THE SILENT "S" IN ESG.
Have efforts against modern slavery been left behind?
As I wrote this piece, I Googled “sweatshop deaths” and it returned a whopping and sobering 140,000 posts to read.
So it's hard not to become deeply disheartened by this article from the Guardian reporting the shocking rise of people enslaved across the world - 10 million more people (a 25% increase) in a mere six years.
We were left horrified by the report of 39 Vietnamese migrants who died in a lorry in Essex, UK in 2019. A short three years later in June 2022, we read about the unimaginable deaths of 53 Mexican migrants who were smuggled across the US border only to suffer a similarly horrifying fate once their truck driver abandoned them on the outskirts of San Antonio, Texas.
Image credit: The Guardian Joy Saha/Zuma/Rex
And still the numbers rise. This article by the Guardian cites that “more than half (52%) of all forced labour and a quarter of forced marriages are occurring in high-income or middle-income countries.” The irony being that most of the wealthy G8 countries either have existing legislation or proposed laws coming into play to combat modern slavery.
UK – their UK Modern Slavery Act was one of the first to pass and is considered by many to be the gold standard for federal legislation
France – active legislation
Netherlands – active legislation
Germany – pending (The Supply Chain Due Diligence Act – takes effect from 1 Jan 2023)
EU – pending (The Corporate Sustainability Due Diligence Directive – outline adopted, legislation pending)
Australia – active legislation
Switzerland – indirect legislation anchoring human rights to mandatory environmental reporting
United States – no federal law as yet outside of an indirect law (HR 644) which was passed in 2016 to cement fair trade practices and eliminated a trade loophole that previously allowed some imports into the United States made, in whole or in part, with forced labor. California State holds the only comprehensive legislation similar to the UK Modern Slavery Act
Canada – pending (Bill S-211) which will be similar to the UK Modern Slavery Act
Other countries like New Zealand have proposed plans for a similar act, and many like Brazil, Malaysia, and Singapore, have anti-slavery language in their policies or constitutions and are working to build the infrastructure for real oversight and enforcement. But tourist hotspots like Cambodia, Laos, Vietnam and dozens of other countries (China, India, Indonesia for example) have no currently pending bills to introduce enforceable modern slavery legislation.
As someone who's spent the last several years overseeing and speaking about sustainable supply chains (now universally called ESG), I always felt proud at the end of project where we planted a flag – in policy and process form – against modern slavery and supply chain risk, but this is a stark reminder to all of us to not be complacent about what real policy oversight and responsibility means.
As many critics of modern-slavery policy will say, it’s not enough to create the policies and create lists of suppliers to observe if you don’t have the tools and infrastructure to do something about it. It’s just window-dressing.
Journalist Suyin Haynes wrote in her 2019 Time article about the slow progress of modern slavery laws calling out the real problem that progress was being undermined by too much reporting and not enough teeth.
The same observation is true in corporations. Even if your country doesn’t have a federal law mandating supply chain/anti-slavery disclosure statements, CEOs and CPOs have a duty to ensure their supply chains are operating both within a legal and an ethical framework. Procurement leaders should ensure these basics exist:
Supplier Code of Conduct: setting out their ethical responsibilities for doing business with your company, including zero tolerance in regard to slavery, servitude, unpaid labour or unhealthy/inhumane working conditions.
Supplier contracts committing to the above Code of Conduct as well as a provision for periodic physical audits of the performed operation (be it the production of goods or services).
Supplier performance reviews, which for your Tier 1 & Tier 2 suppliers should include an annual summary of their 3rd party supply chain with basic statistics or a heat-map indicating the location of goods and services in the delivery of the end product. Why? So it can be audited should you need it. See my point below about computer batteries.
The modern slavery crisis is not some obscure thing that sits out of reach from us. It’s a huge, multi-billion dollar business in high demand in the richest countries of the world. Our ability to influence it is closer than we realize. Laptops, computers and mobile phones are listed in the Top 20 products for being high risk of modern slavery in their production. Why? Because the cobalt used for batteries is often being mined by children. And you needn't look far on Google to find the infamous lawsuit brought by human rights groups and Congolese families against Apple, Google, Dell, Microsoft and Tesla for knowing that their supply chains "involved forcing impoverished children into extremely dangerous full-time labor....sometimes resulting in death".
The necessary work to combat this starts at the office, on the shop floor, in the engineering room, and in the board room.
Image credit: Monusco/Sylvain Liechti, Flickr. CC-by-SA 2.0.
In the Congo alone, in 2021 it was estimated 250,000+ were mining for Cobalt, of which 40,000 were children, some as young as six years old.
In addition to the basics outlined above, to achieve deep insights on your supplier portfolio, you need good, reliable, unbiased data to monitor your suppliers properly. And not all of that data can be farmed from internal systems. Here’s a short list of companies that may be able to help you to track and report on modern slavery in the supply chain, the rest you can find online:
Stay committed. It matters.
Kelli Wilks is Management Consultant at Spring CPO where she advises clients on ESG priorities, procurement transformation, negotiation strategies, and supplier performance.