Supply chain barriers stall business ‘journey’ to end modern slavery, report finds

Almost exactly a year to the day since the Modern Slavery Act came into force in Britain, a new report has found that business efforts to address modern slavery face several risks and barriers such as supply chain complexity, commercial priorities and transparency dilemmas.

The Ethical Trading Initiative (ETI) and Hult International Business School have investigated corporate leadership responses to modern slavery within 71 leading companies including Marks & Spencer (M&S), Coca Cola and Nestle ahead of the first anniversary of the Act tomorrow (29 October).

The report found that companies have made significant progress in combating modern slavery since the Act was introduced, with twice as many boardroom executives now actively involved in addressing modern slavery in global supply chains. But while virtually every company understands the reputational risk of finding modern slavery in the supply chain, most are reportedly struggling to meet the demands of the Act.

ETI’s head of knowledge and learning and report co-author Cindy Berman said: “At the strategic level, senior leaders in progressive companies are stepping up to the plate and recognising their responsibilities. But even for these companies, their journey to tackle endemic human rights risks in their businesses is just beginning, and none can confidently say they have cracked the problem.”

“But we were pleased to see a recognition by companies that in addition to getting their own house in order, they need to work with others, engage with governments, and call on independent advice and expertise.”

Supply chain issues

The report finds that companies are facing numerous barriers in addressing modern slavery, with the majority of respondents highlighting the need for new skills to deal with specific dilemmas and tensions.

51% of companies cited lack of sufficient resources to conduct due diligence and to support supplier improvements on modern slavery as a key barrier. Commercial pressures mean companies have to manage the tensions between public concern and corporate responsibility to prevent slavery on the one hand, and pressure for buyers to secure the lowest price with their suppliers on the other.

Meanwhile, 42% see the length and complexity of supply chains as one of the strongest obstacles. Companies are beginning to see risks in new areas as they start to map their supply chains, including in logistics operations, warehousing, IT procurement, and temporary and agency labour recruitment.

The study found that one of the key tensions for companies is how best and how long to work alongside suppliers to improve working conditions, whilst also having red-lines in place when core standards are not met. According to the report, companies are extremely cautious about how much information they should share publicly, in fear that modern slavery cases found in their supply chains will be publicly “named and shamed” by campaigning groups and the media.

Nevertheless, a number of effective solutions have been put forward to eradicate these barriers. Leading companies are tackling the transparency dilemma by making their supply chains and modern slavery approaches more visible in public reporting – the paper finds – because they see this as a crucial factor in addressing the issue. They are also collaborating with, and want to partner more with other companies, suppliers, governments, trade unions and NGOs to develop resolutions.

Business efforts

The report comes a week after a survey from the Sustainability Supply Chain School found that more than half of construction businesses would not know what action to take if modern slavery was encountered in their supply chain.

In a blog written exclusively for edie by human right consultancy CLT envirolaw, the firm’s director Colleen Theron provided a list outlining 10 steps that companies should take to get a handle on modern slavery and human trafficking.

The Modern Slavery Act (MSA) was heralded as a first for Europe on its pre-Brexit introduction. In the wake of the Brexit vote, Theron commented that there is a danger that the UK might lose its influence on EU-wide law and policy on slavery.

George Ogleby

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