Global Supply Chains Bring a Heightened Risk of Exposure to Modern Slavery
The International Labour Organization currently estimates that there are 24.9 million victims of modern-day slavery or forced labour globally, while the Walk Free Foundation has estimated the number of victims of modern slavery in the UK at 136,000. Of the 24.9 million, 16 million are exploited in organisations linked to the supply chains of international businesses. With supply chains now able to span an increasingly interconnected globe, this brings a heightened risk of exposure to poor working conditions and compliance gaps, making it more likely that unethical practices can go undetected.
Expectations and pressures on companies to tackle modern slavery are increasing, driven by a greater understanding of the scale and scope of the issue and policy debates. However, despite the heightened focus, confusion remains as to what modern slavery is, how to spot it, and what actions and remedial steps should be taken once it has been identified.
In October 2020, Priti Patel, Home Secretary gave a clear message in the ‘UK Annual Report on Modern Slavery’:
“I will not tolerate the despicable exploitation and abuse of innocent people through modern slavery, and I will not stop until this terrible crime is finally consigned to the history books.”
There are compelling moral, legal and commercial reasons for businesses to address modern slavery:
Legal compliance – Alongside the Modern Slavery Act, there are also the Human Trafficking and Exploitation Act (Northern Ireland) and the Human Trafficking and Exploitation Bill (Scotland).
Compliance with international conventions and laws – Nearly all countries have ratified key International Labour Organization (ILO) provisions, most notably the Forced Labour Convention (C29) and the Abolition of Forced Labour Convention (C105).
United Nations Global Goals – The UN’s goals for Sustainable Development include a target to “eradicate forced labour, end modern slavery and human trafficking and end child labour in all its forms by 2025.”
Standards and accreditation – In addition to national laws that address modern slavery, public and private sector organisations can also include voluntary standards or accreditation which cover labour practices and human rights in tenders for new contracts.
Protecting brand and meeting stakeholder requirements – Ethical operations are increasingly a key factor in purchase decisions. Consumer businesses face new and growing expectations that their products and services will comply with social and human rights criteria.
Negative publicity – Media coverage about slavery and forced labour in a business or its supply chain can seriously damage brand reputation, which may rapidly lead to a loss of investor, customer or wider public confidence.
Accessing new markets or finance – Failure to properly manage modern slavery risks can make it harder for companies to access markets or secure investment. In some cases, addressing modern slavery risks may become a condition to tender for government contracts or other commercial projects.
Import and export of goods – In some countries, trade regulations prohibit the import and export of goods produced by forced or trafficked labour. In these jurisdictions, allegations can result in confiscation of goods by public authorities or disruption to trade and production schedules.
Supply chains are invariably multi-layered across many tiers, dealing with multiple suppliers, contracts and processes, all of which creates ‘blind spots’ – often a result of subcontracting through the value chain to a point of limited visibility, control and processes. While legislation and initiatives can improve business responses to these risks, much remains to be done to overcome the key challenges.
To achieve this, organisations must start by asking the right questions around human rights and working conditions and review which parts of their supply chain are most at risk and put appropriate protective measures in place, which should include:
· Developing policies, procedures and communication channels.
· Producing a modern slavery statement.
· Closely managing high-risk suppliers.
· Training employees.
· Checking third party recruitment agencies.
· Accreditation.
Even if your organisation or business is not legally obliged to comply with the Modern Slavery Act, responsible practices will significantly contribute to preventing modern slavery within businesses and supply chains.
Andrew Wallis OBE, CEO of Unseen says:
“It’s essential we have a comprehensive approach to tackling forced labour in businesses and supply chains. That means a fundamental change in approach – addressing the root causes of modern slavery. The way businesses can do this is by demonstrating that they’re compliant, ethical, sustainable and managing the risks of vulnerability to exploitation. With the power of technology, data and responsible business practices, we can enable worker voices to be heard much more easily. And this will only help us in our mission to end slavery for good”.
Although modern slavery is clearly not a challenge that can be eradicated overnight, a steady shift in cultural practices and an increased awareness of its issues offers hope for a brighter future. As such, businesses need to take action to protect victims and make sure they actively audit, investigate and reduce exploitation, which will go a long way to pushing modern slavery out of legitimate supply chains.
Next steps
Our latest Whitepaper explores these areas in more detail, how to avoid being complicit and provides steps to tackle modern slavery and compliance checklist.
Download: ‘Preventing Modern Slavery in the Supply Chain’.
Our whitepaper addresses:
- Tackling modern slavery
- Why organiations should address modern slavery
- Managing supply chains
- Why addressing modern slavery is so important
- Modern slavery in ESG
- Using technology to create responsible and ethical operations
