When you think about managing business risk, modern slavery is probably the last thing that comes to mind. Since slavery is illegal everywhere, it shouldn’t even be a concern, right?
Wrong. Nearly 36 million people, more than at any other time in history, are trapped in some form of slavery, according to the second annual Global Slavery Index. Produced by the Walk Free Foundation—a global organization with a mission to end modern slavery by mobilizing activism, generating high-quality research, enlisting business engagement, and raising capital to drive change—the Index is recognized as the seminal authority on modern slavery, which includes human trafficking, forced labor, and other slavery-like practices such as debt bondage and the exploitation of children.
What’s more, modern slavery is big business. Slave labor contributes to the production of at least 122 goods from 58 countries, and the International Labour Organization calculates that forced labor generates US$150 billion annually in illicit profits worldwide, with US$32 billion in the United States alone.i Walk Free warns that the majority of companies will be exposed to some risk of forced labor or slavery in their supply chains—and it’s not always obvious. Read more
Business most often comes into contact with modern slavery where there are complex global supply chains. One of the most important challenges for procurement professionals is therefore to ensure that their supply chains do not unwittingly involve exploitative labour, and that they are as far as possible ‘slavery proof.’
As a seller, you not only form part of your customers’ supply chains, but also have one yourself—based on the items and services you purchase to support your own business. In either instance, having a connection with slavery can prove disruptive, damaging, or both. Common practices that make a company particularly vulnerable include:
- Doing business across borders and in countries with weak regulatory environments
- Relying on migrant workers recruited by labor agencies or brokers
- Having a multi-tiered supply chain, with layers outside your immediate control
- Purchasing raw materials from at-risk industries
- Using subcontractors or illegal immigrants for cleaning and other low-skilled tasks
If your largest customer suddenly required proof that your operations are above reproach and started asking questions like those in this self-assessment questionnaire, would your company pass the test? That day may come soon, and when big businesses start raising their standards, the trickle-down effect on smaller sellers can be enormous. Aside from the obvious moral implications, consequences can include lower sales, loss of market share, and potentially irreparable harm to your brand.
Need additional resources?
Modern Slavery by ibe
Modern Day Slavery by Sedex Global
Tackling Modern Slavery In Supply Chains by Walk Free Foundation