has the 2015 Modern Slavery Act worked in tackling the problem of slavery in the industry?

5.1 The Modern Slavery Act, in emphasising the role of large corporate entities in combatting slavery in their business operations and supply chains, has neglected the role of smaller businesses, such as HCWs, in the regulation of slavery. The Act legally requires businesses with an annual turnover of £36 million or more to report on the steps they have taken, or have not taken, to combat slavery, and fails to acknowledge that smaller-scale operations can also be complicit in related human rights abuses, and violate labour, and health and safety regulations. As a result of not falling within the scope of the Act, operations such as HCWs do not have to report on the steps they are taking to ensure compliance in tackling slavery.

5.2 Moreover, though the Act has stimulated awareness around human trafficking and modern slavery, the continued presence and use of unregulated HCWs has represented acceptance and normalisation of informal labour practices. HCW is an industry where exploitation hides but also thrives in plain sight as the general and often unsuspecting public continue to utilise their services, as opposed to more regulated operations (e.g. those run by supermarkets) because of the considerably low prices offered.

5.3 A further shortcoming in the Act has been the lack of attention to local implementation and enforcement of anti-slavery policy. Although in many areas multi-agency operations are now being used to target potential sites of exploitation, such as hand car washes, these tactics have developed and spread organically over time, rather than through direction as part of a national anti-slavery strategy. Research conducted with local anti-slavery partnerships (Gardner, 2017) also shows that local multi-agency work also frequently lacks resources and co-ordination.

May 2018

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Written evidence submitted by Anglian Water Services Ltd.

Anglian Water is the water and water recycling provider for over 6 million customers in the East of England, extending from the estuary of the Humber in the North through to the Thames in the South, and from Lowestoft in the East through to the edge of Buckinghamshire and Oxfordshire in the West.

We welcome the opportunity to submit evidence to this inquiry. The Environmental Audit Committee is rightly raising questions about the often forgotten environmental impacts of this growing industry, and we are pleased to contribute to the debate.

Environmental Impact1. How does the environmental impact of hand car washes compare to that of automatic car washes? What steps have been taken to reduce their environmental impact and use water more sustainably?

Automatic car washes are almost always on petrol service station sites run by large companies such as BP, Shell and various supermarkets. These companies tend to be more environmentally aware and often have dedicated environmental roles within their businesses. This means that there is a greater understanding of environmental issues and, in particular, the discharge of trade effluent. As such, there are rarely any cases where discharges from automatic car washes are connected to the surface water sewerage system and trade effluent consents for discharge to foul sewer, a legal requirement prior to discharging, are usually applied for/obtained.

Additionally, companies running automatic car washes are much more likely to have installed interceptors on their sites which will prevent or limit the discharge of oil, fuel and solid material to the sewer. There is little or no impact on Anglian Water’s operations from a well run automatic car wash which discharges in compliance with a trade effluent consent. Some automatic car washes also engage in water reuse and recycling and, therefore, minimise their water consumption.

Conversely, hand car washes are often set up by individuals and tend to be located on old petrol service station premises or yards. These sites generally have interceptors in place, and they can have discharge points to surface water sewer or foul sewer. In some cases, we also find they can discharge directly into a watercourse. When a hand wash business applies for a consent to discharge to sewer, we ask for a drainage plan and provide guidance if we see incorrect sewer connections.

In terms of water usage, improved efficiency is likely to be driven by financial incentives and benefits for the hand car wash business, more than any other factor. Anglian Water do not do anything to target hand car washes specifically as we encourage responsible water use and water efficiency across all of our customer base.

In general, we see car washes as a low risk activity due to the nature of the chemicals and volumes of discharge in comparison to other trade effluent activities.

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2. What chemicals are used in hand and automatic car washes and in what quantities? How should they be disposed of? What are the effects of working with these chemicals on human health and the natural environment?

The Car Wash Advisory Service (formerly the Car Wash Association) states that hand car washes use lower grade or cheaper products to clean vehicles, like detergents, metal cleaner, and polish.

These materials should not be disposed of into foul or surface water sewers, or directly to a watercourse. Excluding the residual amounts from vehicle washing discharged to foul sewer in accordance with a trade effluent consent, these materials should be removed by a licenced waste carrier and transferred to a permitted waste management site for appropriate handling and disposal.

While the water industry regulate the ‘end of pipe’ aspect of hand car wash site through discharge consents, we have no powers to control what chemicals are used on site as part of their business operations.

3. What regulations are hand car wash operators subject to regarding their impact on the environment and the use of chemicals? Who enforces these? How effectively?

Hand car wash operators are subject to the trade effluent provisions in the Water Industry Act 1991 (Part IV, Chapter III, sections 118 to 141). Section 118 of the Act makes it an offence to discharge trade effluent to a sewer without the written consent of the sewerage undertaker, in the East of England, this would be Anglian Water. It also states that to obtain a consent, the discharger must serve written notice (an application) on the sewerage undertaker. This means that the onus is on the discharger to obtain consent and not the sewerage undertaker to make sure they have one. In our experience, very few hand car washes obtain a discharge consent prior to conducting business, this includes many hand car wash businesses which set up in supermarket car parks.

In addition to the trade effluent legislation in the Act, section 111 prohibits the discharge of certain substances to sewer, such as petroleum spirit. A hand car wash with no interceptor may be discharging residual amounts of petroleum spirit into the drainage network, and is, therefore, in contravention of this part of the Act and committing an offence. Section 111 of the Act also gives powers to the sewerage undertaker if a discharge is made which impacts on the carriage or treatment processes.

Sewerage undertakers regulate the discharge of trade effluent from hand car washes to public sewers. If a hand car wash operator is discharging, or wishes to discharge, directly to a watercourse then this permitting would fall under the Environment Agency’s regulatory remit.

4. What role should the owners of premises on which hand car washes are operated have in ensuring their environmental impact is minimised? What legal duties are they under?

Premises owners should ensure that the discharge is made to foul sewer only from a dedicated non-permeable area, and, in ideal circumstances, via an interceptor or silt-trap, in accordance with a trade effluent consent.

Trade effluent consents will include conditions regarding the nature of the trade effluent, the point of discharge and the chemical composition of the effluent which the discharger must comply with. At present, the owner or occupier of the trade premises may apply for the consent and there is no specific onus on either to take this responsibility.

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5. What further steps should be taken to minimise the environmental impact of car washes? How can run-off be managed most effectively? Are there less chemically intensive options available for car washes? How can water usage be minimised?

Better education amongst hand car wash operators surrounding the impacts of their operations on the natural environment and their obligations under UK law would help deliver benefits for the natural environment and consumers. Language barriers and transparency around business ownership are areas which might hinder the overall improvement of education about the impacts of hand car washes in the UK.

Sewerage undertakers have a role in ensuring that discharges are made to foul sewer. Likewise, the Environment Agency have a role where discharges are currently being made to a watercourse. However, any further efforts applied need to be balanced against the actual environmental risk and higher impact discharges from other sectors that require time and effort on the part of the sewerage undertaker.

The planning system is an area which can be utilised to minimise the environmental impacts of hand car wash business. Typically, hand car washes occupy the forecourts of former petrol stations and, as such, must require planning permission for a change of use of the site. This provides an opportunity to ensure the impacts of any proposals are considered before they are put in place.

In order to proportionate, we do not believe that we would need to be consulted on every application as this would be disproportionate in comparison to the scale of the issue, but there is potential for some standing advice to be developed alongside the Environment Agency.

May 2018

HCW0011

Written evidence submitted by Gangmasters and Labour Abuse Authority

Hand car washes inquiry – written evidence submitted by the GLAA

1 The GLAA has been asked to provide evidence to the Environment Audit Committee hand car wash inquiry. The Committee specifically called for evidence in relation to environmental impacts and sustainable employment practices.

2 The GLAA is the foremost agency with responsibility for the investigation of labour market breaches. Since May 2017 its operational remit has enabled it to examine labour market offences7, and allegations of forced labour across all industries including car washes, with additional police powers8.

3 The GLAA’s response focuses primarily on employment related aspects, and labour market enforcement, including modern slavery within the labour market. In providing this response we are also conscious of the recommendations in the recently published strategy from the Director of Labour Market Enforcement, that the GLAA should operate a pilot to test licensing of hand car washes. Our prevention activity addresses this point particularly. Key points are:

There are increasing referrals alleging exploitation of workers at car washes Not all allegations relate to forced labour Significant volumes of allegations are vague, and may arise from increased

media interest in hand car wash operations There are nonetheless some significant cases of serious exploitation under

investigation An effective investigation response requires multi-agency investigation with

other enforcement bodies An effective prevention approach requires the support of industry

stakeholders, which should reduce the burden on investigation

4 Our response is set out as follows:

Our knowledge (UK) Our Operational experience Our Prevention activity The position across the EU

Our knowledge

5 The GLAA recently published its annual assessment of the extent and nature of labour market exploitation and modern slavery. This provides our existing evidence base. In the report’s key judgements it says:

7 See Section 3(3) of the Immigration Act 20168 See Section 12 of the Immigration Act 2016

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“Outside of the regulated sectors, worker exploitation is most frequently reported within car washes.”, and

“The GLAA Intelligence picture suggests Modern slavery and human trafficking (MSHT) occurs across all sectors, but most notably reported in the car wash sector, with increasing reports in the construction and food service industries.”

6 The GLAA assessment provides a profile of the workers that are typical of those found in exploitative situations, which is considered to apply equally within the car wash industry:

“The GLAA intelligence picture suggests victims of modern slavery for labour exploitation are more likely to be male, of Romanian nationality and between the ages of 18-25 years of age. Potential exploiters are more likely to be male, Romanian and between the ages of 26 and 45 years of age. There is a relatively small increase in the number of Albanian exploiters reported, particularly within the car wash sector.”

7 The Modern Slavery Helpline annual assessment 2017 (page 51) reports that it received 194 calls to the helpline concerning treatment of workers at car washes, representing 27% of all calls it receives, and being the highest work sector recorded. Furthermore, that this position was reflected equally across all 4 countries of the UK. The Helpline concludes that the high volume of car wash referrals “… is likely to coincide with the public awareness of modern slavery highlighting potential exploitation in car washes”.

8 The GLAA has received approximately 297 referrals from the Modern Slavery Helpline (MSHL) during YTD 1st May 2018), of those 80 (27%) of the helpline’s referrals were linked to the car wash sector.

9 The breakdown of all referrals the GLAA has received concerning car wash operations is in Table 1.

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Table 1 Referrals regarding Car Wash sector YRD 1st May 2018

Source % (approx.)

MSHL 44.6

Partner Agency (including Police, HMRC, IE) 26.2

Crimestoppers 12.2

3rd party 7.8

Potential Victim 2.7

Industry 2.2

10 Overall, the GLAA has received 178 referrals from all sources relating to the car wash sector YTD 1st May 2018.

11 A significant number of referrals come from members of the public (directly or more often through MSHL or Crimestoppers) who may witness what they consider indicators of modern slavery. The public’s awareness of such issues has been raised by a number of articles in the media. The car wash sector is widespread and visible and therefore potential issues are more likely to be spotted and reported by the public than, for example, exploitation of workers employed in the kitchen of a takeaway.

12 The nature of issues within those referrals is set out in Table 2.

Table 2 Car Wash Allegations- 12 months to 1ST May 2018

Allegation Detail %*

No PPE Mainly from the public reporting workers wearing jeans and t-shirts (particularly in cold weather). No high-vis, boots, gloves or face masks also

mentioned.

26%

Vague information Mainly from the public reporting workers who appear unhappy, dejected, not talking to one another or

engaging with customers.

23%

National Minimum Wage

Information from the public stating workers not being paid NMW, as, for example, there are 4-5 washing one car for £3.

13%

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Also, some reports from workers and partner agencies with regards to what they are paid.

Withheld Wages Not being paid on time or receiving holiday pay etc. 6%

PAYE and Tax 4%

Physical & mental mistreatment

Includes shouting at workers, threats to family. 3%

Sleeping on site Includes duvets spotted in offices. 3%

Substandard accommodatio

n

Includes possible overcrowded houses 2%

Excessive working hours

Includes allegations of working 12 hour shifts 7 days a week, little or no breaks

2%

No contract 1%

Environmental concerns

Public reporting water not going down the drains and soap being poured into the street.

1%

No breaks 1%

Withheld ID Docs 1%

Control of movement 1%

Debt bondage 1%

No payslips 1%

Other 11%

* Approximations due to the way data is recorded.

13 Information received is triaged to identify cases of greatest risk, and relevance to the GLAA’s remit. Often these referrals can be rather vague and relate to workers appearing unhappy and/or not engaging in conversation with customers. Therefore, to date 62% of car wash referrals (from all sources) are recorded as “intelligence only/no further action”. Referrals may also relate to issues concerning partner agencies, predominantly NMW, within this sector. 10.6% were referred to partner agencies, of which 7% went to NMW. Others related to police led investigations into wider criminality.

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Our Investigations

14 Approximately 20% of referrals received progressed to investigation, or linked to an existing investigation. Over half of all referrals that lead to an investigation came from partner agencies. However, the information received led to 34 GLAA led investigations.

15 Twenty-five investigations into car washes commenced and concluded after the GLAA’s wider remit and powers became operational, between 01/04/2017–14/05/2018, for the reasons set out in Table 3:

Table 3 Investigation closure reasons

No offences disclosed 10Non GLA Offences Referred to other agency for

Investigation9

Intelligence only 2No action – Insufficient evidence 1No GLA value 1Tasking not progressed – Closed No action 1Not Progressed Insufficient Resources 1

Whilst investigations are closed as above the case study below illustrates the nature of more serious cases currently investigated.

Case study Joint investigation with Durham Police, led by GLAA into exploitation of Romanian and Latvian workers by Albanian car wash owners.

Allegations – deductions from wages to recover a £300 deposit, at £50/week; victims were told they were self-employed; no payslips or contract of employment provided; only hi-vs jacket for Health and safety. One victim left without notice and was told his deposit was forfeit. He returned to work for the company, and was required to pay another £300 deposit. Victims also reported threats of violence. All workers had been instructed to say they worked 40 hours/week. Despite being told they would receive the rate of £7.05 there was an understanding they would only be paid if “sufficient work was carried out”.

Search warrants were executed, two Albanian suspects arrested, and are currently on bail, and three workers have entered the National Referral Mechanism for formal assessment as victims.

16 Ongoing investigations where serious offences have been uncovered have resulted

in submission of three cases to CPS to consider prosecution. In another case jointly investigated with Derbyshire police 5 individuals are awaiting court hearings.

17 The completed investigations took 1384 working days to reach appropriate investigation outcomes (an average of 55.36 days per completed investigation). These investigations represent a resource cost of £286,685 (£11467/investigation).

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Recognising that criminal investigations are resource intensive, that serious allegations are increasing, as well as referrals for other labour market breaches, requires the GLAA to also invest in a Prevention approach, to ensure investigation resources are available and focused on modern slavery offences.

Our Prevention activity

18 The GLAA is engaged with a number of stakeholders with concerns regarding the operation of hand car washes. Some of those interests are focused on protecting workers; others from an environmental stance. The GLAA’s engagement seeks to coordinate and ensure activities are complimentary.

Table 4 Key stakeholders

Supermarkets who allow hand car washes on forecourts, and an integral partner in current prevention proposals

Petrol Retail Association Their members also have forecourt hand car wash operations

Church of England The Clewer initiative of the Church of England is currently developing an “app” which may assist in mapping car wash locations

Academia The Independent Anti-Slavery Commissioner (IASC) has commissioned research by Nottingham University to examine car wash activity. Nottingham Trent University has also been engaged in examination of the hand car wash business model. The GLAA has established links with the academics at both institutions and is working with them to establish how its activity, and their research can be mutually complimentary

19 The GLAA’s widened remit has enabled it to consider operational activity concerning allegations of exploitation at hand car washes. However, estimates of the volumes of hand car washes range between 10-20000. The GLAA recognises that though its resources have doubled focus on hand car washes could, itself, potentially utilise all of those resources. Consequently it is necessary to consider a preventative, and education campaign, to segment the market, driving up compliance where other levers could be employed effectively to create a pressure for compliance, whilst enabling operational resources to be available for the high priority allegations of exploitation.

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20 The GLAA therefore sought, and obtained, data on locations and activity of hand car washes on the forecourts of supermarkets to commence engagement with supermarkets to develop a prevention and education approach. The GLAA considered the pivotal role supermarkets can play to drive up compliance. This has led to the development of an approach with the supermarkets to create a code of practice, coupled with a regime to test compliance, with the potential for sanctions if a car wash does not meet the standards of the code.

21 The core group of stakeholders in the development of the code are the supermarkets, the Downstream Fuel association (which represents supermarkets), and Waves (a company that franchises hand car washes on Tesco sites). The Code covers legal standards to assess whether workers are exploited, including health and safety and pay issues, as well as environmental and insurance requirements. This holistic approach to hand car washes is designed to test levels of compliance. Where an audit is undertaken against the Code, and identifies significant failures, or continuing lower level failures, it is proposed that this could result in the removal of a hand car wash from a supermarket forecourt. It will also enable the GLAA to be involved in consensual inspections of car washes, separately from criminal investigation. Such inspections may equate to a cost of £517/inspection lasting 2.5 days.

22 This approach will be tested in the three regional areas, which may be expanded, s as a pilot area. Engagement with the Petrol Retail Association has been encouraging with the promise of their data to assist in expanding the pilot to include other petrol retail outlets where hand car washes operate from. Further phased expansion would be considered to include other sites, including recognised gym chains, where hand car washes are also active.

23 The Clewer initiative’s development of an “app” that will record the location of a hand car wash visited, will assist nationwide mapping of locations of hand car washes. This will further assist raising awareness, targeting of potential rogue operators, and application of the code of practice.

The EU position

24 The GLAA works closely with its EU counterparts to tackle labour exploitation, and has sought information from those contacts to assist the Committee with information on the existence of hand car washes in other European economies.

Table 5 EU partner responses

Country Response (including nationalities where known)

Belgium Most hand car washes operate from disused garages, warehouses disused petrol stations or empty parts of an existing

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petrol station. Most hand car washes are located along a major road. Most are single site operations. 351 localized hand car washes belong to 304 companies. Identified infringements: not declaring employment, illegal employment of foreign workers, or as self-employed persons, labour exploitation and no insurance against accidents at work.

Afghan, Pakistan or Indian employees are often dependant on the employer for accommodation. The employer provides a place to sleep and live, either at the workplace itself or in another building nearby the workplace. The accommodation is often in a very poor condition (no water, no or bad electricity) Such accommodation can be declared uninhabitable following investigation.

When the employees live in the building of the hand car wash, they are always available to work. As a result they work (too) many hours, often without being paid for it.

In 2014, the city of Antwerp drew up a police regulation on hand carwashes. In particular conditions are imposed for establishing a hand car wash in a residential area (e.g. at least 500 meters between different locations)

Croatia Hand car washes are as equally found as jet washes/ mechanical car washes. Croatian citizens are used. Accommodation is not provided. The nature of labour breaches is the same type and level as in other industries inspected.

Czech Republic Commonly, people wash their cars at home, or use the automatic car washes. The car washes are predominantly of the manual unattended variety with no employees present or doing the washing. In two inspections a Ukrainian and a Ugandan were identified. No further information exists regarding hand car washes.

Finland The number of hand car washes has been rapidly increasing in the largest cities in Finland during the last three years. The owners are usually migrant people who have residence permits in Finland and they own one or two car washes. The employees are mostly asylum seekers from Iran and Iraq (Kurds) in our area. Exploitation has not been identified in 20 inspections by the labour inspectorate.

Germany Hand car washes have not been identified as a problem in Germany. In general washing of vehicles on private land is only permitted if the resulting wastewater does not enter the sewage system or an open adjacent water body, but seeps off on the property itself. Chemical cleaning agents are prohibited, and vehicle washing in water protection areas is generally prohibited.

Lithuania This is not an identified issue, but recognising the issue in other EU countries the Lithuanian authorities commencing work to establish whether there is any evidence of a growing industry.

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Netherlands In the Netherlands hand car washes is a phenomenon that hardly exists. Our criminal investigation department had one criminal investigation concerning hand car washes.

Local town halls are extremely active in the application of environmental legislation. We expect the waste water problem of hand car washes is serious enough to act for a local town hall.

Poland There are few hand car washes operating in Poland, because drivers more often use car washes owned by oil and gas companies (Automatic, self-service car washes are also quite popular). We have not noticed a significant increase in the number of hand car washes, employing individual workers. Such car washes may be established in response to the slowly rising number of purchased expensive/luxury cars, and expanding road networks. We have noticed an increase in the number of employed foreigners in other economic sectors (e.g. Ukrainian).

Portugal It has increased moderately. The price for such service is higher compared with the mechanical car washes so the demand hasn’t increased. There are no legal barriers. Breaches often relate to health and safety and employment contracts.

Republic of Ireland Hand car washes are an increasing phenomenon but still a minor element in the overall sector, they operate from all sites but there is a correlation between the condition and location of the site and the degree of risk of non-compliance. They appear to be both independent operators and sites connected to particular persons (but with claimed different owners). Mostly operated by Romanian nationals and workers, with other Eastern European nationals working in them to lesser extent. A number have been prosecuted for law breaches. Investigations are being carried out in relation to forced labour legislation. Anecdotally some owners provide accommodation and transport to workers. Workers are transported between different sites during the week

Slovenia Car washes are supervised in the same way as all other companies in Slovenia. In Slovenia, car washes are mainly on petrol stations and mechanical workshops and services. There are also car washes where customers clean their cars personally. In the period from 2012 to August 2014, fewer cases of undeclared work were found. In the period from 2012 to 2018 we inspected approximately 48 companies involved in car washing. The violations found were mainly related to the payment of wages, annual holiday leave, violations of working hours and to violations in the field of occupational health and safety (for example: workers do not have adequate work clothes, no medical examinations, no proper training for safe work).

Spain No investigations have been conducted by the Guadia Civil. The hand car washes are not popular, because they are expensive. Also they are heavily regulated by local/municipal ordinance, because of environmental reasons (the use and disposal of the

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water). In almost all the cities or towns in Spain, it is completely forbidden to hand wash your own car in the street, and the local police would fine anyone who washes a car outside an appropriate facility. Workers are frequently South American.

Sweden The Swedish authorities believe that it is a growing market and the border police have cases where the employees do not have a work permit

Switzerland No hand car washes; strict regulation

25 The GLAA will be happy to answer any questions in relation to this submission if the Committee would find that helpful.

May 2018

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Written evidence submitted by the Petrol Retailers Association and the Car Wash Association

Introduction

PRA is the UK’s leading independent fuel retailers’ representative body, representing over 70% of the UK’s total number of fuel retail sites. Members range from small rural facilities to larger convenience retail outlets and motorway service areas. PRA represents the interests of 90% of the Top 50 Independent forecourt owners/operators. The PRA is an association of the Retail Motor Industry Federation (RMI) which has been representing the automotive industry for over 100 years.

In addition to supplying high grade petrol and diesel fuels essential to economic growth, our members look to provide cost effective and environmentally sound services to the motorist, such as compliant automated car washes and fast electric charging points.

We are working with the Government to help the motorist drive forward into a clean energy future.

As part of our outreach we represent the Car Wash Association and its members, to government and the civil service.

Executive Summary

Over the past 15 years, low-cost, unregulated Hand Car Washes (HCWs) have sprung up on disused petrol station forecourts, on empty brownfield sites and on car parks operated by the large, out-of-town, national retailers, especially grocery supermarkets, DIY sheds, garden centres, and some pub car parks.

There are estimated to be more than 20,000 unregistered HCWs in the UK accounting for over 80% of the UK car wash industry by volume, and these car washes are often controlled by gangmasters, in many cases employing modern slaves.9

Evidence suggests that a majority of small, low-volume HCWs would not be financially viable if operated in a legally-compliant manner, suggesting widespread tax evasion.

This has also led to the suspicion that other (illegal) activities are being conducted on these sites such as money laundering and drug dealing - for which the HCW is merely a front. Discoveries of large sums of cash and Class ‘A’ drugs made during Police raids on numerous HCWs across the country in recent months have proved these suspicions well-founded.

There are also clear indications that HCWs are causing potentially major environmental damage across the country, including evidence compiled by the Environment Agency through its Coventry Car Wash Campaign in 2014.

This damage includes the widespread use of highly corrosive chemicals which are being improperly disposed of and a general mishandling of trade effluent: polluting the water table and ground water; and leading to an increased risk of flooding in key areas through dead streams and the silting of drains.

Recommendations

9 http://www.telegraph.co.uk/sponsored/lifestyle/modern-slavery-britain/11186036/everyday-crime.html

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A concerted effort is needed to better identify the number of unregulated HCWs across the UK, currently estimated to be between 13,000 and 20,000+ by Police, the Gangmasters and Labour Abuse Authority (GLAA) and others. These are considered by many to be conservative figures.

Government should fund an independent physical survey to provide an up-to-date and accurate assessment of the scale of the HCW industry nationwide.

The Department for Environment, Food & Rural Affairs together with the Environment Agency, should either use its existing powers more aggressively or adopt new and more readily enforceable guidelines such as those used effectively in Scotland, to address the environmental damage being caused by unscrupulous HCW operators causing pollution across the UK through failing to meet minimum standards on the disposal of harmful effluent and the safe handling of highly corrosive chemicals.

An inter-departmental initiative should be launched to ensure that HCWs meet their tax obligations, particularly around business rates, VAT, National Insurance and Corporation Tax.

An HCW licensing regime should be introduced to address “unmetered activity” and ensure minimum standards across the full range of business, health and safety, and environmental regulations are being met. The PRA and the CWA feel that the most effective way to regulate and control HCW operators is by paid-for licensing. These licences should be issued and monitored by Local Authorities, who would collect and keep appropriate payment for their administration costs.

A single Secretary of State, or Minister, should be appointed to lead on the HCW issue and address inter-departmental shortcomings by coordinating action to tackle it across the relevant departments and agencies.

Key Issues

Development of the Industry

Between 13,000 – 20,000+ HCWs are estimated to be operating within the UK, with estimates varying across different government agencies and those produced by the industry. Many commentators believe even the higher end of these figures to be conservative, with the actual number higher still.

The HCW industry has seen rapid growth over the past decade, now forming approximately 80% of the UK car wash industry by volume. This increase has been at the expense of the Automatic Car Wash (ACW) sector, which has seen its site numbers drop by over 1100 in the decade up to 2016.10 This move towards HCWs represents a significant shift in the industry towards what the World Bank has termed the “informal economy”11 or as Professor Mike Haynes has put it, the “cash-in-hand economy”, where there is no record of the VAT, national insurance and tax that is being paid and passed on12. In contrast to the ACW sector, HCWs are very often partially or fully outside government regulation, taxation and observation.13

10 See Appendix A11 http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTSOCIALPROTECTION/EXTLM/0,,contentMDK:20224904%7EmenuPK:584866%7EpagePK:148956%7EpiPK:216618%7EtheSitePK:390615,00.html12 http://theconversation.com/the-return-of-the-hand-car-wash-and-the-uks-productivity-puzzle-3959413 Op. Cit. World Bank

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As we outline more fully below in the section on Sustainable Employment Practices, analysis by the ACW industry and independent academics indicates that it would be impossible for many HCWs to charge the extremely low prices that they do while also ensuring compliance with their legal obligations on tax, employment and business regulations, health and safety and the environment.

The unregulated, “cash-in-hand” basis on which HCWs have seen such rapid growth has had serious implications by reducing the number of legitimate businesses operating in the car wash industry as a whole and distorting fair competition. Tax compliant and law abiding ACWs have seen their revenues decline, reducing both the taxes they might otherwise have generated for the Exchequer and the people that could have been employed legally through their businesses. There has been a commensurate knock-on effect on those equally legitimate, tax compliant businesses supplying the ACW equipment and right the way through the associated supply chain.

With ACWs being cleaner, using less water and more safely disposing of detergents, many academics regard the return in recent years to the inefficient, labour-intensive HCW model as “taking the economy backwards.”14 “They are part of the low-wage, low-productivity trap. Their proliferation in the UK shouldn’t be seen as merely a quirk of people’s preference for them over the machine wash”.15

It should be noted that HCWs are not prevalent in EU countries as environmental, tax and labour regulations are properly enforced. It is a peculiarly UK phenomenon which has mushroomed in recent years as our environmental and other regulators have turned a blind eye to the activity citing a lack of resource and other priorities.

Recommendations

A concerted effort is needed to better identify the number of unregulated HCWs across the UK, currently estimated to be between 13,000 and 20,000+ by Police, the Gangmasters and Labour Abuse Authority (GLAA) and others. These are considered by many to be conservative figures.

Government should fund an independent physical survey to provide an up-to-date and accurate assessment of the scale of the HCW industry nationwide.

Environmental Impact

While we welcome what we see as the beginning of a better and more proactive approach to cooperation on the issue of unregulated HCWs across government, we continue to be disappointed by the lack of engagement from the Department for Environment, Food & Rural Affairs (DEFRA) and the Environment Agency (EA).

A crucial by-product of the lack of effective regulation of HCWs is the pollution of the surface water drainage system and groundwater that is now endemic across the UK as a result of HCWs not separating foul effluent, detergents, acids and other chemicals from water that can enter surface water drains. Equally serious is the widespread practice among HCWs of allowing car wash effluent to overflow and drain directly through porous tarmac or even into broken ground and then into the water table without ever being directed to any sort of drain.

Supermarket car parks are a common site for HCWs, yet past research has shown that none of the major supermarkets have installed foul water drains as their car parks were never originally intended

14 http://theconversation.com/the-return-of-the-hand-car-wash-and-the-uks-productivity-puzzle-3959415 Ibid.

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to accommodate HCWs. In addition, they allow HCWs to conduct their activities on porous asphalt surfaces (as opposed to concrete pads with foul drainage connections) that allow the effluent to seep directly down into the water table - which is even more harmful for the environment.

Despite making senior Ministers and officials at the Department aware of the issue through correspondence, and the Environment Agency itself discovering major pollution by HCWs operating in Coventry,16 the Department has so far been reluctant to play its part in properly regulating HCWs. It has claimed that it must take a supposedly “risk-based and proportionate” approach to the problem. We would argue that the risk warrants more aggressive intervention and the devotion of increased departmental resources to mitigate it.

DEFRA and the EA must ensure that harmful trade effluent produced by HCWs is disposed of appropriately, both with regard to ensuring that the correct (foul as opposed to surface water) drain is used and also with regard to the use of interceptors particularly in areas where there are still combined drainage systems that do not segregate the drainage of surface water from foul water.

These filtration systems on foul drain outlets separate oils and contaminants from wastewater before it enters the main sewage system. Both trade effluent that is allowed to enter surface water systems and unseparated effluent in foul water systems can damage the environment, pollute rivers, streams and groundwater. In addition, if these separators are allowed to fill up with sediment and are not regularly emptied and serviced, they overflow and become completely inoperative thus allowing the unseparated effluent to flow freely over them.

All such negligence constitutes an offence which can be prosecuted by the Environment Agency using its existing powers. However, while this regulation is carefully observed by legitimate Automatic Car Washes, there is widespread evidence it is not being observed by HCWs across the country and the EA is failing to enforce this clear breach of its guidelines.

This is in stark contrast to Scotland, where General Binding Rules legislation has allowed the prosecution of firms that did not direct harmful trade effluent into the requisite drainage system.17 Scottish officials realised in 2006 when PPG13 was introduced that the regulation would be virtually unenforceable owing to the very onerous requirement to provide evidence from downstream of the point of entry of harm having been caused to water courses, streams, fishes, beaches and the sea.

Scottish officials concluded quite correctly that it was self-evident that these toxic chemicals would cause environmental harm if allowed to enter a surface water drain and thus made it an offence merely to be seen to allow such effluent to enter a surface water drain. This has operated as a fair and highly effective deterrent. As a result, none of the large retailers in Scotland have allowed HCWs or trolley washes on their car parks unless proper provision for their activities has been made.

The Northern Ireland Environment Agency (NIEA), along with Scotland and Wales, have also adopted the PPG13 protocol leaving England the only such jurisdiction without this approach. Incidentally, the NIEA have also echoed our concerns over the use of potentially harmful chemicals by HCWs (set out below).

Recommendations

The Department for Environment, Food & Rural Affairs, together with the Environment Agency, should seek to serve polluting HCWs with Pollution Prevention Works Improvement Notices. Failure to comply with these notices is contempt of Court and an offence.

16 See Appendix B17 https://www.sepa.org.uk/media/34761/car_a_practical_guide.pdf

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Alternatively, the Department could press for the adoption of General Binding Rules (‘GBRs’) in place of the existing regulations in England and Wales, as they have implemented in Scotland with considerable success, where fines are levied on all hand car washes which do not dispose of their effluent into a foul drain to prevent the pollution of local water courses. Enforcement of the effluent regulations is greatly simplified under GBRs as any observable infringement of the regulation constitutes an offence.

DEFRA and the EA must also implement stringent checks to ensure that health and safety standards are being met in the handling of potentially harmful chemicals often used by HCWs, such as hydrochloric acid or “brick acid” which is in any case wholly inappropriate and dangerous for use in cleaning vehicles. These should include the stipulation that the correct protective clothing and equipment are employed, that the chemicals are safely stored and locked away, that staff are properly trained in their use, and that customers are made aware of any potentially harmful effects that the chemicals may have on either their vehicles or health.

Bringing HCWs into line with proper environmental standards would not only protect the quality of local water supply, but also impress upon unscrupulous operators that their activities must comply with the rule of law in the UK, form a key part of a more general drive towards enhanced scrutiny and hopefully deter them from other illegal activity in the running of their business.

Sustainable Employment Practices

The Petrol Retailers Association (PRA) and the Car Wash Association (CWA) believe that a crucial component in the fight against modern slavery must be more focused regulation of those industries which are known to employ slave labour.

The PRA and the CWA agree with Detective Chief Inspector Phil Brewer, the head of the Metropolitan Police’s ‘Modern Slavery and Kidnap Unit’, that Hand Car Washes (HCWs) are a growing concern when it comes to the employment of modern slaves and require greater legislative oversight.

Extensive research by academics confirms what our members have been saying for several years - numerous HCWs charging very low prices to consumers are “impossible” to run as an economically viable and legitimate business that compensates its staff sufficiently, meets basic employment standards, pays an appropriate amount of tax, complies with immigration law, adheres to environmental standards and fulfils its health and safety obligations.

Industry figures have attempted to analyse the business model of HCWs to assess their viability - estimating their ability to remain profitable, legally compliant and yet charge such extremely low prices. Each time they have found that the minimum price point to simply break even was significantly higher than the majority of HCWs were charging. Industry analysis from 2013 found that, for a typical HCW washing 15,000 cars a year, to meet standard business costs including staff salaries, rents and rates, chemicals/disposals an HCW would need to be charging £6 per wash excluding VAT. Instead, many HCWs are charging prices as low as £2.50, on which basis the business would be operating at a yearly loss of £52,500.18 More recent industry analysis by the legitimate hand car wash provider, Waves, places the break-even price point higher still at £6.74 (+VAT) for an outside wash and £10.70 (+VAT) for an in and out wash. From these figures it is easy to see why there is such unease amongst our members at the business practices of many HCWs across the UK and a suspicion that a large proportion of them are actively engaged in flouting the rule of law.

18 See Appendix C

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It’s clear to us that HCWs are very often acting as a hub for several forms of criminal activity, with modern slavery a potentially endemic component. According to figures compiled by the National Crime Agency, the number of potential slavery victims exploited in HCWs in the UK rose from just seven cases in 2012 to 30 in 201319, and these are only the ones who have been caught.

As the National Crime Agency’s Director of Vulnerabilities, Will Kerr, has warned, the widespread use of cheap car washes is helping to fuel modern slavery in Britain.20 His view is that, “If you’re paying a lot less than you would reasonably expect to pay for something, it’s usually because someone is being exploited in the background.”21

Bernard Hogan Howe, former Metropolitan Police Commissioner, estimates that about 30 percent of slavery in the UK is labour exploitation and that one of the biggest industries in which it is occurring is car washes.22 “Many of the workers are from other countries, paid low rates, and have large amounts taken out for overheads for living. They are left with very little… For some, their liberty is restrained by their passport being taken away.”23

This is borne out in research carried out by Dr Alexander Trautrims, Dr Thomas Chesney of Nottingham Business School,24 Professor Ian Clark, Professor of Employment Relations at the University of Leicester and Mr Trevor Colling of Kings College London25.

Dr Alexander Trautrims and Dr Thomas Chesney26, who have developed a new computer programme to enable government agencies to uncover businesses which are using slave labour, identified ‘cheap’ car washes as being ‘hives’ of modern slavery. They highlighted their employees as being poorly paid, provided with little or no protective equipment and made to work long hours without breaks.27

In their studies into HCWs, Professor Ian Clark and Trevor Colling found “widespread denial of employment status, avoidance of the minimum wage, and working time regulations.”28 On asking probing questions about the terms of employment for workers at these sites, they found, “Our efforts to discuss wages and terms and conditions proved difficult in all interviews and sometimes resulted in termination of the interview or aggressive responses… Eight interviewees across three forms of HCW stated that their wages were less than the national minimum wage rate.”29

They pinpoint the “permissive regulatory environment maintained by local authorities and private sector bodies such as… supermarkets” as the key factor in enabling HCWs to continue operating in this way and that without reform it is “unlikely that informal practices deployed in HCWs will be challenged”.30

19 Ibid.20 http://www.independent.co.uk/news/uk/home-news/cheap-goods-services-modern-slavery-nca-clothes-nail-parlours-food-national-crime-agency-a8143756.html21 Ibid.22 http://www.independent.co.uk/news/uk/crime/slaves-on-our-streets-hand-car-wash-exploitation-london-undocumented-workers-a7994151.html23 Ibid.24https://www.researchgate.net/publication/312588627_Agent_Based_Modelling_as_a_Decision_Support_System_for_Shadow_Accounting25 http://irep.ntu.ac.uk/id/eprint/31950/1/9360_Clark.pdf26 https://www.nottingham.ac.uk/news/pressreleases/2017/july/the-murky-world-of-the-hand-car-wash.aspx27 Ibid.28 Op. cit. Clark & Colling, 201729 Ibid.30 Ibid.

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Low-level crime and disorder creates an environment that encourages more serious crimes, as outlined in the “Broken Windows” theory of law enforcement. With basic obligations, such as paying their fair share of tax or safely disposing of harmful waste, not being enforced, HCWs are following this pattern and therefore it is unsurprising that they are increasingly being found to be responsible for much more serious criminality.

The regulatory shortcomings outlined above have been exacerbated by a lack of cooperation between relevant government departments and agencies, despite the issue straddling numerous departmental and agency remits. In some cases, this has been accompanied by a complete lack of proactive action from departments who, for all intents and purposes, don’t view the problem as a priority for them.

Recognising this, the Petrol Retailers Association and the Car Wash Association have held numerous meetings with a range of stakeholders who are concerned about this growing issue. These have included Labour Market Enforcement, the GLAA, Immigration Enforcement, the Association of Labour Providers (ALP), the Independent Anti-Slavery Commission (IASC), and the Church of England. Our discussions focused on pooling ideas and actions to identify the best ways of tackling infringement of employment and immigration laws, tax evasion, environmental breaches and money laundering by rogue HCW operators.

While we welcome the growing focus from the government on this important issue, including the announcement from the Treasury of further investment in HMRC to help transform the department’s operational approach to tackling the hidden economy and HMRC’s recent statement that the hand car wash sector “is a significant area of interest”,31 there is still a great deal of work to be done in joining the dots between different government agencies to tackle the problem effectively.

The potential cost to the Exchequer of inaction on HCW tax evasion is considerable. Industry figures compiled in 2013, using a highly conservative estimate of 10,380 HCWs operating across the UK at the time, put the potential lost tax revenue at £208 million per annum. As the estimated number of HCWs circulating in the UK is now at over 20,000 according to the Police Federation, this lost taxation figure can be scaled up pro-rata to £400 million.32 More up-to-date actual figures from Waves, which operates legally compliant HCWs, have estimated the amount lost in tax from unscrupulous HCWs to be higher still, in the region of £700 million - £1 billion.33 Recommendations

The most effective way to regulate and control HCW operators is by paid-for licensing. These licences should be issued and monitored by Local Authorities, who would collect and keep appropriate payment for their administration costs.

Local authorities should work together with the Gangmasters and Labour Abuse Authority, and other relevant government agencies, to ensure this system is properly enforced and monitored. It would be a legal requirement for such licences to be prominently displayed on every site thus enabling an officer from any of the above-mentioned stakeholders to prosecute or even close down any HCW failing to have obtained such a licence. Such a devolution of enforcement powers would also spread the load of monitoring and enforcement across a much wider network of responsible parties. These measures would also serve to protect the unsuspecting public from the unscrupulous and harmful practices of HCWs.

It is hoped that the scheme would receive widespread support across Government, in particular from the Director of Labour Market Exploitation (LME), the Employment Agency

31 See Appendix D32 See Appendix E33 See Appendix F

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Standards Inspectorate, the Gangmasters and Labour Abuse Authority (GLAA) and HMRC National Minimum Wage.

With an estimated 13,000 – 20,000 modern slaves in the UK and the growth of unregulated HCWs shown to be a key industry in which they are being exploited, this would be a revenue neutral and effective method to begin tackling the issue.

We recommend that there is a single Secretary of State or Minister responsible and accountable for bringing the relevant departments and agencies together to address the issue of inter-departmental shortcomings. It has been suggested that Victoria Atkins MP, Parliamentary Under Secretary of State for Crime, Safeguarding and Vulnerability, should fulfil this role.

An inter-departmental initiative should be launched to ensure that HCWs meet their tax obligations, particularly around business rates, VAT, National Insurance and Corporation Tax.

May 2018

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Appendix A

Industry Data on ACWs by Region

Region 2016 Car Wash Sites Jet Wash Units Automatic Wash Units Conveyor Wash UnitsENGLAND YES 3129 2748 1984 62NORTHERN IRELAND YES 224 240 70 0SCOTLAND YES 478 490 214 3WALES YES 296 277 130 13UK Total YES 4127 3755 2398 78

Region 2011 Car Wash Sites Jet Wash Units Automatic Wash Units Conveyor Wash UnitsENGLAND YES 3518 2949 2226 53NORTHERN IRELAND YES 246 274 84 1SCOTLAND YES 519 524 229 1WALES YES 307 284 132 6UK Total YES 4590 4031 2671 61

Region 2006 Car Wash Sites Jet Wash Units Automatic Wash Units Conveyor Wash UnitsENGLAND YES 4014 3236 2449 37NORTHERN IRELAND YES 358 387 107 2SCOTLAND YES 558 562 243 4WALES YES 349 306 142 0UK Total YES 5279 4491 2941 43

© Experian Limited 2017

AWR 2017

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Appendix B

Coventry Car Wash Campaign –The Environment Agency 2014

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Appendix C

Estimates on the economics of a typical HCW, Trade Effluent Practitioners Network, December 2013

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Appendix D

Letter from Rt Hon Mel Stride MP, Financial Secretary to the Treasury, 27 April 2018

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Appendix E

Industry estimates of HMRC’s lost tax revenues from HCWs, CWA, 2013

Wash and Income Assumptions (inc VAT where applicable)

Number of Sites 1 1 1 1 280 600 2,000 7,500 10,380

Annual Wash Volume 42,000 15,000 15,000 8,000 11,760,000 9,000,000 30,000,000 60,000,000 110,760,000

Calculated Number of full Time staff 10.0 4.4 5.3 2.5 2,800 2,639 10,543 18,825 34,806

Wash Income - Basic Prog £252,000 £76,500 £76,500 £36,000 £70,560,000 £45,900,000 £153,000,000 £270,000,000 £539,460,000

Wash Income - Additional Progs £4,200 £33,480 £55,320 £25,824 £1,176,000 £20,088,000 £110,640,000 £193,680,000 £325,584,000

Total Income £256,200 £109,980 £131,820 £61,824 £71,736,000 £65,988,000 £263,640,000 £463,680,000 £865,044,000

Fees Payable to Local AuthorityRates £4,399 £6,591 £2,473 £2,639,520 £13,182,000 £18,547,200 £34,368,720Planning Permission Fees £131 £263 £394 £263 £36,750 £157,500 £787,500 £1,968,750 £2,950,500Advertisement Consent Fees £80 £80 £80 £80 £22,400 £48,000 £160,000 £600,000 £830,400Building Regulation Fees £63 £63 £125 £150 £17,500 £37,500 £250,000 £1,125,000 £1,430,000Totals £274 £4,804 £7,190 £2,965 £76,650 £2,882,520 £14,379,500 £22,240,950 £39,579,620

Tax Payable to HMRCIncome Tax £8,483 £4,755 £5,407 £2,727 £2,375,182 £2,852,711 £10,814,211 £20,449,798 £36,491,903Employers NI £6,676 £3,631 £4,170 £2,068 £1,869,336 £2,178,748 £8,340,846 £15,510,405 £27,899,335Employees NI £5,680 £3,104 £3,560 £1,770 £1,590,469 £1,862,577 £7,119,257 £13,274,441 £23,846,744Insurance Premium Tax £121 £43 £53 £39 £33,880 £25,500 £105,000 £292,500 £456,880Totals £20,960 £11,533 £13,190 £6,604 £5,868,868 £6,919,536 £26,379,314 £49,527,145 £88,694,862

VAT on Income and Costs (if applicable)Sales Income £42,700 £15,214 £21,003 £4,482 £11,956,000 £9,128,340 £42,006,640 £33,616,800 £96,707,780Pre Trading Costs -£75 -£72 -£151 -£52 -£20,930 -£43,026 -£302,155 -£393,300 -£759,411Rent / Licence Fee -£2,000 -£2,453 -£3,098 -£610 -£560,000 -£1,471,800 -£6,196,720 -£4,572,000 -£12,800,520Electricity -£10 -£47 -£72 -£14 -£2,800 -£28,171 -£144,771 -£107,427 -£283,169Chemicals -£554 -£199 -£229 -£56 -£155,232 -£119,520 -£458,880 -£417,600 -£1,151,232Cloths, Mittens, Brushes, Tools -£840 -£249 -£516 -£104 -£235,200 -£149,400 -£1,032,480 -£783,000 -£2,200,080Maintenance -£440 -£160 -£224 -£47 -£123,200 -£96,000 -£447,000 -£351,000 -£1,017,200Underground Tank Cleaning -£124 -£148 -£38 -£74,640 -£296,680 -£282,600 -£653,920Marketing -£208 -£78 -£93 -£24 -£58,240 -£46,920 -£185,920 -£176,400 -£467,480Accounting -£312 -£117 -£139 -£35 -£87,360 -£70,380 -£278,880 -£264,600 -£701,220Stationery / Computers / Postage -£40 -£28 -£36 -£10 -£11,200 -£17,040 -£71,200 -£72,000 -£171,440Telephones -£80 -£57 -£71 -£19 -£22,400 -£34,080 -£142,400 -£144,000 -£342,880Totals £38,141 £11,629 £16,225 £3,474 £10,679,438 £6,977,363 £32,449,554 £26,052,873 £76,159,228

Corporation Tax £11,373 £3 £36 £18 £3,184,495 £1,738 £71,275 £137,588 £3,395,096

Total Exchequer Lost Revenues £70,748 £27,969 £36,640 £13,061 £19,809,451 £16,781,157 £73,279,642 £97,958,556 £207,828,806

£20,022 24.0%Average lost revenue per HCW = Total lost revenue as a % of UK HCW Market =

UK Exchequer Annual Lost Revenues

UK TOTAL

All UK Sites Average

Wash Type Trolley WashesHCW in Rollover

BayHCW in Old Petrol

stationsHCW Other Trolley Washes

HCW in Rollover Bay

HCW in Old Petrol stations

HCW Other

Single Site Average

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Appendix F

Industry estimates of HMRC’s lost tax revenues from HCWs, CWA, 2018(Based on data compiled by Waves – a legitimate hand car wash and valeting service)

Hand Car Wash (HCW) – Estimated Tax Liability 2018

Assume gross revenue of £200K/year (£575/day based on 350 days)

Vat at 20% £40,000

Labour PAYE and NI £20,000

Corporation tax £3,000 (8% of £40,000 net profit)

Business rates £5,000 ( RV at £15,000 with SBR)

TOTAL £68,000

Number of HCW across the UK could be at least 20,000 including car park trolley washing at grocery retailers, other multi-national retailers e.g. DIY, garden centres, council parks and sports venues.

SUMMARY

Even using a more conservative projection of 50% of the estimated annual tax liability per HCW at £34,000 the Government is missing out on between £700,000,000 and £1,000,000,000 tax revenue every year

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Written evidence submitted by the Car Wash Advisory Services Limited and the Sandu Foundation

1. Executive SummaryThere are those within the vehicle washing industry that would have you believe that faults with the industry lay firmly at the door of unregulated hand car wash sites, but this is simply not the case.

Unregulated vehicle washing is an issue, but only because it has been allowed to become one however, it is not the whole story.

A significant amount of ‘buck passing’ has been ‘played’ by council planning departments, the Environment Agency and water companies. It is not completely their fault, lack of awareness and budget cutting across the years, has resulted in organisations dealing with what they know, and can get off their desk quickly.

This has resulted in:

Environmental damage Forced labour Loss of revenue for the public purse.

Sites offering mechanical washing are also at fault as it was their complacency in failing to engage the consumer, who drove the public to look for an alternative vehicle washing solution.

A possible way forward:

Instigate the WashMark Accreditation or similar programme across all wash sites.

Put in place a working group who have ‘teeth’ to close unregulated wash sites who refuse to comply with legislation?

Stop the ability for hand car wash sites to continue to trade without planning permission in place, post first refusal and when retrospective planning has been applied for.

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As the industries only independent organisation who operate a no fear, no favour policy, the Sandu Foundation will be reaching out to all areas of the vehicle washing industry and inviting members from their organisations to work with us, but most importantly have their say on creating a vehicle washing industry fair for all.

The Sandu Foundation will be launched in memory of Sandu Laurentiu-Sava who died in the make shift shower room of the unregulated hand car wash at which he was working. Having investigated this case we are certain that had the WashMark programme been in place, his death could have been avoided.

2. The Car Wash Advisory Services Limited and the Sandu Foundation.

The Car Wash Advisory Services Limited was launched in 2014 and was a culmination of services that had been offered by WashMark Limited (formerly the Car Wash Association) and Create the Desire Limited, a marketing and investigation service specifically directed at the vehicle washing industry.

The Sandu Foundation (a not for profit organisation) will be formally launched on 9th June 2018 and will work with the vehicle washing industry to create a fair vehicle wash industry for all. Sandu Foundation makes no distinction between vehicle washing types. We require only that the company offering the wash service follows all UK and EU legislation and that the consumer is offered high quality vehicle washing.

All information supplied in this submission is based on a survey and investigation of over 400 vehicle wash sites. Our experience within the industry covers a broad spectrum working in both the mechanical and hand car wash markets, which collectively cover more than 18 years respectively.

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3. The rise of the hand car wash in the UK

Mechanical vehicle washes (both rollover and jet wash) first arrived in the UK in the 1970’s and were basic but highly convenient and by the 1980’s/90’s were seen on nearly every forecourt across the UK.

The only alternatives to using mechanical vehicle washes were for the customer to use a professional valeting service, (which was cost prohibitive) or to undertake the work themselves, which whilst many a car wash was washed on a Sunday afternoon it was not the answer for everyone and to that end the mechanical wash market lacked any real competition, which led in many cases to complacency.

Dirty wash bays, lack of investment in new equipment, lack of regular maintenance and staff training led to stories of damage to cars and so it continued.

By the early years of the noughties we started to see a challenge to the mechanical washing market by small hand car wash sites that were being set up by UK based companies. These were set up in car parks, public houses etc. and whilst they were not compliant they were also largely ignored by mechanical wash sites and government agencies as nothing to worry about.

Moving forward through the years to the current date we can see that the UK hand car wash market has grown largely unchecked (approx.19k) and where much of it is now owned by migrant groups/companies these would seem to fall into two distinct categories:

Individual/Group Aspirational – would be willingly to accept help if it was offered and was not cost prohibitive.

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Individual/Group with Criminal Intention - using a business model that includes criminal activities and would not welcome inspection.

Quantifying the total number of hand car wash sites in the UK is almost impossible as no formal research has to date been undertaken and because of the transitory nature of the industry it would be quite difficult to undertake. (Please see section 7)Current figures are based upon the 400 sites investigated by the Car Wash Advisory Services Ltd during 2014 – 2017 which have been extrapolated across the UK and which is anticipated as around 19K.

4. Effects on the Environment of hand car wash sites in the UK

The chemicals most used in vehicle washing are:

a. Shampoos and Foams made from a mixture of surfactants, with a small addition of sequestrants and acid or alkali. Foams also have colourants and dyes added for visual effect. The shampoos and foams perform essential tasks in the car wash process. Manually applied by hand washes with mittens or in a machine by brushes, they help to wet the car’s surface, lift the dirt and assist in keeping the dirt in suspension prior to rinsing thereby preventing re-deposition on the paintwork.

b. TFR (Traffic Film Remover) made from strong alkalis such as sodium hydroxide and a range of other highly reactive chemicals. These are powerful cleaners and are designed to be selectively sprayed by hand onto the dirtiest parts of cars, or used in a much-diluted form in the pre-soak cycle in some rollover car wash machines. They help to soften and loosen dirt, remove insect remains, and are particularly effective at cleaning oils and grease from paintwork. Available in a range of strengths, extremely strong caustic alkali Traffic Film Removers are in widespread use in the Hand Car Wash sector as they are both cheap and effective. Used incorrectly they can damage car paintwork.

c. Wax are complex formulations of many ingredients including cationic surfactants and a blend of oils, sometimes including silicon. The oils break

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down the film of water into droplets by increasing the water’s surface tension thereby making it easier to blow or wipe them from the car’s surface, leaving a gloss shine on the car.

d. Acid Wheel Cleaner made from very strong acids such as Phosphoric Acid, Hydrofluoric Acid and Hydrochloric Acid (often referred to as ‘brick acid’), these are dangerous chemicals. As they are relatively cheap and effective in removing stubborn brake dust deposits without any manual scrubbing, they are widely used in the hand car wash sector where operators are rarely seen wearing the recommended eye protectors, protective clothing and nitrile gloves to handle these chemicals. If they are sprayed onto the car wheels and the hot brake discs immediately behind them, the resulting fine mist or vapour can cause immediate choking and skin damage. Used incorrectly, they can also easily damage the wheels’ finish and corrode brake pipes.

Having asked on a number of occasions to see Risk Assessments and safety data sheets for chemicals both from the sites and their chemical suppliers, it would seem that many wash sites do not use COSHH compliant chemicals.

All of the above chemicals have the ability to damage the environment if not disposed of correctly, and where the chemicals are from unreliable sources this is certainly more of a concern.

Additionally, when the chemicals are mixed during the cleaning process with mud, break dust, fuel etc. they form solids. These when not disposed of correctly can combine with other fats and waste in the foul sewer/combined sewers, or leaves and other debris in surface drainage, and cause significant blockages.

Best practice for all forms of vehicle washing requires the wash site to have in place either a sludge trap, separator and or, an interceptor. (PPG13 2007, GPP13 2017). Show drainage plans, and be certificated to send their trade effluent to foul sewer. Where it is not possible to connect to foul sewer a collection unit should be used and all traps, separators and interceptors should be emptied regularly by a registered waste collector at periods determined by usage.

Unfortunately, in the mechanical sector not all interceptors are emptied regularly thus leading to blockages. However because mechanical washes, their housing and drainage require planning permission, the

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infrastructure is for the most part in place prior to the wash site opening thus reducing damage to environmental impact.

Hand car washing requires the same planning permission but will very often start trading prior to any planning being sought. Our research also shows a significant lack of understanding in many planning departments regarding hand car washing, with many simply allowing land, warehouses and old forecourts to be used simply as a change of use and without any concern for the environmental impact as it is “not their job”. However, under the National Planning Policy Framework environmental impact and the wellbeing of the community should be taken into account and this is very often ignored. We have examined a significant number of hand car wash applications and can see the applicants failed to understand the questions. With the question “will you produce trade effluent” many applicants regularly answered no, and a failure to show and understanding of the correct requirement regarding disposal of trade effluent. Despite this lack of clear understanding the planning is often granted by the planning department. Some planning applications are granted with conditions that are never met, as the planning department fails to check that they have been carried out. Some planning is granted without any conditions. This will often mean that the wash site is either illegally connecting to foul sewer or allowing run off of trade effluent into surface drainage.

Our investigations further show that many water companies have either no idea that a car wash has connected to their system without consent, or that again consent has been given without visiting the wash site to establish if a sludge trap/separator has been installed.

It should at this stage fall to the Environment Agency to step in to protect the environment, but we are able to show numerous cases where again there is lack of understanding and an historical reluctance to act.

The hand car washing phenomena seems not to exist in other EU countries because the EU Water Framework Directive has been instigated and is enforced.

Of the 400 sites investigated:

230 had no planning permission.

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104 had planning in place but with conditions not met. 40 were considered lawful and the council would not act. 300 had no permission to access the foul sewer. 11 were investigated by EA.

None of the above sites were considered by the Car Wash Advisory Service to reach UK environmental standards.

5. Modern Day Slavery on UK vehicle wash sites. Modern Day Slavery (MDS) exists in almost every form on UK vehicle wash sites. Whilst we have no proof that people are being trafficked to the UK specifically to work on hand car wash sites, we are aware of other forms of MDS taking place on UK car wash sites.

The worst cases involve debt bondage, forced labour and exploitation.

Very conservative estimates allow that 6 people would be working on a hand car wash, if they were paid the full living wage (please bear in mind that the majority of the work force would work 7 days per week), and the wash site washed (allowing for rain days etc.) 6 cars per hour it would be almost impossible to break even if working with a fully legal business model.

Our knowledge of the wash industry tells us that a worker is paid between £30 - £40 per day, which can be anywhere between 8 to 12 hours long, and from this they are made to pay for their living accommodation.

Many of the workers answer an advert offering work in the UK and have their flight paid for plus a commission for finding the work. Once in the UK, and usually speaking little or no English, they are sent to work at a hand car wash. They are given a mattress in a HMO at an inflated cost and must work off their bond, which given their low wage leaves very little money for food etc. and can lead to poor health.

Prior to 2014 we saw that most hand car wash sites were being run by migrant workers from Afghanistan, Iran and Iraq, and although our research shows that this is still the case in pockets across the UK, a major change has occurred since 2014 in the ethnicity of the migrant

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workers. We now see many EU Nationals (mostly Romanians and Bulgarians) now working on UK car wash sites, and whilst they have a right to work in the UK many do not speak English, are bonded and are not aware of their basic human rights.

6. Other effects of unregulated vehicle washing in the UK.

In 2014 we undertook a study of vehicle washing in Nottingham and were able to see that in addition to the environmental impact and that of the potential for modern day slavery other issues were also evident.

The cost to the public purse, which based on what we saw in Nottingham, would be in the region of £660,000,000 to £850,000,000 per annum.

This is made up of:

Business Rates Tax and National Insurance Employers National Insurance VAT on car wash sites Corporation Tax VAT on chemicals, uniforms etc.

Given that we have been asking for regulation to be imposed on all wash sites since 2007 it stands to reason that the loss to the public purse has been significant.

7. Making the vehicle wash industry fair for all.

There may be those who within the vehicle washing industry would call for the closure of all hand car wash sites, however this is not

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the position of the Car Wash Advisory Service or the Sandu Foundation.

We believe that UK consumers should have the option to choose how and where they wash their vehicles.

We do not believe for one moment that the UK consumer would knowingly support environmental damage or the use of Modern Day Slavery, but we also believe that there are consumers who rightly or wrongly do not trust mechanical wash equipment and to that end significant changes to the industry need to be made.

8. The Sandu Foundation and The WashMark Accreditation

The Sandu Foundation is a not for profit organisation that works with all types of vehicle wash sites to ensure compliance and quality of vehicle washing in the UK.

The Sandu Foundation was set up in 2017 in answer to the many issues that can be found in the vehicle washing industry.

The organisation is self-funding through membership and is also supported by profits from the Car Wash Advisory Service.

Using our WashMark accreditation, an industry wide certificate for quality and compliance, the UK consumer will at last be able to see which car wash sites are working within EU and UK legislation and help them make an informed choice.

The roll out of the WashMark will allow all wash sites the support they need to become compliant and offer excellent wash quality. I will also help Government Agencies to see which sites are fully compliant and those who are resistant. The Individual/Group Aspirational versus the Individual/Group with Criminal Intention.

The WashMark covers:

Environment: Trade effluent disposal/sourcing of water/spray

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Employment: Right to work/living standards/wages/accounts Insurance: Employers and public liability Planning: Application/permission/conditions met Health and Safety:

Risk Assessments for all site activity Equipment maintenance COSHH PPE Legionella Prevention

General business requirements. Quality of wash

If this was imposed at the planning permission stage and a car wash were not able to trade without the application being completed it would ensure that all car wash sites were compliant.

Wash sites applying for the WashMark retrospectively, would be given a structured time limit to complete the application process and The Sandu Foundation would support each site to reach their highest standard.

Once again this would be self-supporting.

Another aspect of the Sandu Foundation is to work with organisations who have a greater understanding of Modern Day Slavery, to ensure the safety, wellbeing, and education of workers from hand car wash sites.

The long term strategy of the Sandu Foundation is to encourage not only the accreditation of a wash site, but also the training and accreditation of hand car wash workers. Each worker can then freely move from site to site adding a further competitive nature to the wash industry.

By using the WashMark accreditation across all wash site, regardless or the style of wash, a high quality vehicle washing industry will emerge that is fair for all.

May 2018

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Written evidence submitted by the Downstream Fuel Association

1. The Downstream Fuel Association (DFA) welcomes the opportunity to contribute to the Environmental Audit Committees inquiry into hand car washes.

2. The DFA is a trade association representing companies involved in the wholesale and retail of fuels within the road transport, aviation and heating oil sector. Our members include major supermarkets which have an extensive network of forecourts across the UK, and greater than 40 % market share of all transport fuel sold in the UK.

3. Anecdotally, the number of car washes within the UK is thought to be in the region of 20,000. They are found in a variety of locations including petrol forecourts, garden and leisure centres, retail parks, pub car parks, trade dealerships and auctions, vacant petrol stations and disused land. The number of car washes associated with supermarkets is thought to be in the region of 500.

4. The 2018-19 strategy recently published by the Director of Labour Market Enforcement identified hand car washes as being at high risk of non-compliance across a number of areas, including labour market abuse.

5. Intelligence gathered from a range of stakeholders including labour enforcement agencies, the police and NGOs corroborates this position.

6. Areas of regulatory non-compliance include environmental, health and safety, tax, planning permissions, as well as the serious issue of the exploitation of workers and issues of modern slavery.

7. In recognition of these risks, and with the desire to drive up standards, the DFA has been working with a consortium of stakeholders to develop an Industry Code of Practice for the car wash sector.

8. The consortium is a partnership between industry, enforcement and regulatory bodies as well as NGOs working across the broad spectrum of areas which the car wash sector encompasses.

9. Members of the consortium have worked proactively with the Director of Labour Market Enforcement during the development of his 2018/9 strategy.

10.A partner within the consortium has developed a training video to upskill front line and investigating police officers on how to spot visible signs that

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may indicate exploitation of workers. This video is being disseminated through the Modern Slavery Police Transformation Unit.

11.Research, undertaken to support the video, has identified the breakeven costs for an outside wash and an “in and out” valet.

12.An outside wash takes about 18 minutes for an average-sized car. Paying the national minimum or living wage with statutory holidays and pension contribution, and adding in the price of the materials used, rent/rates etc, this comes out at a net cost of £5.73, giving a minimum breakeven price point, including VAT, of £6.88. For an ‘in and out’ valet, this would take 39 minutes at a net cost of £9.25 giving a breakeven price of £11.10 inclusive of VAT.

13.If a car wash is offering services below these rates it is considered that it can only be doing so in ways that may impact workers, such as by paying under the national minimum wage. Where this is identified it may identify an increased risk of labour exploitation in other ways.

14.Further details on the cost of a car wash can be found in Annex 1 of this submission.

15.We welcome the Director of Labour Enforcement’s recommendation that the Gangmasters and Labour Abuse Authority (GLAA) undertake a pilot scheme to test the feasibility and impact of licensing in the hand car wash sector as we consider that the broad objectives of that recommendation can be met and tested by the approach being developed by the consortium.

16.We would like to take this opportunity to inform the Committee of a significant piece of work that is currently underway which seeks to address the issues identified and to outline how we will work with the GLAA.

Industry Code of Practice

17.A Code of Practice (the Code) has been developed in partnership with landowners, the industry, NGO’s and the GLAA. Advice and guidance has also been supplied by the Environment Agency (EA), Health and Safety Executive (HSE) and Her Majesty’s Revenue and Customs (HMRC).

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18.The scope of the Code is wide ranging and encompasses general car washing practice, protection of the environment, health & safety, customer experience, financial transparency and corporate governance as well as workers’ rights, conditions and pay.

19.The Code will form the basis of the Responsible Car Wash Scheme (the Scheme) which will be operated by the DFA.

20.Significant progress has been made and the Scheme will be trialled in three geographical areas during Q4. It is anticipated that it will be ready for UK roll out in Q1 2019.

21.Working under the principle of joint responsibility, the Scheme will work with landowners to leverage influence through the supply chain, providing a mechanism by which landowners can choose a responsible service provider to operate from their land. We are in close dialogue with a wide range of stakeholders who have expressed an interest in engaging with the scheme.

22.The creation of the industry Code will be a significant step forward in helping to bring legitimacy to the sector, promoting compliance and raising standards through the dissemination of best practice. Importantly, it will also be a positive force for improving the working conditions of employees through upholding workers’ rights and conditions.

23.Accreditation to the Scheme is designed to demonstrate compliance with all regulatory requirements and best practice through continuous improvement.

24.Accredited status will allow customers to make responsible choices about which car wash provider they wish to use.

Working with the GLA

25.The recommendation of the Director of Labour Market Enforcement proposes that the GLAA operate a pilot licensing scheme. The GLAA recognises that with other legislative priorities facing Government alternative approaches ought to be trialled first. The GLAA therefore engaged with the supermarkets, initially seeking information of the locations and providers of hand car washes on supermarket forecourts, in August 2017, as an initial step towards its engagement with supermarkets as a potential lever to exercise supply chain pressure to build compliance.

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26.From our meetings with the GLAA it is clear that they see the value in piloting a scheme based on a code of practice, backed by the effective agreement of code signatories, to allow audits by the scheme operator, and the GLAA.

27.Where such audits identify significant non-compliance with the Code the ultimate sanction that may be applied by industry stakeholders is the removal of the hand cash operator from the site. However, our goal is to develop a compliant industry that is able to compete commercially on equal terms, but with the removal of rogue operators to support that level playing field.

28.Crucially the scheme operator will need to pass findings from audits to the GLAA, and other regulators. This will assist them in assessing the efficacy of the scheme, but also identify where they may need to target their investigative resources in high risk areas.

29.The DFA recognises that the powers of the GLAA mean that it also has a responsibility for investigating potential criminal offences in the labour market, including the forced labour offence. The nature of those enquiries will mean that it cannot share the details of such investigations with the DFA until such time that any resulting prosecution or other regulatory sanction has concluded.

30.Nonetheless, we believe the GLAA will be able to share trend data on the nature of non-compliance, and its assessment of those areas of the UK that may have the greatest levels of risk and problem cases. This will assist all stakeholders in taking a proactive approach in determining where to carry out audits. In turn this will also support stakeholders in developing their annual Slavery and Human Trafficking statement, as required under the Modern Slavery Act 2015.

31.Whilst the GLAA could not provide the scheme with details of ongoing criminal investigations we consider that the same would not apply to any audits that may be undertaken by the GLAA against the code.

32. Although the GLAA has the power to undertake criminal investigations into allegations of labour market breaches which may occur at car washes, it does not have a statutory compliance inspection power similar to the inspection power it operates in the industry sector it licences. Therefore the code would provide for that right of access when undertaking an audit. Furthermore, any audit undertaken by any organisation would need to be made available to the land owner if the land owner was going to be able to make decisions on whether the hand car wash should continue to operate from its land.

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33.The DFA considers that the operation of the Code and Scheme, initially operating in a pilot area, and, within the pilot area, commencing with supermarket locations will create a pressure for compliance that will ripple out to other parts of that industry.

34.We expect that members of the Petrol Retail Association, who also allow hand car washes to operate from their forecourts will follow suit. We have been encouraged by the PRA agreeing to provide the data from their members of where hand car washes operate in the area chosen for the pilot.

35.As the pilot builds momentum we will look to include and encourage other business, such as gym chains where hand car washes are known to operate from, to join the scheme.

36.Where possible, the Scheme will look to work in partnership with other initiatives that are working to eliminate the exploitation of workers. The Scheme will work with the NGO Unseen and promote the Modern Slavery Helpline.

37.Whilst we recognise that the Scheme will not solve the problem overnight we consider it is a good start. There will remain those rogue operators that may exploit workers, harm the environment, or breach other regulations, and those operators should expect the full weight of the regulatory authorities to tackle them.

38.However, the developing intelligence of where car washes are, and increased compliance by supporters of the Code and Scheme, should support the ability of regulatory bodies such as the GLAA to have an increasingly focused targeting of non-compliant rogue independent operators.

We are happy to expand on any of the points made in this submission and we remain committed to working collaboratively with you in the future.

May 2018

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Annexe 1 – Estimated Cost of Hand Car-wash This cost is based on 200 cars per week of average size. Regional variations and commercial sensitivities may apply. 35hrs per worker at NLW, 25+ yrs old, with statutory pension. No vehicle movements or productivity calculations included.

Outside only wash In and out wash (mini valet/Gold)

Wash, TFR, Shampoo, Rinse, Leather

As outside, plus vacuum, inside glass and wipe dashboards

Average time to complete (total minutes) 18 39

£ £

Apr-18 Apr-18 DIRECT COSTS

Labour cost inc. hourly rate, pensions etc. (no vehicle movement) 2.81 6.09

Water 0.06 0.06 Elec 0.08 0.16 Chemicals 0.16 0.21 Consumables 0.01 0.02 Maintenance 0.06 0.08 Rent (highly variable, average amount assumed) 0.9 0.9 SUB-TOTAL 4.08 7.52

OTHER (HIDDEN) COSTS

Rates (based on £15K RV and small business rates relief) 0.45 0.45 Insurance 0.17 0.17 Supervisor/manager 0.75 0.8 Trade effluent 0.03 0.03 Uniforms 0.02 0.03 Internet 0.03 0.03 Mobile phone 0.01 0.01 Credit card charges 0.03 0.04 Bank charges 0.04 0.05 Accountancy/payroll/legal 0.12 0.12 SUB-TOTAL 1.65 1.73

TOTAL COSTS 5.73 9.25

COST PLUS VAT 6.88 11.10

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Written evidence submitted by the Association of Convenience Stores

1. ACS (the Association of Convenience Stores) welcomes the opportunity to respond to the House of Commons Environmental Audit Committee’s inquiry into hand car washes. ACS is a trade association representing 33,500 local shops across the UK, including fuel retailers. Our members include Motor Fuel Group, MRH, HKS Retail, Rontec and thousands of independent fuel retailers. There are over 8,000 forecourts across the UK, making up 17% of the convenience sector. The forecourt sector provides 109,000 jobs across the 8,000 sites across the UK. For more information about ACS, see Annex A.

2. ACS welcomes the Environmental Audit Committee’s inquiry into hand car washes. 51% of petrol forecourts have car washes, with the majority being jet car washes (27%), followed by automatic car washes (25%). Only 5% of forecourts have hand car washes on their site.34 The hand car washing market includes many small operators on car parks and pieces of vacant land. Where these operators breach environmental or employment regulations, these should be enforced. ACS supports in principle the introduction of a licensing system for hand car washes. In considering such a system, we encourage the Committee to first assess how existing regulations could be more effectively enforced, and what additional benefits a licensing system could bring. Specifically, any new measures must be sure to tackle illegal hand car wash operators rather than simply applying additional costs on businesses that are already complying with the relevant regulations.

3. Where hand car washes are located on forecourts, many will generally be compliant with environmental regulations because of the extensive requirements placed on forecourt retailers not to contaminate the groundwater with fuels sold on the site. A number of fuel retailers have transitioned from rollover car washes - mechanical car washes where roller brushes clean the vehicles - to hand car washes in order to remain competitive. This means that the appropriate drainage infrastructure remains in place on the forecourt for a hand car wash to operate. Forecourt retailers lease the space on their sites to third party businesses rather than directly employ members of staff to carry out hand car washing.

4. Where hand car washes operate on forecourt sites these are usually leased to a third-party operator with a contract outlining the terms of service for how they operate. We do not have extensive research on employment practices in relation to hand car washes, but we urge the Committee to review recent research completed by the GLAA35.

5. Please see below for ACS’ response to the relevant questions.

Development of the Industry

How many hand car washes are currently in operation in the UK? How many people are employed by them? How have hand car washes developed over the past decade? What impact has this had upon the wider car wash industry?

34 ACS/HIM 201735 The Nature and Scale of Labour Exploitation across all Sectors within the United Kingdom

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6. A small number of fuel retailers (5%) offer hand car washing at their sites, this is equivalent to 422 forecourts across the UK36. The growth of hand car washes at forecourt sites is due to fuel retailers moving away from rollover car washes because of the increased costs of operating these services. The Car Wash Association estimate that in total there are between 10,000 to 20,000 car washes across the UK, hand car washes located on forecourts therefore represent a very small part of the hand car wash sector37.

7. Where forecourts host hand car wash services, the space is typically leased by the forecourt owner to a third-party operator. Many fuel retailers have contracts in place with their tenants.

8. Given the scale and nature of hand car washes on forecourt sites, we do not have details about how many people are employed by hand car wash businesses. It is important to note that in the instances listed above, employees of hand car washes are not directly employed by forecourt owners.

Environmental Impact

How does the environmental impact of hand car washes compare to that of automatic car washes? What steps have been taken to reduce their environmental impact and use water more sustainably?

9. Where forecourts have transitioned from a rollover car washes to a hand car wash, the drainage facilities are the same. ACS’ forecourt members suggest that draining infrastructure will already be in place where hand car washes are operating on forecourt sites. The contaminated water either flows to a foul sewer directly (with consent from the local authority for drainage) or goes through an inceptor then through to a foul sewer.

10. If a hand car wash on a forecourt does not have the correct drainage, it is unlikely that the contaminated water would enter groundwater or surface water drainage as forecourts have separate drainage systems in place to prevent fuel contamination in groundwater. However, if detergent entered these drainage systems, they would interfere with forecourt oil interceptors. Forecourt retailers look to avoid these problems by only allowing hand car washes to operate in the designated washing bay with the correct drainage.

11. Most hand car washes are not located on forecourt sites. Some will operate on purpose built or converted premises with drainage facilities similar to those on a petrol forecourt site. Hand car washes operating on land without specialist drainage facilities are likely to be the least professional operators, flagrantly breaching the law by not having appropriate drainage facilities. Other hand car washes operate on large car parks, often next to supermarkets or other large retail sites. These sites are unlikely to include appropriate drainage facilities.

36 ACS/ HIM! Data 2017 37 EAC Committee Hand Car Wash Inquiry Page

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12. Much hand car washing is carried out by car owners at their homes. It should be noted that in these instances, chemicals used in car washing enter surface water drainage or groundwater.

13. The environmental impact of different types of car washing services is not a function of whether they are hand car washes or automated car washes, but of the drainage facilities they install. We have illustrated how these different models impact the environment in Annex B. Regulated car washes, depicted on the left of this illustration, would include all automated car washes, hand car washes on petrol forecourt sites, and professional purpose-built hand car washes with drainage facilities. Unregulated hand car washes would include those operating on land without specialist drainage, those on supermarket car parks (unless drainage facilities have been put in place), and home car washing.

What regulations are hand car wash operators subject to regarding their impact on the environment and the use of chemicals? Who enforces these? How effectively?

14. There is limited guidance for hand car washes operating on forecourt sites. There are two guides currently available; one produced by the devolved administrations and another by the Environment Agency.

15. The Northern Ireland Environment Agency, Scottish Environment Protection Agency and Natural Resources Wales have developed guidance (GPP13: Vehicle washing and cleaning) on vehicle washing and cleaning which is based on relevant legislation and good practice38. However, the guidance is not endorsed by the Environment Agency. We have heard anecdotally from members that it is the GPP13 guidance which they use to comply with legislation in England despite it not being endorsed by the Environment Agency.

16. The Environment Agency do not have specific guidance on hand car washing but guidance on activities that produce contaminated water39. If a business pollutes, they could receive an unlimited fine, go to prison for up to 5 years, or both. The business may also have to pay for the whole cost of the clean-up.

17. Given the high-risk nature of a forecourt site, they will receive frequent visits from Trading Standards Officers, Environmental Health Officers, Fire Safety Officers and Petroleum Officers to ensure that they are storing fuel in accordance with the law. As part of these inspections, enforcement officers will also look at the risk of the hand car wash and other types of car washes on the forecourt site.

What role should the owners of premises on which hand car washes are operated have in ensuring their environmental impact is minimised? What legal duties are they under?

18. Fuel retailers who lease space on their sites to hand car washes look to promote best practice. Contracts with these operators usually stipulate conditions such as that the

38 http://www.netregs.org.uk/media/1414/gpp-13-v2-plussepa-plusniea-plusnrw.pdf 39 https://www.gov.uk/guidance/pollution-prevention-for-businesses

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property cannot be used for anything illegal or immoral and that the tenant cannot cause damage to the property. Where the owner of a forecourt site becomes aware of evidence that the tenant has breached their contract (for example, the hand car wash tenant washing cars outside the designated wash bay - and on the forecourt), the fuel retailer will evict the tenant for breaching the terms of the contract.

19. The Car Wash Advisory Service also provides their members with car wash investigation services40. Fuel retailers can and do use this service to have suspected illegal hand car washes looked into to ensure they are complying with the law and not undercutting their own legitimate car wash activity.

What further steps should be taken to minimise the environmental impact of car washes? How can run-off be managed most effectively? Are there less chemically intensive options available for car washes? How can water usage be minimised?

20. We would encourage the Environment Agency to review its guidance, given that fuel retailers have anecdotally said that they use guidance from devolved administrations for the compliance of their car washes in England. The Environment Agency could also work with devolved administrations to improve and relaunch GPP13: Vehicle Washing and Cleaning guidance so there is one single guidance document across the whole of the UK.

21. We would welcome new research into the most high-risk types of hand car wash operations. Currently research into the hand car wash sector is limited to the experiences of enforcement officers in specific regions. The Committee should consider whether further research into the non-compliance of the hand car wash sector across the UK would provide clarity into their practices so that the Environment Agency can take targeted enforcement activity.

22. We would also encourage the Committee to consider the role of consumer awareness in tackling illegal car washes. Increasing consumer awareness about the impact of illegal car washes could change consumer behaviour, as they may choose not to use illegal hand car washes and instead look for legitimate hand car washes. Consumers should be informed about whether the hand car wash they are using is legal. For example, the Car Wash Advisory Service does offer an accreditation scheme called WashMark, which some of our members have signed up to.

Sustainable Employment Practices

23. We do not hold any information about the employment practices of hand car washes. As such, we do not have any information about the extent of exploitation or non-compliance with employment regulations in the hand car wash sector.

40 http://www.carwashadvisoryservice.co.uk/car_wash_investigation_services.php

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24. We encourage the Committee to consider the report and recommendations from the Director of Labour Market Enforcement’s United Kingdom Labour Market Enforcement Strategy 2018/19 which does look into the extent of exploitation in the hand car wash sector41. The report identifies that the hand car wash sector is “an area of high risk, not only for labour market abuses (specifically NMW) but also linked to non-compliance on environmental (Environment Agency, 2014) and health and safety regulations, non-payment of tax (VAT, income tax and business rates), lack of appropriate planning permission, modern slavery conditions and poor housing.”

25. One of the report’s recommendations is that the Gangmasters and Labour Abuse Authority should trial licensing of the hand car wash sector in two or three geographically defined areas. We believe the Committee should take forward this recommendation. The role of a licensing system or registration scheme should be considered as part of efforts to tackle exploitation in the hand car wash sector.

26. There have been some challenges with the introduction of licensing systems that should be recognised. For instance, the alcohol licensing system, which represents the biggest regulatory challenge for convenience retailers and significant costs for local authorities to administer does not effectively tackle the problems it was designed to address. Despite its introduction in 2005, there remains a significant problem with the extent of non-duty paid alcohol across the UK simply because of lack of enforcement and the ability to remove illegal traders from the market.

27. If the government does consider the introduction of a licensing system for the hand car washes, we would welcome consideration into what type of system should be introduced. Both negative and positive licensing systems have their flaws in relation to tackling non-compliance and diligent enforcement activity is required to ensure they work effectively. Under a negative licensing system (registration scheme), rogue traders will not register under the scheme and the same enforcement challenges will remain. Under a positive licensing system (e.g. alcohol licensing system), the cost and administration burdens for both businesses and enforcement agencies misdirect efforts away from targeting the minority trading illegally who could be dealt with using existing penalties. Therefore, the Committee should consider which type of licensing system would be more appropriate in tackling illegal hand car washes.

May 2018

41 Director of Labour Market Enforcement: United Kingdom Labour Market Enforcement Strategy 2018/19

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ANNEX A

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ANNEX B

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Written evidence submitted by the Local Government Association

1. About the Local Government Association

1.1. The Local Government Association (LGA) is the national voice of local government. We work with councils to support, promote and improve local government. We are a politically-led, cross-party organisation, which works on behalf of councils to ensure local government has a strong, credible voice with national government.

1.2. We aim to influence and set the political agenda on issues that matter most to councils so they are able to deliver local solutions to national problems. The LGA covers every part of England and Wales, supporting local government as the most efficient and accountable part of the public sector.

2. Key messages

2.1. There is increasing awareness of the prevalence of modern slavery in the UK. Hand car washes have been identified by the Gangmasters’ and Labour Abuse Authority (GLAA) as a sector where there is a high risk of modern slavery and labour exploitation.

2.2. Enforcement responsibility for the regulation of hand car washes under the Health and Safety at Work Act 1974 is split between local authorities and the Health and Safety Executive (HSE). This depends on whether the car wash is ‘standalone’ or based on other commercial premises such as garages and shops. HSE has responsibility for regulating ‘standalone’ car washes, but these may be transferred from the HSE to local authorities in certain cases. The extent to which councils are the lead enforcing authority for car washes will therefore vary from place to place.

2.3. We are working with councils to increase awareness and understanding of modern slavery, and councils’ role in tackling it. In 2017 we published a joint guide for councils in conjunction with the Independent Anti-Slavery Commissioner’s office. The guide includes a section on disruption, focusing on the use of regulatory and other powers to tackle modern slavery.

2.4. Multi-agency partnerships to tackle modern slavery are at different stages of development in different parts of the country. However, there are a number of examples of good practice of both local authority and partnership-led work focusing on issues with car washes.

2.5. Capacity issues may constrain councils’ ability to proactively focus on the regulation of car washes where responsibility rests with them, with regulatory services having suffered significantly as a result local government funding reductions.

3. Regulation of car washes

3.1 Enforcement of the Health and Safety at Work Act is shared between the HSE and local authorities. Inspections and enforcement action may therefore be carried out by either HSE or councils. The location of a car wash will determine who holds responsibility for the site.

3.2 Local authorities are responsible for car washes at retail premises and petrol stations, where the main activity of the premises falls within their broader regulatory responsibilities for consumer premises and petrol stations. HSE are responsible for hand (often pop-up) car washes on all other sites, such as disused petrol stations or land. Additionally, they have regulatory responsibility for car washes at retail premises that are managed separately to the main business activity.

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3.3 Local authorities and the HSE can agree a transfer of responsibility for regulating car washes so that local authorities become the enforcing authority. Requests for transfer are made at a local level following discussion with HSE, and are agreed on a case-by-case basis. Transfers have been agreed between the HSE and councils, for example where there may be a wider range of issues of concern for councils than health and safety matters alone.

3.4 There are other organisations who may also have an interest hand car washes. In April 2017 the role of the GLAA was broadened to investigate all labour market offences in England and Wales.i The expanded remit of the GLAA has included an investigation into a hand car wash alongside the Independent Anti-Slavery Commissioner and the Metropolitan Police in Londonii. The Commissioner called it an ‘example of exemplary collaboration’.iii

4. Raising awareness of modern slavery

4.1 We have worked closely with the Independent Anti-Slavery Commissioner since January 2017 to raise awareness of modern slavery amongst councils.

4.2 We jointly produced a guide for local authorities on their responsibilities to tackle modern slavery in their local areas.iv The guide looked at four key areas:

The identification and referral of victims through the National Referral Mechanism.

Supporting victims through child and potentially adult safeguarding. Disruption and community safety activities. Ensuring that the councils’ procurement supply chains are free from

modern slavery.

4.3 To complement the guide we also held regional workshops on modern slavery, in London, Newcastle, Manchester, Bristol and Nottingham, drawing on local good practice in each area.

4.4 Modern slavery is an issue that will affect all parts of the country and requires effective partnership working across a range of local stakeholders.

4.5 Local authorities are working within a challenging financial context, including in regulatory services, where councils have faced funding reductions of as much as 50 per cent in recent years. This can impact on councils’ capacity to undertake proactive disruption activity, although councils will always seek to do so where they have regulatory responsibility and intelligence to suggest there are issues.

5. Case studies

5.1 Some local authorities have carried out projects alongside other partners looking specifically at the hand car washes within their area. This has been with the aim of improve compliance with health and safety and other law and disrupt suspected criminality.

5.2 Hand car wash project in the East of England region. Twenty-three local

authorities in Bedfordshire, Hertfordshire, Cambridgeshire, Suffolk and Essex worked alongside Health and Safety Awareness officers from the HSE, to visit 140 hand car wash sites across the East of England. The councils’ teams had particular concerns about poor health and safety standards, which can lead to death or serious physical injury. The project aimed to establish how well hand car washes in the area were complying with health and safety laws and other requirements. It was noted that following the visits there was a notable

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improvement at the majority of the hand car wash sites. Further information can be found on Luton Borough Council’s website.v

5.3 Nottingham hand car washes. Nottingham City Council worked with the GLAA, Nottinghamshire Police and Her Majesty’s Revenue and Customs to target hand car wash businesses in the city. The work identified breaches of tax, national minimum wage and health and safety legislation, and led to one individual entering the National Referral Mechanism, the platform for providing assistance to those believed to be victims of human trafficking.vi

May 2018

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Written evidence submitted by Professor Sir David Metcalf CBE, Director of Labour Market Enforcement

I am writing in my capacity as the Director of Labour Market Enforcement to contribute to the Environmental Audit Committee’s inquiry into hand car washes, particularly in relation to labour exploitation in the sector.

The Office of the Director of Labour Market Enforcement was established by the Immigration Act 2016 to coordinate the work of the three main enforcement bodies: Gangmasters and Labour Abuse Authority (GLAA), Employment Agency Standards (EAS) and HMRC’s National Minimum Wage (NMW) enforcement team. One of my priorities is to produce an annual strategy on labour market enforcement and the first full strategy was published earlier this month.

I was pleased to see your Committee’s inquiry make the important link between the environmental and employment standards impacts in this sector. My work is very much focused on the effective use of joint working to tackle non-compliance across a number of areas.

A key part of my role is to evaluate the scale and nature of labour exploitation and, through the work of my Information Hub, gather intelligence to target particular sectors and regions vulnerable to unscrupulous employment practices. This innovation pooling intelligence from a number of state enforcement bodies and beyond, enabled my office to produce a Strategic Intelligence Assessment to identify those sectors most at risk of non-compliance and labour exploitation. The results of this exercise, set out in my strategy, ranked hand car washes as the most serious sector threat. The key labour exploitation risks identified in this sector include: organised crime groups exploiting workers with threats and debt bondage, withholding travel documents to control workers and NMW underpayment.

I also met with stakeholders in the industry, as part of the consultation for my 2018/19 strategy, for an insight into the multi-faceted and serious non-compliance issues in hand car washes across the country. As harm in this sector is not limited to environmental factors, but also spans labour exploitation and modern slavery, health and safety breaches, non-payment of tax (including VAT, income tax and business rates) and lack of appropriate planning permission, I have called for a multi-agency approach to tackle abuse in this sector through licensing pilots.

Hand car washes have a number of regulations to which they should be adhering, but currently the sector has no compulsory registration or licensing, although there are voluntary accreditation schemes such as Washmark. To gain Washmark accreditation, an operator must comply with standards for all aspects of the car wash operation from insurance and planning consents to chemical handling and management of wash water. This is a model of good practice, but as a voluntary scheme does not tackle the most serious offending.

I have recommended that compulsory licensing is trialled by the GLAA in two or three geographically defined areas in the hand car wash sector (see section 4.2 of the Strategy). Licensing is potentially a way of simultaneously tackling several types of non-compliance across multiple regulatory areas, from environmental standards to employment practices. These small-scale pilots would aim to test the feasibility of licensing hand car washes as a sector, resourcing requirements, best practice in

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processes and the impact of licensing on compliance. Due to the range of regulations and non-compliance risks involved it is important that GLAA work in close cooperation with local authorities, the Health and Safety Executive and the police to develop a licensing model that covers all areas.

The Government will respond to my Strategy and its recommendations in due course. I am aware that asking the GLAA to license hand car washes will require legislation, which in light of current pressures on the legislative agenda is likely to create delays in implementation. In the meanwhile I am pleased that the Home Office and GLAA have suggested a voluntary scheme for hand car washes, in partnership with local authorities and the other enforcement bodies, to create an accreditation scheme in the interim.

I would be happy to provide further information in relation to the above and look forward to your reporting on this important issue.

May 2018

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Written evidence submitted by DEFRA

Exploiting people for their labour, subjecting them to horrific conditions and denying them basic employment rights, is a form of abuse. The Government has made clear its commitment to protect workers from abuse and to crack down on employers who try and profit from exploiting vulnerable people.

In 2015, the Government introduced the world-leading landmark Modern Slavery Act to tackle slavery, servitude, forced and compulsory labour and human trafficking. The Act gives law enforcement agencies the tools to deal with offenders and provides enhanced protection for victims.

The nature of labour exploitation continues to evolve, with a shift from abuses of employment regulation towards increased organised criminal activity. This means that sectors outside of the traditional agricultural and food packing sectors regulated by the Gangmasters and Labour Abuse Authority (GLAA) such as care, construction, hand car washes, nail bars are also at high risk of labour exploitation. The measures introduced by the Government through the Immigration Act 2016 were designed to help address this shift and included:

the creation of the role of Director of Labour Market Enforcement (DLME) to bring strategic focus and co-ordination to labour market enforcement legislation. Professor, Sir David Metcalf was appointed to the role in January 2017;

reforms to the GLAA, widening its remit, giving it new powers under the Police and Criminal Evidence Act (PACE) 1984 to enable new officers, known as Labour Abuse Prevention Officers, to investigate labour market offences, including modern slavery offences across the entire economy; and

new tools to deal with serious and persistent offenders through Labour Market Enforcement (LME) Undertakings and Orders. Breach of an LME order carries a two year prison sentence.

Labour exploitation in hand car washes has been the focus of increased law enforcement activity over the last 18 months. In recognition of the multiple risk factors associated with the provision of this service, from health and safety and environmental issues to compliance with employment law, law enforcement operations are conducted in partnership with a number of agencies, including Immigration Enforcement, Her Majesty’s Revenue and Customs and local authorities. The GLAA has played a greater role in leading operations since it acquired its new PACE powers in April 2017.

As part of the development of the DLME’s annual labour market strategy, Ministers asked Sir David to look at the case for extending GLAA licensing to other high risk sectors. In his annual strategy for 2018/19, published on 9 May, Sir David proposed a number of recommendations to tackle non-compliance and labour exploitation, including a recommendation for pilot licensing in the hand car wash sector. Sir David recommended that the pilot should be led by the GLAA in partnership with other relevant bodies on a geographically limited basis. The Government is considering Sir David’s recommendations and will publish a response to the strategy later this year. Further details about the strategy and its recommendations can be found at: https://www.gov.uk/government/publications/labour-market-enforcement-strategy-2018-to-2019

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Section 1: Development of the Industry

How many hand car washes are currently in operation in the UK? How many people are employed by them? How have hand car washes developed over the past decade? What impact has this had upon the wider car wash industry?Published Office of National Statistics (ONS) data and the presented UK Standard Industrial Classification (SIC) codes of Economic Activities are not sufficiently detailed to identify car wash businesses specifically. We are not aware of any robust number of car washes and therefore could not verify the estimates of between 10,000 – 20, 000 numbers quoted by the Committee.

It was however possible to identify the number of employee jobs with a Standard Occupation Classification code of 9236 (Vehicle valeters and cleaners) in the Annual Survey of Hours and Earnings (ASHE) 2017 (see link below). ASHE estimates there are 12,000 employee jobs held by this group in April 2017. This does not include self-employed workers.

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/occupation4digitsoc2010ashetable14

Section 2: Environmental Impact

How does the environmental impact of hand car washes compare to that of automatic car washes?Hand and automatic car washes have a similar potential to pollute watercourses if incorrectly connected to surface water drains.

For the most part automatic operations are well established and have pollution prevention measures in place. This may include water filtration, recirculation and water saving features. If waste wash water is discharged, it is generally connected to foul drainage. However they do use more energy.

Hand wash operations are often temporary in nature and set up without a proper understanding of pollution prevention requirements. They may occupy sites without any foul drainage and are therefore more likely to discharge untreated wash waters to the environment than automatic car washes.

What steps have been taken to reduce their environmental impact and use water more sustainably?Where there is a noticeable impact on water quality where polluted surface water runs into a watercourse, the EA will work with the water and sewerage companies and local authorities, to trace and stop sources of pollution. It is not easy to identify the environmental impact from individual hand car washes in rivers and streams, as this is generally low and indistinguishable from other sources of pollution, such as from personal car washing and misconnections of washing machines, dishwashers etc. In certain areas where it has identified pollution problems, the EA has undertaken pollution prevention campaigns to trace and stop discharges being made to surface water, including from hand car washes. For example the EA has carried out campaigns in Exeter and Coventry, where they became aware of a proliferation of hand car washing facilities.

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The EA has also engaged with supermarkets nationally, giving advice on what they need to do to prevent pollution before allowing hand car washes on their car parks. As part of any campaign the EA point those they find causing problems to the relevant good practice and guidance. In the most serious cases the EA reserve the right to take enforcement action or sanctions against polluters. People are encouraged to report any concerns to the EA pollution hotline as the more evidence the EA gets, the easier it is for them to identify and target pollution hotspots and take the appropriate action.

Water use is generally low in hand car washes, however the local water supply company may give advice on water saving measures in water stressed areas.

What chemicals are used in hand and automatic car washes and in what quantities?Chemicals/products used in hand and automatic car washes may include detergents, deodorisers, valeting products, degreasers, surfactants, waxes, polishes, tyre treatment substances, glass cleaning products and solvents. Other materials or contaminants arising from the activity include dirt, road salt, brake dust, traffic film residue, oil and fuel, grease and antifreeze.

The quantities of chemicals stored and used are low in most operations but the cumulative presence of chemical contaminants in wash waters may be large enough overall to impact the environment if discharged directly to watercourses. Mechanical washers normally comply with proper and installed drainage, discharging all effluents to a foul sewer system. If wash water, including chemicals, is disposed to the foul sewer and to the sewage treatment system, then normally the sewage treatment process is sufficient to remove or degrade the contaminants and protect the environment.

How should they be disposed of?Correct disposal of wash waters to sewer or waste collection means that there should be no releases to the environment. Any materials that cannot be disposed of to the foul sewer should be collected and disposed of through other waste disposal routes.

What are the effects of working with these chemicals on human health and the natural environment?Health & Safety regulations and the Control of Substances Hazardous to Health (COSHH) controls would apply. Under the COSHH regulations, if anyone (including members of the public) could be affected by a work activity involving hazardous substances, you must prevent them from being exposed to the substance or, if this is not reasonably possible, their exposure must be adequately controlled. Cleaning chemicals including detergents, deodorisers, valeting products, acidic alloy wheel cleaners, degreasers, surfactants, waxes, tyre treatment substances, and solvents should be used according to the manufacturers’ guidance to avoid harm to human health or to the environment. Published guidance is also available from the HSE website http://www.hse.gov.uk/coshh/index.htm.

The EA is responsible for protecting water quality in the environment in England. Cumulatively, the impact from car washing detergents may contribute to a drop in the

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quality of animal and plant life in rivers if in sufficient concentrations and where there is low dilution by the receiving water course or river. This impact comes from a combination of sources such as personal car washing outside homes, misconnected washing machines and dishwashers and normal water run-off from the road, etc. Collectively this is known as ‘urban drainage’ and can cause a low level chronic impact or decreased environmental quality for local water bodies.What regulations are hand car wash operators subject to regarding their impact on the environment and the use of chemicals?For England and Wales, the principal water pollution offences are contained in regulation 38 of the Environmental Permitting (England and Wales) Regulations 2016 (S.I. 2016/1154).

While it is an offence to discharge car wash water without an environmental permit, it would be very rare, if ever, that a car wash operator would wish to apply for one. This is because the advice would be to connect to a foul sewer or to recirculate wash waters so there is not a discharge. In following the advice it eliminates any risk to the environment and any need for a costly permit to be issued. This is the most effective and least bureaucratic way of minimising the low level of risk involved.

If a car wash operator did want to apply for a permit to discharge wash waters to the environment then they would need to put in place adequate treatment to reduce any contamination to acceptable levels. In most cases this would be prohibitively expensive and would not offer the best environmental solution. It would be very unlikely for the EA to issue such a permit when there are much better pollution prevention options available for the environment, the operator and the regulator.

Where the EA find car wash operators discharging to the environment the impact is usually very minor in nature and it is dealt with by giving advice and guidance to the operator for them to stop the discharge. In most cases the operator complies or chooses to cease trading if it is a temporary operation. The EA reserve the right to prosecute or apply civil sanctions if operators continue to commit an offence. Advice is normally followed and this has not been required so far for a hand car wash.

The EA also work closely with partner organisations and are a statutory consultee on all planning permissions. If a planning application for change of use or new operation of a car wash is submitted, the EA provides comments regarding the appropriate drainage. These comments will be reflected in the planning conditions. Any breaches are regulated by Local Council Planning Enforcement Officers.

Who enforces these?The relevant legislation involves enforcement by:

Environment Agency of any illegal discharges to controlled waters or breach of any environmental permits issued to carry out a water discharge activity.

Water Company Trade Effluent Inspectors of any Trade Effluent consent requirements where discharges are made to foul sewers.

Local Council Planning Enforcement Officers of any breaches of planning conditions.

Local Environmental Health Officers against statutory nuisance.

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The Gov.uk website provides the 2016 Guidance about ‘Pollution prevention for businesses’, setting out what businesses and organisations should do at work to avoid pollution incidents, including the permissions needed to dispose of waste:

https://www.gov.uk/guidance/pollution-prevention-for-businesses

How effectively?The Environment Agency take a risk based approach to investigating and regulating sites proportionate to the evidence and impact observed. From a water quality perspective, the number and impact of pollution incidents from hand car washes are low compared to other pollution sources.

The number of confirmed incidents recorded which refer to the term ‘car wash’ are shown in the table below. These are illustrated next to the water industry and agriculture sectors for comparison purposes and show the relative low risk, i.e. low frequency and low category, of pollution from car washes as a source of pollution. It is not possible without going into every incident record to say whether these come for ‘hand car washes’ and the data will include incidents from automatic car washes, householders and commercial premises as well as hand car washes. However for the same period 15% of unsubstantiated reports about car washes mention the term ‘hand car washes’. If applied to the confirmed data below and averaged over the 3 years, this would give roughly 11 confirmed incidents from hand car washes per year.

Serious Category 1

Significant Category 2

Minor Category 3

2015Agriculture 15 73 580Water Industry 4 64 1947car wash 672016Agriculture 11 59 631Water Company 9 57 2067car wash 1 3 682017Agriculture 5 63 595Water Company 12 45 2028car wash 3 81

The evidence is that there are low numbers and low levels of pollution coming from hand car washes and that the regulatory options open to the EA to minimise the risks are adequate and that the EA use these powers to deal with any issues effectively.

What role should the owners of premises on which hand car washes are operated have in ensuring their environmental impact is minimised?

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The operator of a car wash is responsible for what happens to the waste water from the business activities (‘trade effluent’). Site owners are not legally responsible for a polluting offence committed by the hand car wash, but they should manage their sites responsibly to minimise polluting activities. They should act on any advice the EA may give about a hand car wash operation on their site.

What legal duties are they under?For England and Wales, the principal water pollution offences are contained in regulation 38 of the Environmental Permitting (England and Wales) Regulations 2016 (S.I. 2016/1154). There has been only 1 permit for car wash effluent issued in the last 5 years. This was issued in 2015 for a permanent jet wash facility and permits an overflow from a recirculation system during rainfall. The EA have received no other applications during this period and in most cases would advise the car wash to recirculate or connect to the foul sewer at the initial enquiry stage.

What further steps should be taken to minimise the environmental impact of car washes?The EA has described the risk based approach to their advice, guidance and enforcement activities with hand car wash operations. Operators should minimise the environmental impact of car washes by reusing or disposing of contaminated water to foul sewer or to combined drain if they’ve got permission from the water company.

How can run-off be managed most effectively?Operators of hand wash or automatic car washes should manage run-off by containing and draining the wash waters, including any spray which might drift, and by directing the collected wash waters for appropriate treatment and disposal.

Are there less chemically intensive options available for car washes? Operators can choose cleaning chemicals and detergents which are less chemically intensive and are less harmful to the environment, such as those which are biodegradable and phosphate-free. Whilst these will still have some impact on the environment, they are easier to treat than the alternatives.

How can water usage be minimised?Water usage can be minimised by using a wash water recycling system. For example many static vehicle washing facilities can filter and re-use water which reduces the amount of wash water, saves cost and is more sustainable in the long term.

Section 3: Sustainable Employment Practices

What can the Government do to ensure that they meet their commitment to “decent work” under Sustainable Development Goal 8 in the hand car wash industry?

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The UK is committed to delivering the Global Goals, and has a substantial body of work dedicated to achieving Decent Work for people throughout the world.

We are promoting the OECD Guidelines for Multinational Enterprise and the UN Guiding Principles on Business and Human Rights through funding the UK’s National Contact Point and Shift. These guidelines underpin our ability to achieve global goal 8.

In addition, the UK has provided support to the UN Global Compact, Ethical Trading Initiative, Workforce Disclosure Initiative and World benchmarking Alliance which all aim to promote decent work across the globe.

What proportion of hand car washes are thought to be exploiting workers? Is there a clear link to human trafficking?There are many challenges in accurately quantifying the scale of labour exploitation and modern slavery as they are complex and often hidden crimes. Recent operational activity has highlighted that there can be worker exploitation in hand car washes. We do not have sufficient evidence to determine whether there is a direct link to human trafficking. Our indicators only provide a partial picture of the extent of the issues in the sector.

Data recorded by the Modern Slavery Police Transformation Unit, which brings together information about operational activity from police forces across the country, shows that since the Unit began recording in December 2016 there have a been a total of 1328 modern slavery operations (this includes live and closed operations), including:

86 modern slavery operations that explicitly state the involvement of labour exploitation in car washes;

37 live operations where the primary exploitation type is labour exploitation at a car wash; and

49 closed operations where the primary exploitation type is labour exploitation in a car wash

Data collected by the National Crime Agency across the UK shows that:

there were 94 potential victims of modern slavery referred to the National Referral Mechanism (NRM) in 2017 that specifically referenced car wash exploitation. This represented four per cent of all potential victims of labour exploitation referred to the NRM in 2017.

there were 73 potential victims of modern slavery referred to the National Referral Mechanism in 2016 that specifically referenced car wash exploitation.

It is important to note that the referral numbers detailed above include cases subsequently found not to be victims of modern slavery by the competent authority and reflect where car washes were identified by the first responder as the exploitation location at the point of referral.

Data collected by the GLAA, in England and Wales shows that since 1st May 2017 they have:

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received 178 referrals where there have been allegations of exploitation at hand car washes; and

led 34 criminal investigations as a result of those referrals.

It is important to note that the referral numbers detailed above include cases where allegations of exploitation at car washes were made to the GLAA and no further action was taken by the GLAA due to cases being referred onto another agency, insufficient evidence of offences or potential victims found not to be victims of exploitation or modern slavery.

The Home Office recognises the importance of continuing to build the evidence on the nature and scale of modern slavery, including labour exploitation. The DLME is also responsible for developing an information hub for non-compliance in the labour market which will gather information from enforcement bodies and other partner agencies. This will help to improve our understanding of the scale and nature of labour exploitation.

As part of the reforms to the National Referral Mechanism process (the UK’s system for identifying and supporting victims of modern slavery) announced by the Government in October 2017, the Home Office is developing a new digital system to support the process. This will enable us to better capture and analyse data to aid prevention and law enforcement activity. What is the cost to the public of unpaid taxes in the sector and of police investigations, safeguarding work and minimum wage enforcement?In 2017/18, the Government provided funding to the police (£8.5m from the police transformation fund), the GLAA (£6.26m), HMRC (£25.3m) and the Employment Agency Standards Inspectorate (£0.75m) to help tackle modern slavery and labour exploitation and non-compliance. It is not possible to separate out the specific costs to the public in the car wash sector from the broader range of work these bodies do, as they deploy resource flexibly depending on the nature of the risk in different sectors.

In July 2017, HRMC published data on national minimum wage investigations by sector in the Government Evidence to the Low Pay Commission. Hand car washes are not identified as a specific sector. The Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles’ sub- sector is the most closely aligned and may capture investigations related to hand car washes. Further information about NMW investigations can be found at: https://www.gov.uk/government/publications/national-minimum-wage-government-evidence-to-the-low-pay-commission-on-compliance-and-enforcement-2017.

The Home Office and the Ministry of Justice also jointly fund the Adult Victims of Modern Slavery Care Contract, a national support service for potential victims in England and Wales. The contract is currently delivered through The Salvation Army and their network of subcontractors and is forecast to cost around £90million over the5 year duration of the contract.

How has the Modern Slavery Act 2015 worked in tackling the problem of slavery in the industry?

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The Modern Slavery Act 2015 introduced a number of ground breaking measures that are helping to tackle modern slavery in hand car washes and other sectors, including:

Slavery and Trafficking Prevention Orders and Slavery and Trafficking Risk Orders under Part 2 of the Act - These civil orders are designed to prevent slavery and human trafficking offences by an individual who has already committed offences or an individual who has not been convicted of offences, but there is a risk that the individual may commit an offence. The Act gives law enforcement bodies, including the GLAA powers to apply to the courts for these Orders.

In 2017, Devon and Cornwall Police secured slavery and trafficking risk orders under the Act in respect of two defendants who were exploiting workers at a hand car wash in Exeter. Further details of the case can be found at: https://www.mirror.co.uk/news/uk-news/horrific-cramped-conditions-modern-day-10895982

The role of the Independent Anti-Slavery Commissioner - As the first Independent Anti-Slavery Commissioner, Kevin Hyland has played a pivotal role in shining a spotlight on modern slavery and human trafficking in the UK and internationally and driving this country’s world-leading response to human-trafficking and modern slavery.

The Commissioner announced on 29 March a new collaborative study with the Rights Lab at the University of Nottingham and the UK’s Independent Anti-Slavery Commissioner (IASC) which will look at labour exploitation in hand car washes. The study aims to analyse the sector so that we can better understand the nature of labour exploitation in hand car washes and how to tackle it.

Transparency in supply chains – The UK is the first country to require businesses to report on the steps they have taken to tackle modern slavery. Under the provisions in the Act, all large businesses with a turnover of £36m or more are required to publish an annual transparency statement detailing the action they are taking to prevent modern slavery from occurring in their business and supply chains.

Although hand car wash businesses are unlikely to reach the £36m turnover threshold, a number of hand car washes operate on the premises of large supermarkets. As a result of the legislation and work by the GLAA, major supermarkets, such as Tesco are now reporting on the risk of modern slavery in hand car washes and other franchise services operating on their premises as part of their transparency statements.

Devolved Administrations

Environmental policy is devolved.

Scotland

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Scotland have been given the opportunity to contribute to this response.

WalesThere are no significant differences from England.

Northern IrelandNorthern Ireland Environment Agency (NIEA) produced a ‘Vehicle Wash Operators Guidance’ leaflet in 2011 advising operators how to dispose of any washing effluent based on the potential to pollute. The options in order of preference are:

1. Re-cycling without discharge.2. Northern Ireland Water (formerly Water Service) foul sewer. Relevant

permission must be obtained from NIW before making this connection.3. Holding tank and disposal via a registered/licensed carrier to a consented

treatment facility with the capacity to adequately treat the effluent prior to discharge.

4. Consent – this will only be considered either where detergents will not be used or where the effluent is going to a treatment system that has a separate nutrient supply (e.g. sewage) and has the ability to reduce the combined BOD to within consent limits.

Once a discharge consent has been issued, compliance assessment monitoring is normally carried out where the consent permits a maximum daily discharge of 5 cubic metres or more. This approach to monitoring has been adopted to target resources in a cost effective way at those discharges which, because of their volume or composition, have the greatest pollution potential.

NIEA does not have any monitoring/inspection data for vehicle washing activity as there are only a limited number of consents which have been issued for vehicle washing activity, and none of these meet the volume threshold requirements for monitoring.

Under the Water (Northern Ireland) Order 1999, it is an offence to discharge trade or sewage effluent to waterways or to water in underground strata without the consent of the Department of Agriculture, Environment and Rural Affairs (DAERA). This includes any discharge of vehicle washing effluent. However, this is only considered as a disposal option as a last resort.

June 2018

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Written evidence submitted by the Downstream Fuel Association (DFA)

1. The Downstream Fuel Association (DFA) welcomes the opportunity to contribute to the Environmental Audit Committees inquiry into hand car washes.

2. The DFA is a trade association representing companies involved in the wholesale and retail of fuels within the road transport, aviation and heating oil sector. Our members include major supermarkets which have an extensive network of forecourts across the UK, and greater than 40 % market share of all transport fuel sold in the UK.

3. Anecdotally, the number of car washes within the UK is thought to be in the region of 20,000. They are found in a variety of locations including petrol forecourts, garden and leisure centres, retail parks, pub car parks, trade dealerships and auctions, disused petrol stations and land. The number of car washes associated with supermarkets is thought to be in the region of 500.

4. The 2018-19 strategy recently published by the Director of Labour Market Enforcement identified hand car washes as being at high risk of non-compliance across a number of areas, including labour market abuse.

5. Intelligence gathered from a range of stakeholders including labour enforcement agencies, the police and NGOs corroborates this position.

6. Areas of regulatory non-compliance include environmental, health and safety, tax, planning permissions, as well as the serious issue of the exploitation of workers and issues of modern slavery.

7. In recognition of these risks, and with the desire to drive up standards, the DFA has been working with a consortium of stakeholders to develop an Industry Code of Practice for the car wash sector.

8. The consortium is a partnership between industry, enforcement and regulatory bodies as well as NGOs working across the broad spectrum of areas which the car wash sector encompasses.

9. Members of the consortium have worked proactively with the Director of Labour Market Enforcement during the development of his 2018/9 strategy.

10.A partner within the consortium has developed a training video to upskill front line and investigating officers on how to spot visible signs that may

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indicate exploitation of workers. This video is being disseminated through the Modern Slavery Police Transformation Unit.

11.Research undertaken to support the video identified the breakeven costs for an outside wash and an “in and out” valet.

12.An outside only wash takes about 18 minutes for an average-sized car. Paying the national minimum or living wage with statutory holidays and pension contribution, and adding in the price of the materials used, rent/rates etc, this comes out at a net cost of £5.73, giving a minimum breakeven price point, including VAT, of £6.88.

13.For an ‘in and out’ valet, this would take 39 minutes at a net cost of £9.25 giving a breakeven price of £11.10 inclusive of VAT. Further information can be found in Annex 1 of this submission.

14.We welcome the Director of Labour Enforcement’s recommendation that the Gangmasters and Labour Abuse Authority (GLAA) undertake a pilot scheme to test the feasibility and impact of licensing in the hand car wash sector as we consider that the broad objectives of that recommendation can be met and tested by the approach being developed by the consortium.

15.We would like to take this opportunity to inform the Committee of a significant piece of work that is currently underway which seeks to address the issues identified and to outline how we will work with the GLAA.

Industry Code of Practice

16.A Code of Practice (the Code) has been developed in partnership with landowners, the industry and the GLAA. Advice and guidance has also been supplied by the Environment Agency (EA), Health and Safety Executive (HSE) and Her Majesty’s Revenue and Customs (HMRC).

17.The scope of the Code is wide ranging and encompasses general car washing practice, protection of the environment, health & safety, customer experience, financial transparency and corporate governance as well as workers’ rights, conditions and pay.

18.The Code will form the basis of the Responsible Car Wash Scheme (the Scheme) which will be operated by the DFA.

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19.Significant progress has been made and the Scheme will be trialled in three geographical areas during Q4. It is anticipated that it will be ready for UK roll out in Q1 2019.

20.Working under the principle of joint responsibility, the Scheme will work with landowners to leverage influence through the supply chain, providing a mechanism by which landowners can choose a responsible service provider to operate from their land. We are in close dialogue with a wide range of stakeholders who have expressed an interest in engaging with the scheme.

21.The creation of the industry Code will be a significant step forward in helping to bring legitimacy to the sector, promoting compliance and raising standards through the dissemination of best practice. Importantly, it will also be a positive force for improving the working conditions of employees through upholding workers’ rights and conditions.

22.Accreditation to the Scheme is designed to demonstrate compliance with all regulatory requirements and best practice through continuous improvement.

23.Accredited status will allow customers to make responsible choices about which car wash provider they wish to us

Working with the GLAA

24.The recommendation of the Director of Labour Market Enforcement proposes that the GLAA operate a pilot licensing scheme. The GLAA recognises that with other legislative priorities facing Government alternative approaches ought to be trialled first. The GLAA therefore engaged with the supermarkets, initially seeking information of the locations and providers of hand car washes on supermarket forecourts, in August 2017, as an initial step towards its engagement with supermarkets as a potential lever to exercise supply chain pressure to build compliance.

25.From our meetings with the GLAA it is clear that they see the value in piloting a scheme based on a code of practice, backed by the effective agreement of code signatories, to allow audits by the scheme operator, and the GLAA.

26.Where such audits identify significant non-compliance with the Code the ultimate sanction that may be applied by industry stakeholders is the removal of the hand cash operator from the site. However, our goal is to

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develop a compliant industry that is able to compete commercially on equal terms, but with the removal of rogue operators to support that level playing field.

27.Crucially the scheme operator will need to pass findings from audits to the GLAA, and other regulators. This will assist them in assessing the efficacy of the scheme, but also identify where they may need to target their investigative resources in high risk areas.

28.The DFA recognises that the powers of the GLAA mean that it also has a responsibility for investigating potential criminal offences in the labour market, including the forced labour offence. The nature of those enquiries will mean that it cannot share the details of such investigations with the DFA until such time that any resulting prosecution or other regulatory sanction has concluded.

29.Nonetheless, we believe the GLAA will be able to share trend data on the nature of non-compliance, and its assessment of those areas of the UK that may have the greatest levels of risk and problem cases. This will assist all stakeholders in taking a proactive approach in determining where to carry out audits. In turn this will also support stakeholders in developing their annual Slavery and Human Trafficking statement, as required under the Modern Slavery Act 2015.

30.Whilst the GLAA could not provide the scheme with details of ongoing criminal investigations we consider that the same would not apply to any audits that may be undertaken by the GLAA against the code.

31. Although the GLAA has the power to undertake criminal investigations into allegations of labour market breaches which may occur at car washes, it does not have a statutory compliance inspection power similar to the inspection power it operates in the industry sector it licences. Therefore the code would provide for that right of access when undertaking an audit. Furthermore, any audit undertaken by any organisation would need to be made available to the land owner if the land owner was going to be able to make decisions on whether the hand car wash should continue to operate from its land.

32.The DFA considers that the operation of the Code and Scheme, initially operating in a pilot area, and, within the pilot area, commencing with supermarket locations will create a pressure for compliance that will ripple out to other parts of that industry.

33.We expect that members of the Petrol Retail Association, who also allow hand car washes to operate from their forecourts will follow suit. We have

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been encouraged by the PRA agreeing to provide the data from their members of where hand car washes operate in the area chosen for the pilot.

34.As the pilot builds momentum we will look to include and encourage other business, such as gym chains where hand car washes are known to operate from, to join the scheme.

35.It is proposed that the pilot will operate in three geographical areas in the UK. Where possible, the Scheme will look to work in partnership with other initiatives that are working to eliminate the exploitation of workers.

36.Whilst we recognise this will not solve the problem overnight we consider it is a good start. There will remain those rogue operators that may exploit workers, harm the environment, or breach other regulations, and those operators should expect the full weight of the regulatory authorities to tackle them.

37.However, the developing intelligence of where car washes are, and increased compliance by supporters of the Code and scheme, should support the ability of regulatory bodies such as the GLAA to have an increasingly focused targeting of non-compliant rogue independent operators.

We are happy to expand on any of the points made in this submission and we remain committed to working collaboratively with you in the future.

June 2018

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Annex A – Cost of car wash

Based on 200 cars per week cleaned, 35hrs per worker at NLW, 25+ yrs old plus statutory pension. NO vehicle movements or productivity calculations. Regional variations may apply.

Outside only washIn and out wash (mini valet/Gold)

Wash, TFR, Shampoo, Rinse, Leather

As outside, plus vacuum, inside glass and wipe dashboards

Average time to complete (total minutes) 18 39£ £Apr-18 Apr-18

DIRECT COSTSLabour cost inc. hourly rate, pensions etc. (no vehicle movement) 2.81 6.09Water 0.06 0.06Elec 0.08 0.16Chemicals 0.16 0.21Consumables 0.01 0.02Maintenance 0.06 0.08Rent (highly variable, average amount assumed) 0.9 0.9SUB-TOTAL 4.08 7.52

OTHER (HIDDEN) COSTSRates (based on £15K RV and small business rates relief) 0.45 0.45Insurance 0.17 0.17Supervisor/manager 0.75 0.8Trade effluent 0.03 0.03

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Uniforms 0.02 0.03Internet 0.03 0.03Mobile phone 0.01 0.01Credit card charges 0.03 0.04Bank charges 0.04 0.05Accountancy/payroll/legal 0.12 0.12SUB-TOTAL 1.65 1.73

TOTAL COSTS 5.73 9.25

COST PLUS VAT 6.88 11.10

HCW0021

Written evidence submitted by the Clewer Initiative and the Santa Martha Group

1. We write as the respective chairs of The Clewer Initiative, the Church of England’s response to modern slavery, and the Santa Martha Group, an anti-slavery project by the Catholic Bishops Conference of England and Wales, following the Environmental Audit Committee’s decision to hold an inquiry into hand car washes.

2. Although the primary focus of the Committee’s inquiry is on environmental issues, the decision to look at wider employment practices in this sector is encouraging. The focus of this response is on the latter of these issues and reflects our concern that the informality and unregulated nature of Britain’s hand car washes make them an attractive hub for forced labour exploitation by gangmasters and traffickers alike.

3. Given that no reliable public data currently exists as to the scale of the problem we are launching a Safe Car Wash smartphone app on 4 June 2018 with the aim of mobilising our churches in an unprecedented community policing exercise to map the scale of the challenge. This response sets out some of the research we have undertaken as part of this initiative which might assist the Committee take forward its own inquiry.

4. We hold that without proper regulation and supervision Britain’s informal hand car wash industry, which has grown exponentially over the last 10 years, is at risk of becoming a significant hub for modern slavery. The anecdotal evidence of forced labour exploitation and servitude in this area is a classic example of modern slavery happening with impunity in plain sight on Britain’s high streets. It is deeply disturbing that an act as simple as having one’s car washed can help perpetuate the human misery involved with modern day slavery. There is a role for government to play in this area, but the primary responsibility rests with the consumer. We hope that our efforts, alongside others, will lead to more informed consumer decisions being made as to where to have one’s car washed.

The relationship between environmental issues and modern slavery

5. The impact of human activity on the environment is a global phenomenon, not confined to geographical borders, and equally applicable to modern slavery. There is a direct causal link between environmental damage, climate change and exploitation in supply chains. It has been implied that the CO2 footprint of modern slavery is third behind that of the USA and China.

6. To appreciate pollution and labour exploitation at a local micro-level with hand car washes it is helpful to understand the macro perspective. Over several years Professor Kevin Bale, from Nottingham University, has researched the impact of labour exploitation on the environment. Notable industries include: bonded family labour in the Indian brick factories with unregulated kiln emissions; clearance of protected South Asian mangroves for seafood processing for supermarkets involving child slaves; and the mining of minerals for mobile phone components in the Congo. Many of the products available in Britain have been produced through exploitative supply chains contributing to climate change.

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7. Although the human and ecological suffering of the most exploitative industries is concentrated in developing countries, our domestic industries must not threaten the biodiversity of the UK’s waterways, soils and habitats through inappropriate work practices. British law enforcement and statutory agencies have an imperative to regulate and investigate hand car washes for both worker and environmental protection.

Hand car washes - a growing hub of human exploitation

8. Over the last 15 years hand car washes have grown exponentially and now provide for over 70% of all car washes. Before 2004 there were virtually no hand car washes with the market traditionally dominated by big petrol retailers and valeting companies. It is estimated that of the 18,500 car washes in the UK today only 7,000 or 38% of the total are provided by the formal sector.

9. This market shift has become most marked following the financial crisis of 2008 and the mounting pressures for low-wage, low-skill labor intensive and sometimes informal employment. This restructuring and the growing informality of Britain’s car wash industry creates an economy characterised by low levels of environmental and employment regulation. This informality attracts vulnerable workers and creates working conditions that display all the signs of forced labour exploitation.

10. We are very aware that no reliable data currently exists as to the levels of forced labour exploitation and servitude at hand car washes. It is important therefore not to assume that all hand car washes are illegitimate. However, police raids of hand car washes across the country have surfaced many instances of modern slavery with several shown to be run by gang masters and criminals that use this industry as a front for money laundering.

11. Although the focus of our attention has been on the situation here in the UK, we understand that environmental regulations in other countries means that that car washes that collect waste water from vehicle washing are not permitted. This would appear to support the conclusion that the uniform application of existing environmental regulations and labour standards across both the formal and informal car wash sector would go a long way to ensuring that hand car washes do not become a significant hub for modern slavery in Britain. To this end we would welcome any steps the Committee can take to encourage the relevant government bodies and agencies to be more alert to the need to ensure this sector meets the basic requirements under UK law, both environmental and commercial.

Towards a better understanding of forced labour exploitation at hand car washes

12. The lack of reliable and credible data as to the scale of the problem has led us to design a smartphone app, The Safe Car Wash, to be released on 4 June. It is designed to assist the user identify whether the signs of forced labour exploitation are evident at the hand car wash they are using. These signs have been drawn up in consultation with the National Crime Agency, the Gangmasters Labour Abuse Authority, The National Police Chiefs Council

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and the Office of the Independent Anti-Slavery Commissioner. They include a range of questions such as on pricing, whether workers are wearing protective equipment, or signs of workers living on site in make shift accommodation.

13. Depending on the data entered the user will either be told there are no visible sign for concern or directed to phone the Modern Slavery Helpline. We are in conversation with the National Crime Agency and the Gangmasters Labour Abuse Authority to give them real time access to anonymised data collected by this exercise which will assist them with their ongoing inquiries and investigations. We hope that this will help both bodies to better target already stretched public resources on those hand car washes where there is user evidence that there is a cause for concern.

14. Nottingham University Rights Lab have agreed to partner this initiative by analysing the data over a six-month period and producing a report that better maps current practice. This report is due to be published in the first quarter of 2019. We recognize that this is likely to only provide a snapshot of an ever-shifting picture as gangmasters will no doubt develop alternative strategies. We believe, however, that the picture painted will be more nuanced than anything that currently exists. This should enable a more sophisticated public policy debate, than has hitherto been the case, both as to the scale of the problem and suitable responses. Either way, we very much hope that this exercise will help sensitise the public and in turn shape consumer behavior.

15. If you would like further information regarding The Clewer Initiative or the Santa Martha Group’s work in this area then please don’t hesitate to be in touch.

June 2018

i The former Gangmasters’ Licensing Authority previously had a narrower remit focusing on a limited number of sectors.ii http://www.gla.gov.uk/media/3537/external-nature-and-scale-of-labour-exploitation-report-final-version-may-2018.pdf iii https://www.recruitment-international.co.uk/blog/2018/01/glaa-praised-by-uk-anti-slavery-commissioneriv www.local.gov.uk/modern-slavery-council-guide v https://www.luton.gov.uk/Business/Business_support_and_advice/licensing-and-regulation/Health_and_safety/health_and_safety_projects/Hand%20car%20wash%20project/Pages/The%20Hand%20Car%20Wash%20Project.aspx

vi http://www.gla.gov.uk/whats-new/press-release-archive/221117-nottingham-car-washes-far-from-squeaky-clean/