Howard Kerr, Chief Executive, BSI shares his views on addressing modern slavery through building supply chain resilience
Clothing, household goods, hand car washes and food retailers have made the headlines recently regarding the working conditions and rights of workers in their supply chain. This is a global issue and pressure is being exercised through lobbying, human rights advocates and ethical trading initiatives to improve international labour conditions and prevent such headlines as ‘Corporate leaders must do more to stop modern slavery’.
The fact such headlines are considered newsworthy shows how human trafficking and slavery has changed, sliding beneath the notice of many individuals and organisations. Modern slavery is less about people owning other people but more about people being
exploited and controlled. U.S. Government agencies describe modern slavery and human trafficking as umbrella terms for both trafficking and compelled labour by recruiting, harbouring, transporting, providing or obtaining a person through the use of force, fraud, or coercion.
The sheer scale of modern slavery is daunting: according to the International Labour Organisation (ILO) there are 21 million people globally trapped in some form of forced labour, whereas The Walk Free Foundation’s Global Slavery Index, has estimated 45.8 million people are in some form of modern slavery in 167 countries. In the UK alone, an estimated 13,000 people are working as slaves across a variety of sectors. The UN considers modern slavery and trafficking the second-largest criminal industry in the world.
Slavery in the supply chain
Today we transport, source, manufacture, procure and retail products from all corners of the world where our procurement systems need to manage logistics, quality, product safety and traceability with behaviour issues associated with security, workplace conditions, slavery, counterfeiting, ethics and environment. As a consequence, one of the key concerns of CEOs and policymakers is the resilience of supply chain policies and procedures and the risk and reputational consequences of disruption.
Government legislation hopes to increase the transparency and in turn, test the resilience, of supply chains by pushing forced labour up the corporate agenda. In May 2018, security ministers from the Group of Seven (G7) countries, in Toronto, agreed to coordinate a series of efforts to combat modern slavery across the globe. In the UK, the Modern Slavery Act,
introduced in 2015, contains a corporate reporting requirement aimed at increasing transparency around modern slavery and human trafficking in the operations and supply chains of large companies. The Act requires that any business or part of a business, with a global turnover of £36 million or more supplying goods or services in the UK, must publish an annual slavery and trafficking statement disclosing what steps have been taken to ensure there is no slavery in any part of its business and supply chain. Businesses now have a legal obligation, as well as powerful moral and commercial drivers, to manage supply chain risk effectively with the ramifications widespread, impacting many countries and not just the UK.
Controlling every link in the supply chain presents enormous challenges and senior business leaders often see the risk of modern slavery as something that is out of their direct control; entailing their global supply chains and involvement with business partners.
This is a global issue with enforceable regulations such as The California Transparency in Supply Chains Act and the UK Act increasing the urgency for establishing sound practices to support public disclosure requirements on the subject.
Supply chain resilience and transparency – the role of policymakers
In order to confront and eliminate human trafficking and modern slavery, we need a way to measure the extent and details of the issue on a global basis. Not surprisingly, research has shown that supply chain management is more challenging for larger organisations. And the more complex the organisation, the more important it is to monitor the supply chain. Policymakers and CEOs alike need to tap into the wealth of information available from the Trafficking in Persons Report (TIP) from the U.S. Government to BSI’s Trafficking and Supply Chain Slavery Patterns Index.
The visibility of such data can encourage firms to push beyond their first level of connections and delve deeper to obtain a thorough insight into the people and systems that they and their suppliers employ. A well-designed due diligence programme will consist of:
- Policies and procedures that clearly
- define organisational requirements and work instructions;
- Systematic means to communicate throughout the organisation and stakeholder network;
- A means to develop and strengthen the necessary skills of practitioners and suppliers;
- A system to measure compliance, impact and progress towards goals and;
- A well-governed management system which means involvement and enforcement on the part of leadership and an integration between risk management practices and commercial/operational decisions.
In supporting progressive organisations to embed a culture of resilience across their supply chains, senior leaders can help to address not only the 20 million trapped in modern slavery, but also generate significant reputational and commercial benefits for the businesses they oversee; ultimately making their organisations more socially responsible and resilient.