Modern Slavery in Today’s Supply Chains

September 22, 2015

Written by Alexa Cheater. This post originally appeared on the Kinaxis industry blog, The 21st-Century Supply Chain

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I used to think slavery was, for the most part, a thing of the past. An abhorrent practice that was abolished for very good reason, and a constant reminder that human life has tremendous value and as such should be respected and honored. I used to think there was no way slavery would ever have a place in modern society, that no one would allow such a practice to exist outside the most desolate and desperate places on Earth. I used to have my head buried in the sand.

The sad reality is that slavery, in all its unpleasant forms, exists much closer to home and in much greater numbers than I ever expected. Traces of it can be found virtually everywhere. In the clothes on your back, the shoes on your feet, the food that you eat, and even the computer, tablet or smartphone you’re likely reading this blog on. How? Through the supply chain.

Modern slavery is one of the supply chain industry’s dirty little secrets, but thankfully, governments in the US and UK are attempting to wash it clean, working to put a stop to a problem that should never have been allowed to exist in the first place. Or at least, they’re trying to.

As the Wall Street Journal (WSJ) reports, new rules recently announced by British lawmakers will require companies “to give an annual disclosure detailing efforts to root out slavery and human trafficking in their global supply chains.” The new provision, which is part of the broader Modern Slavery Act enacted in March, will impact more than 12,000 UK companies whose global revenues each total more than 36 million pounds. It’s based on California’s Transparency in Supply Chains Act, which was passed in 2010.

The problem is, both laws only require companies to disclose their use of slave labor, not actually put an end to it. So how is this going to solve the supply chain slavery issue?

The WSJ cites a statement made by Britain’s Home Secretary Theresa May, in which she says the new law will provide a “strong incentive” for companies to take action, allowing “investors, consumers and the general public to decide who they should and should not do business with.” I question how many will actually take the time to read all 12,000+ statements to determine who is and who isn’t using slave labor.

In a related article by the Guardian, David Noble, chief executive of the Chartered Institute of Procurement & Supply, points out just how pervasive this issue is, saying 11% of British business leaders report modern slavery likely already plays a role in their supply chains.

The British Standards Institution (BSI) has also raised the alarm regarding slavery in the supply chain, releasing a new Risk Index Report identifying China, India, Vietnam, Bangladesh and Myanmar as the five highest risk countries for human rights violations.

According to a Forbes article, “These countries account for 48% of global apparel production, 53% of global apparel exports and 26% of global electronics exports – making it very clear which are the industry sectors most likely to be at risk.”

Forbes quotes Courtney Foster, Supply Chain Solutions Manager EMEA at BSI Group as saying, “Consumers do not accept ignorance as an excuse in today’s age. Brands need to find ways of obtaining supply chain intelligence in areas such as ethical, environmental and human rights by using industry designed pre-qualification frameworks and information tools.” That’s something I’ve discussed in the past and wholeheartedly agree with.

Mike Bailey, EMEA Director of Professional Services at BSI also told Forbes, “Some organizations underestimate the damage that can be caused by not adopting and enforcing ethical practices across their supply chain. Command and control from the center means nothing if it is not rigorously monitored and enforced. For too long, extended supply chains have obscured ethically questionable practices.”

Across the pond, US Representatives Carolyn Maloney and Chris Smith are also now wading into the fray, introducing the Business Supply Chain Transparency on Trafficking and Slavery Act of 2015, which requires public companies with over $100 million in global gross receipts to publicly disclose any measures to prevent human trafficking, slavery and child labor in their supply chains.

In a statement, Smith said, “Some companies may participate knowingly in human trafficking to pad the bottom line; others are willfully ignorant of where and how their inexpensive products are made; and still others simply do not know.”

The introduction of that bill followed the release of the US State Department’s Trafficking in Persons Report 2015, which upgraded Cuba and Malaysia’s status but left Thailand at the lowest level after it received a downgrade last year. The WSJ says, “Governments in the lowest tier could see the US government withhold non-humanitarian, non-trade-related foreign assistance. These countries could also see the US oppose giving them aid through international financial institutions like the World Bank.”

In an announcement of the report results, US Secretary of State John Kerry pointed to an article the New York Times about a Cambodia boy who found himself held by armed men and pressed into service on the sea, shackled by neck to a boat, saying, “If that isn’t slavery and imprisonment, I don’t know what is.”

The Associated Press has compiled parts of Kerry’s speech into a video clip, where he discusses how this has become a “battle against evil.” I couldn’t agree more.

So then, what can be done to tackle modern slavery in supply chains? The Walk Free Foundation, an organization attempting to end contemporary slavery and human trafficking, has published a very informative guide on this very topic, Tackling Modern Slavery in Supply Chains. It provides some great insight and tools on how to effectively evaluate your supply chain.

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