Eliminating modern slavery from global supply chains

Eliminating modern slavery from global supply chains

Robin Agarwal Blog, Supply Chain

Slavery is a global issue that affects businesses regardless of their geographic location. International companies involved in clothes manufacturing, farming and mining activities are seen as the most at risk, but the issue can affect almost any industry.

The UK Modern Slavery Act has shone a light on the issue of forced labour in supply chains. The Act requires businesses with a turnover of £36 million or more to report on efforts to eliminate slavery and human trafficking from their supply chains.

Large organisations can unwittingly find themselves affiliated with a supplier using forced labour, more than 20 steps down their supply chains. The longer the supply line, the more vulnerable it is to a breach. Shortening supply chains and relying on local produce has been touted as a possible solution, particularly in the food industry, however, not every organisation has that option.

A very real threat

The International Labour Organization recently stated that almost 21 million people across the globe are victims of forced labour.  Organisations which fail to take the correct precautions, risk massive ramifications. Nestlé, the Swiss transnational food and drink company, recently admitted that it had uncovered the use of slave labour by some suppliers in Thailand. The company launched an internal investigation in late 2014 after news outlets and non-governmental organisations reported on the issue.

The Swiss company has since been applauded for this self-policing initiative and is working on the implementation of a strategy aimed at protecting its workers. A series of new requirements will be imposed on all of its suppliers, alongside training in human rights, outside auditors and potentially offering rewards to those who alter their practices.

Effective supply chain management is a critical part of any organisation’s remit. While disruptions to the flow of goods can expose businesses to operational and financial risks, companies would do well to keep in mind the ethical consequence of not using the appropriate tools to mitigate risk. 4C employs a sophisticated risk-mapping tool, designed to uncover failings in all areas of operation. It leverages commodity mapping knowledge with data analytics technology to pinpoint risks and potential danger areas.

Consumers hold businesses responsible

Consumers are also increasingly aware of problems linked to sprawling supply chains. The horsemeat scandal from 2013 led to a rise in public interest in the topic and it remains an important issue for many shoppers.

A recent UK consumer survey carried out by Globescan found that 92% of people believe it is the responsibility of food companies to ensure the ethical and sustainable nature of their supply chains. Respondents also singled out eradicating child and slave labour as top priorities for the government. Two thirds believe farmers in the UK and abroad are underpaid and should be earning more.

The Walk Free foundation compiled a similar survey last year where two thirds of consumers said they would stop purchasing a product if forced labour was used in the supply chain. This research underlines the belief of the British public that it is up to businesses and governments alike to ensure slavery is eradicated from global supply chains.

Opportunities and change

Working to abolish modern slavery is something businesses can, should and have to do. Initiatives such as Nestlé’s will become the norm rather than the exception as companies begin to focus on protecting their worker’s rights. Tougher regulations, targeted audits focussed on identifying vulnerable links and closer working relationships with suppliers are just some of the tools available.

The benefits of this approach are numerous and quantifiable. Developing more transparent supply chains has the potential to unlock savings and foster innovation, whilst ensuring everyone involved is treated fairly.