Combating forced labour remains one of the most complex, frustrating, and necessary struggles facing modern supply chains. In the process of developing sustainable procurement practices, the shadow of modern slavery casts a long shadow over a bright future.
According to a Gartner survey, more than 70% of procurement leaders consider addressing modern slavery risk a key priority. However, only half reported making any effective progress on the issue.
Modern slavery casts a shadow over all supply chains
“Modern slavery is a risk to almost all supply chains,” said Laura Rainier, Senior Director Analyst at Gartner. Regrettably, it’s also “one of the most challenging risks CPOs have to address” she adds. The process of rooting out forced labour in the supply chain, Ranier continues, requires visibility. The problem is that, this requires CPOs to not only create that visibility throughout “multiple tiers of suppliers”, but also “address issues in areas of the supply chain that traditional due diligence processes often fail to reach.”
Around the world, just under 50 million people live in modern slavery. According to Walk Free, the International Labour Organisation and the International Organization for Migration, the number has been rising—both in terms of forced marriage and forced labour.
January was Human Trafficking Awareness Month. Tackling the issue has never been more relevant as the procurement sector itself transforms, using new strategies and technology to act more strategically and with greater emphasis on ESG initiatives. Anyone who is forced to work without pay, under threat of violence, is economically exploited or is unable to walk away is considered to live in modern slavery. Around the world, modern slavery thrives in murky, opaque supplier ecosystems, where the ramifications spread across billions of dollars worth of the downstream value chain.
In the west of China, more than a million Uighurs are estimated to live in modern slavery. Uighurs, members of China’s muslim minority population, have a direct role in procuding approximately one fifth of the world’s cotton.
CPOs must drive “radical visibility” to combat slavery in the supply chain
“I’ve worked at the intersection of human rights and supply chains for over a decade with experience at both ends, from the children pulling minerals out of the ground to the CPOs who procure them. The challenge isn’t finding leaders who care. The challenge is the opacity of our supply chains,” says Justin Dillon, CEO of FRDM. He adds: “it’s time for procurement to lead the supply chain transparency movement.”
According to Gartner’s research, CPOs can play a pivotal role in addressing modern slavery risk within their value chains. In order to do this, CPOs need to be drivers of “radical visibility” within their supplier ecosystems.
Rainier explains that companies can harness publicly available data to build “a general map of the commodities and countries with the highest risks.” There are other risk management solutions that automatically scrape news feeds and other sources like government crime statistics and police reports for emerging risks. Then, Rainier added, companies can look at recruitment corridors where migrants typically come and go, and where forced labour risks can be higher.
When scrutinising the Tier-2 and Tier-3 supplier relationships most at risk via geography or commodity source, Rainier notes that achieving data visibility among these suppliers requires a mix of incentives and contractual obligations, and that technology will play a critical role in enabling the ability to map supply chain visibility.
