What To Do When Slavery Is Revealed In Your Supply-Chain

It’s the stuff of every CPO’s worst nightmare; finding evidence of slavery within their organisation’s supply-chain. Sadly, it’s probably more common than you think…

It’s relatively easy to turn a blind eye to modern slavery, particularly when it’s not happening on your own doorstep.

It’s also easy to assume that modern slavery isn’t a prevalent issue in today’s society.

But the stats don’t lie. The Global Slavery Index 2016, produced by the Walk Free Foundation, revealed that over 45 million people are estimated to be affected by modern slavery, more than in any other period in history.

58 per cent of those living in slavery are based in five countries:

• India
• China
• Pakistan
• Bangladesh
• Uzbekistan

India, China, Pakistan and Bangladesh all provide low-skilled labour for industries such as food, production, textiles and technology. Uzbekistan is a major cotton exporter.

The Global Slavery Index, which resulted in 42,000 interviews spoken in 53 languages across 25 countries, helps governments, organisations and communities to stay focussed on eradicating modern slavery wherever and whenever it occurs.

Perhaps, given the overwhelming statistics, it’s a case of when, not if, modern slavery will be discovered within your supply chain.

So what do you do when it is?

Red Flags: What will you find?

Firstly, it’s important to understand and look for the red flags, which might be extremely subtle. The likelihood of modern slavery is increased in conflict zones and unregulated sectors, particularly if the jobs are low-income and do not require education or specific skills. Migrant workers, women and children are among the most vulnerable.

Circumstances when passports or identification documents have been removed, excessive recruitment fees are subjected upon migrant workers or subcontractors further outsource work without prior consent are all indicators of exploitation.

Encountering one of these situations may not in and of itself amount to modern slavery but your organisation mustn’t assess anything  in isolation. It’s important to look for the series of signals in order to  decipher whether they paint a clear picture of modern slavery.

Developing a Corrective Action Plan For Modern Slavery

Fiona David, Executive Director of Global Research for the Walk Free Foundation, has some words of guidance and reassurance “My first tip would be ‘don’t panic’.  We know that modern slavery exists in supply chains, so if you find it, you are looking in the right places. The issues that are identified will drive the response”.

Companies responding to modern slavery should develop a corrective action plan based on two fundamental priorities:

1. The first is short term priority; immediately protecting the victims involved in order to end the abuse
2. The second is the long term priority.  Companies must find solutions to eradicate the underlying problem which allowed modern slavery to exist in the first place. This may require fundamental shifts in business models or the nature of supplier relationships

These two priorities should underpin every company policy, which should be focused on finding solutions rather than punishments. Critically, those within the organisation and supply-chain must feel safe and confident to speak up, and not fear punishment or recrimination.

Advice from the Walk Free Foundation

• Be open about what you’ve found: “Companies such as Marks and Spencer, Nike and Rio Tinto and Fortescue Metals Group have all been open about risks identified and violations.”
• Collaboration is key: Fiona is keen to remind organisations that “no one company can address [modern slavery] in isolation.” Organisations must collaborate with suppliers, competitors in the sector, governments, NGOs, and civil society.
• Does your organisation have a part to play? Perhaps the culture within your organisation has fuelled the occurrences of modern slavery within your supply chain. Maybe you’re applying unrealistic pressures and time frames? This could be inadvertently encouraging suppliers to use unreliable operators resulting in excessive working hours or under unacceptable work practices.
• Grievance Mechanisms:These are a formal way for workers to lodge complaints and resolve working condition problems. As well as improving employee satisfaction and productivity, these are crucial in safe guarding workers’ rights. Safe helplines or whistle-blowing procedures must, Fiona explains,  “be freely accessible in appropriate languages, regions and throughout your supply chain, without fear of recrimination.”

What not to do

It might have crossed your mind that an easy solution to tackling, or simply avoiding, modern slavery in your supply-chain would be to pull out entirely from high-risk countries.

Removing Bangladesh, for example, from your supply-chain could be a quick solution to a complicated problem, right?

Wrong!

Communities in countries with high proportions of modern slavery are in desperate need of the economic opportunities your organisation provides. Taking your business elsewhere would only worsen the situation.

Fiona explains the importance of global supply chains because they “create employment and other opportunities for economic and social development, and pathways to help those break the cycles of poverty.” Similarly “immediately terminating supplier relationships is often not the right answer because it can drive the issue further underground.”

The correct, and most socially aware, response is to continue sourcing from these high-risk countries whilst ensuring you have credible audits and systems in place to address any potential problems.

Fiona also makes the important point that “Modern slavery occurs in every country whether developed or under-developed” and so it cannot be avoided simply by vetoing certain countries.  “A recent case found Hungarian workers being exploited in conditions described as ‘modern slave labour’ in a factory in Yorkshire, England.  This factory produced beds, which were supplied to British high street retailers such as John Lewis and NEXT. ”

Procurement needs to share the work load

“Procurement teams are on the frontline,” Fiona asserts. “They manage supplier relationships, they understand the business, the risks and the regions in which they operate. The indicators of modern slavery, being a grievous crime, is actually quite easy to identify, when you know what you are looking for.”

But advocacy groups and investigative reporters mustn’t be the sole figures doing the digging to reveal incidents of modern slavery.

“CSR and Procurement teams should work together across the sectors on these issues, as addressing modern slavery is a “pre-competitive” issue.  Companies can’t compete on sub-standard ethical and criminal practices.”

Searching for modern slavery within your organisation and acknowledging its presence might be one of the tougher pills to swallow but any CPO with a conscience would prefer to reveal and address it head-on. Surely that’s better than burying heads in the sand?

And, as Fiona reminds us “Not only is it the right thing to do morally, but it is also legally required. With laws in the UK, EU and US and debates in Australia about whether to adopt equivalent laws, increasingly it is no longer a voluntary issue, businesses must look at these issues and report on them.”

Fiona David, Executive Director of Global Research,  Walk Free Foundation, will be delivering a keynote speech at PIVOT: The Faculty’s 10th Annual Asia Pacific CPO Forum.