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Labour to reform public appointments amid row over G4S director

Jasper Jolly
Photograph: Matt Dunham/AP

The Labour party has pledged to overhaul the public appointments system after one of the government-appointed commissioners who sets the UK minimum wage joined the board of G4S, the security company facing allegations of systematic violations of migrant workers’ human rights.

Clare Chapman has served since March 2015 as one of nine commissioners on the government’s Low Pay Commission tasked with setting the national living wage, the legal minimum hourly rate. She was appointed as a G4S director in September.

G4S has faced repeated controversies over its treatment of workers and users of government services. In September, it said it will end its involvement in the immigration and asylum sector following a scandal at a detention centre near Gatwick. As one of the world’s largest public-sector employers, with 546,000 staff across 90 countries, G4S could also benefit from lower minimum wage requirements.

Norway’s government pension fund announced last Thursday it had banned shares in G4S from its $1.1tn (£850m) investment portfolio, after its ethics watchdog found an “unacceptable risk of the company contributing to systematic human rights violations”.

In response to the Guardian’s inquiries about Chapman’s appointment, Jon Trickett, the shadow minister for the Cabinet Office, said the latest question mark over G4S’s treatment of migrant workers “threatens the integrity of the Low Pay Commission”.

He said: “Successive Tory governments have made a mockery of the public appointments system, filling key roles with cronies and allowing conflicts of interest that damage trust in government.”

He added that the Labour party would “overhaul the public appointments system so it serves the many”.

The alleged mistreatment of migrant workers employed by G4S outlined in the report by Norway’s Council of Ethics took place before Chapman’s appointment. The company said it was endeavouring to improve working conditions.

In an emailed statement, Chapman said: “As the company has stated, G4S is committed to ensuring that migrant workers are treated with dignity and respect at all times.

“The company has carried out an investigation into the matters raised by the [Norwegian] Council on Ethics and has been implementing an action plan to ensure [workers’] welfare and protection across its businesses in the Middle East.

“The [corporate and social responsibility] committee of G4S is overseeing the implementation of the plan and continues to review progress on an ongoing basis.”

The Tory party said: “All board members of public bodies act in accordance with the Cabinet Office’s codes of conduct. This includes guidance on managing outside interests.

“The Conservative government is ending low pay by increasing the national living wage to £10.50 by 2024, and cutting the age threshold to 21 [from 25].”

The Council of Ethics’ report on G4S found that workers mainly from India, Pakistan and Nepal – working in Qatar and the UAE – were subjected to misinformation about working conditions, restrictions on freedom of movement and “debt bondage” from high recruitment fees.

The council noted that some of G4S’s practices were indicators of forced labour, a type of modern slavery, under the conventions of the UN International Labour Organisation.

Only 12 other companies are on the pension fund’s blacklist on human rights concerns, and none of them are listed on either US or western European stock markets. The other 12 include a number of Asian shipping lines, a Taiwanese shipbreaker, and a Polish property developer.

As well as G4S, Chapman is a non-executive director at Heidrick & Struggles, an American recruitment company, and Weir Group, a British mining and oil engineering company that has been praised for reforms that lowered maximum executive pay packets.

Chapman has previously served in senior human resources roles at BT and Tesco, while as director general of workforce for the National Health Service she had responsibility for 2.2 million workers.

Luke Hildyard, executive director of the High Pay Centre, which monitors pay inequality, said: “Being ultra-charitable, one could argue that having a low pay commissioner, who hears about the experiences and perspectives of low-paid workers in that role, on the G4S board might help the company towards reforming its barbaric employment practices.

“At the same time, having a representative of a company whose business model is so focused on low-paid labour on the body that advises the government on minimum wage levels is potentially a huge conflict of interest.

“It will certainly damage perceptions of the advice given by the commission. At best, this is a situation that will have to be monitored extremely closely over the coming months to see if it is sustainable.”

Commissioners are appointed from an employer background, from an employee background or as independents, and are subject to annual appraisals by the business secretary. The business department and the Low Pay Commission declined to comment.