Ending Slave Labour in Operations
Supply chain management is an essential business component but can also have a dark side. Companies seeking to optimise their supply chains may become complicit in using slave labour. As an acclaimed business writer, John Elkington, once said, “Slavery was abolished 150 years ago, right? Wrong. It has become a global issue, and it’s time to end it”. This article will explore the dark side of supply chain management and how companies can prevent using slave labour in their operations and supply chains.
Understanding the Issue of Slave Labour in Supply Chains
The practice of using individuals forced to work without pay or under conditions of coercion or deception is known as slave labour. Slavery is illegal in most countries, yet it still occurs, particularly in industries such as agriculture, manufacturing, mining, and construction. These industries often rely on low-cost labour to keep costs down, and many unscrupulous employers exploit vulnerable workers, including children and migrants.
Slave labour in supply chains can be challenging to detect, as it often occurs in the lower tiers of the supply chain. As a result, companies may not be aware that their suppliers are using slave labour; even if they are aware, they may turn a blind eye to it. As the former CEO of Unilever, Paul Polman, once said, “You can only manage what you can measure”, meaning that companies must take proactive steps to identify and measure potential risks of slave labour in their supply chains.
The Risks of Slave Labour in Supply Chains
Using suppliers that engage in slave labour carries many risks for companies. These risks can significantly impact the company’s reputation, bottom line, and legal liabilities. As a business leader and philanthropist, Richard Branson stated, “A good reputation is more valuable than money”. Using suppliers that engage in slave labour can severely damage a company’s reputation, resulting in a loss of customers, a drop in share price, and negative media coverage.
Financially, using suppliers that engage in slave labour can carry significant risks. Companies using suppliers that engage in slave labour may face boycotts, lawsuits, and fines, which can be costly and impact the company’s bottom line. In addition, companies that fail to prevent using slave labour in their operations and supply chains may also face legal risks, as they can be held liable for human rights violations committed by their suppliers.
Preventing the Use of Slave Labour in Supply Chains
Preventing the use of slave labour in supply chains requires a concerted effort by companies, governments, and civil society organisations. As former U.S. President Barack Obama once said, “Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.” Companies have a crucial role to play in this effort. They can take several steps to prevent using slave labour in their operations and supply chains.
Conducting Due Diligence
Companies should conduct due diligence to identify and address risks related to slave labour in their supply chains. As former U.S. Secretary of State Hillary Clinton highlighted, “Due diligence is critical in assessing potential risks and identifying areas for improvement”. The due diligence involves assessing suppliers, identifying potential risks, and taking steps to mitigate those risks. Companies should also monitor their suppliers regularly to comply with their ethical and legal obligations.
Implementing Codes of Conduct
Companies should implement codes of conduct that set out their expectations for suppliers. These codes should include a prohibition on the use of slave labour and should require suppliers to comply with applicable laws and regulations. As stated by the CEO of Nestle, Mark Schneider, “Transparency is the new currency of business”. Companies should also require their suppliers to implement their codes of conduct and provide regular reports on their compliance.
Engaging with Suppliers
Companies should engage with their suppliers to promote ethical and sustainable practices. This includes training on labour rights, health and safety, and environmental sustainability. Companies should also work with their suppliers to improve working conditions and identify and address potential risks. As former CEO of PepsiCo, Indra Nooyi, once said, “Sustainability is about making a lasting difference for future generations. It’s not just about doing the right thing today, but about creating a better tomorrow”.
Collaboration and Transparency
Companies should collaborate with other stakeholders, including civil society organisations, governments, and industry groups, to promote transparency and best practices in supply chain management. This includes sharing information on suppliers, best practices, and risks. Collaboration can help companies identify and address issues related to slave labour more effectively. As stated by former Secretary-General of the United Nations, Kofi Annan, “We may have different religions, different languages, different coloured skin, but we all belong to one human race”.
Companies should conduct audits of their suppliers to ensure they comply with ethical and legal standards. Audits should be performed regularly and should be independent and transparent. Companies should also require their suppliers to submit to third-party audits to ensure compliance with labour and human rights standards. As emphasised by the CEO of Walmart, Doug McMillon, “Transparency and collaboration are critical in driving positive change in our supply chains”.
Monitoring and Reporting
Companies should monitor their suppliers and supply chains for signs of slave labour. This includes monitoring working conditions, wages, and hours of work. Companies should also report on their efforts to prevent the use of slave labour in their operations and supply chains. This can promote transparency and accountability and help to build trust with stakeholders. As stated by Chairman of the Board of Directors at Accenture, David Rowland, “Accountability is the glue that ties commitment to results”.
The use of slave labour in supply chains is a serious issue that companies cannot ignore. Companies that use suppliers that engage in slave labour risk damaging their reputation, facing legal liabilities, and incurring financial costs. Preventing the use of slave labour in supply chains requires a concerted effort by companies, governments, and civil society organisations. Companies have a crucial role to play in this effort. By conducting due diligence, implementing codes of conduct, engaging with suppliers, collaborating with other stakeholders, conducting audits, and monitoring and reporting, companies can prevent the use of slave labour in their operations and supply chains.
Companies that take these steps demonstrate their commitment to ethical and sustainable business practices and contribute to a better world. British entrepreneur and philanthropist Richard Branson stated, “Business has a responsibility beyond its basic responsibility to shareholders. It has a responsibility to society”.
Here are some valuable websites that can provide additional information and resources on the topic of preventing the use of slave labour in supply chains:
- The Responsible Sourcing Network: This organisation provides resources and guidance for companies addressing human rights risks in their supply chains.
- KnowTheChain: This initiative benchmarks companies’ efforts to address forced labour in their supply chains and provides resources for companies seeking to improve their practices.
- The Ethical Trading Initiative: This organisation works with companies, trade unions, and NGOs to promote ethical trade practices and prevent labour abuses in supply chains.
- The International Labour Organisation: This UN agency sets labour standards and provides guidance and resources for companies seeking to ensure their operations and supply chains are free from forced labour.
- The United Nations Global Compact: This initiative provides guidance and resources for companies seeking to integrate human rights, labour rights, and environmental sustainability into their operations and supply chains.
- The Modern Slavery Helpline: This UK-based helpline provides advice and support for individuals who may be victims of modern slavery, as well as resources and guidance for businesses seeking to prevent modern slavery in their supply chains.
- The Business & Human Rights Resource Centre: This organisation tracks companies’ human rights performance worldwide and provides resources and guidance for companies seeking to address human rights risks in their supply chains.
Main image: Uncanny Valley, Adobe Stock