How Businesses Can Address Modern Slavery in Supply Chains

SupplyShift Staff

February 20, 2019

In 2015, the UK became the first major world economic power to pass legislation targeting modern slavery. The UK Modern Slavery Act requires companies with revenues greater than £36 million to issue an annual “Slavery and Human Trafficking Statement” outlining the efforts being taken to rid its supply chain of human rights violations. Similar bills have since passed or are being considered by seven other G20 nations.

Unfortunately, laws like the UK Modern Slavery Act only require companies to report their anti-slavery activities, but don’t hold them responsible for failure to clean up their supply chains. Punishment for bad behavior has largely been left to consumers, who can choose to boycott companies that have been “named and shamed” as profiting from modern slavery.

Another approach proposed by the American Bar Association is for global businesses to write anti-slavery provisions into their supplier contracts. These agreements would be based on detailed supplier codes of conduct and allow companies to quickly sever relations with any supplier found to be employing forced or slave labor. However, there’s an inherent risk in trying to “contract away” human rights violations. Rather than holding suppliers accountable, in practice it may incentivize bad actors to hide evidence of modern slavery even deeper in the shadows.

The only way to truly eradicate modern slavery and other human rights violations from the supply chain is to create a holistic view – conducting in-depth surveys and on-site audits that cover every supplier at every tier, and combining that data with cross-departmental and external data feeds to get the full picture of supply chain risk. While modern slavery can often hide in plain sight, here are some clues that diligent companies look for when surveying and auditing suppliers:

1. Restricted freedom of movement: including removal of personal documents, inability to leave the premises, intimidation of workers, unreasonable notice periods/termination clauses in contracts agriculture domestic work manufacturing construction.

2. Unreasonable conditions of work: such as recruitment fees paid by the worker, accommodation fees or long housing contracts, payments in kind, payments to bank accounts that don’t belong to the worker, managerial control of worker bank accounts, excessive working hours, overcrowding of accommodations, lack of contracts or contracts that are not available in native languages.

3. Unusual statistics: this could include a number of phenomena, including unusually high production rates based upon seemingly low levels of working hours, anomalies in record keeping; such as frequent staff turnover/sickness rates, double bookkeeping or multiple uses of the same contact details.

4. Suspicious worker behavior: this could include evidence of coaching, accompaniment to interviews or to and from the workplace, malnourishment and nervous behavior.

Collecting this level of granular supplier data is no small task. Large global corporations may have dozens of first-tier suppliers with hundreds more second- and third-tier links in the chain. Currently, many of these businesses are attempting to manually collect, manage, and analyze massive amounts of supplier data with conventional tools like email and hundreds of separate spreadsheets. Not only is it incredibly time consuming, but manual data entry leaves lots of room for human error. Luckily there’s a better way – networked software solutions for monitoring workplace practices and labor conditions at every tier of the supply chain.

This post is an excerpt from our white paper Modern Slavery in Supply Chains- Identifying and Addressing 
Labor Risk in Global Supply Chains. Click here to download the full white paper.

SupplyShift Staff

February 20, 2019

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