Far too many people believe the legacy of slavery is an historical artifact — it’s not. People around the world are still being held in forced labor conditions. The staff at Global March Against Child Labor reports, “In recent years, those concerned with the issues of trafficking, forced labor, and slavery have begun to focus on supply chains as a new arena of action with a focus on girls and young women. Millions of people including women, men and children continue to toil in forced labor for the private economy that reaps some $150 billion in profits each year. Thousands of goods and services bought and sold every day are touched by modern-day slaves, in particular girls and young women who are not only the most vulnerable to being exploited, but also comprise of the most invisible labor in global supply chains.”[1] No ethically-minded individual believes profiting from slavery is acceptable.

Most consumers would be appalled if they knew their purchasing habits supported forced labor practices — but they probably do. The staff at Anti-Slavery International reports, “Mobile phones. Clothes. Shoes. Flowers. Wine. Food. Many of the products we buy and use every day are produced by people trapped in modern slavery. Every day, millions are exploited to fulfill our relentless drive for cheap products. At least 24.9 million people are thought to be in trapped in forced labor worldwide. Of them, 16 million are exploited in the private sector, linked to the supply chains of the international businesses supplying our goods and services. Slavery exists in all stages of the supply chain, from the picking of raw materials such as cocoa or cotton, to the manufacturing of goods such as mobile phones or garments, and at later stages of shipping and delivery to consumers.”[2] Companies whose supply chains have been revealed to include forced labor conditions have inevitably suffered a loss of reputation from which it is difficult to recover.

Matt Crossman (@MattCrossmanUK), stewardship director at Rathbones, reminds us that when it comes to people exploiting forced labor to make a profit, “history keeps on repeating itself.”[3] He goes on to claim, “No company has been prepared to admit their failures — and neither have investors been prepared to look hard enough and demand answers. Until now, that is. A consensus has emerged among investors like us that the rules of the game need to change before we see any firm progress.” If the tide is indeed changing, then companies need to get serious about rooting out and eliminating forced labor in their supply chains.

Lip service will no longer do

By most accounts, industry-sponsored voluntary regulatory mechanisms and codes of conduct — often referred to as Multi-Stakeholder Initiatives (MSI) — have failed to root out supply-chain human-rights abuses. The Institute for Multi-Stakeholder Initiative Integrity (MSI Integrity) states, “After reflecting on a decade of research and analysis, our assessment is that this grand experiment has failed. MSIs are not effective tools for holding corporations accountable for abuses, protecting rights holders against human rights violations, or providing survivors and victims with access to remedy. While MSIs can be important and necessary venues for learning, dialogue, and trust-building between corporations and other stakeholders — which can sometimes lead to positive rights outcomes — they should not be relied upon for the protection of human rights. They are simply not fit for this purpose. It is time to rethink the role of MSIs. The presence of an MSI should not be a substitute for public regulation.”[4] Clearly, the winds of change are beginning to blow and companies need to be prepared to provide more transparency in their supply chains.

Supply chain expert Adrian Gonzalez asks, “How many slaves are in your supply chain?”[5] He adds, “Not knowing the answer is a symptom of poor supply chain visibility. … You can’t aspire to have end-to-end supply chain visibility, which is what every manufacturer and retailer wants in order to become more agile and responsive, without also accepting end-to-end responsibility. The scope of end-to-end supply chain visibility must go beyond the status of orders, shipments, and inventory — it must also include having timely, accurate, and complete visibility to labor, safety, environmental, and legal practices across the entire supply chain.”[5] Eventually, governmental regulations will force companies to act. Waiting to do something until compelled to act is not a winning strategy.

Rooting slavery out of supply chains

The Fair Labor Association (FLA) notes, “Legal and regulatory frameworks prohibiting forced labor have been proliferating over the course of the last decade as international bodies and governments tackle the persistent problem of forced labor in global supply chains.”[6] In order for companies to be in the best possible position, the FLA recommends companies do the following:

• Ensure suppliers understand FLA standards as well as indicators of forced labor as defined by the ILO and best practices.
• Ensure that company staff are aware of which parts of the supply chain are at greatest risk for forced labor, such as areas with a high migrant population, or the widespread use of labor contractors and recruitment agencies. Invest in conducting in-depth forced labor assessments for the most at-risk locations.
• Give suppliers detailed explanations about which workplace practices trigger forced labor findings, and confirm that suppliers are not engaged in any such practices.
• Maintain strict policies against retention of workers’ legal documents and identification papers, and recommend that suppliers retain photocopies of such documents to fulfill administrative
  needs.
• Be prepared to move quickly to remediate any violations found, including potentially difficult-to-negotiate requirements like repayment of recruitment fees paid by workers to employers or recruitment agencies; in conjunction with this remediation, work to determine and eliminate the root causes of the violations.
• Establish grievance channels in the native languages of all employees at a factory or a farm as a recourse for workers to report forced labor violations, especially in workplaces where a migrant worker population may face language barriers. Ensure that these grievance channels allow for anonymous reporting and protect workers from retaliation.
• Be prepared to discuss purchasing and production practices and to find cooperative solutions whenever suppliers rely on mandatory overtime to meet excessive production targets.
• Collaborate with other brands sourcing from the same regions and suppliers to raise awareness about forced-labor issues and to find collective solutions to common findings.

Concluding thoughts

Crossman concludes, “Simply writing a nicer code of conduct and employing some more auditors is not working now; more codes and more audits will not solve the problem. Perhaps supply chain transparency will.” Business expert Geoffrey James (@Sales_Source) adds, “When companies actively seek out and eliminate forced labor in their supply chain, it makes slavery less profitable and therefore less likely to survive. So by protecting your own company you’re actually making the world a better place.”[7]

Footnotes
[1] Staff, “Trafficking and Forced Labour in Global Supply Chains – The Gender Lens,” Global March Against Child Labour, 2020.
[2] Staff, “Slavery in supply chains,” Anti-Slavery International, 2020.
[3] Matt Crossman, “Modern slavery supply chains: The rules of the game need to change,” Investment Week, 21 July 2020.
[4] Staff, “Not Fit-for-Purpose,” The Institute for Multi-Stakeholder Initiative Integrity, July 2020.
[5] Adrian Gonzalez, “Forced Labor In Supply Chains: The Problem Persists,” Talking Logistics, 22 July 2020.
[6] Staff, “Forced Labor in Supply Chains: Addressing Risks and Safeguarding Workers’ Freedoms,” Fair Labor Association, July 2019.
[7] Geoffrey James, “How to Avoid Forced Labor In Your Supply Chain,” 26 January 2016.