It’s been decades since the first big sweatshop scandals but modern slavery and other labour abuses remain a big problem today. It’s just three years since the Rana Plaza collapse that shamed Primark and just this month H&M, normally seen as one of the more ethical fashion chains, caught flack for apparently working with factories that employed 14 year old children.
According to the International Labor Organisation, nearly 21 million people worldwide are victims of forced labour, and even in the UK an estimated 13,000 people are in modern slavery. Despite calls for and some attempts at ‘reshoring’ of manufacturing, supply chains are getting ever more complex, which makes it harder to spot problems.
It’s easy for a small business with tight budgets to overlook these issues. But getting caught buying from a dodgy supplier can come back to bite in form of reputational damage. And on a human level do you really want to be profiting on the backs of abused workers? Here are some things a business can do to keep its supply chain as squeaky clean as possible.
Identify the risks
‘The first step is to identify supply chains that are most likely to be home to significant risk by doing a ‘hot spot’ analysis,’ says Jonathan O’Brien, CEO of procurement consultancy Positive Purchasing. ‘[That’s about] prioritising where to direct effort and starts by thinking about the products, places of origin and processes where there are known or most likely to be issues.’
High risk countries might be ones with large amounts of poverty or high levels of discrimination against women or a specific ethnic minority, says Opus Energy’s director of procurement Kevin McLoughlin.
Audit your suppliers
The only way to be (fairly) sure your products are produced in safe factories with reasonable working conditions is to visit them yourself. ‘There is no substitute for local knowledge and representation,’ says O’Brien. ‘If it matters how your key ingredient or component is made then the only surefire way to be in control is to visit and work first hand to ensure things are as you want them to be.’
‘Audits are absolutely key - you need the right to audit as a clause in your contracts,’ adds McLoughlin. And make sure you have somebody who can do so in the local language.
Small businesses can tackle this issue more effectively if they work together. ‘If a business knows that it’s in a competitive market that’s also buying from a high-risk supply chain, there is an opportunity for that company to work with other businesses,’ says McLoughlin. ‘It’s not satisfactory to say we’re too small. By working with other players collectively you could use that to seek improvement.’
‘There are agencies out there that will do auditing for you of a certain standard,’ says Nick Miller, head of FMCG at supply chain consultancy Crimson & Co. ‘So if you’re a smaller company you might not have a bunch of people to do it but there are organisations that can do that.’
Abiding by the modern slavery act
This was passed last year. For companies with a turnover higher than £36m, 'The UK government now requires a statement on slavery and human trafficking each financial year with the expectation that these will be clear and public, and refer to steps taken to combat the issue within their organisation,' says Debbie Day, a partner at insurance broker Lockton. 'Criminal offences have been set out for those businesses that knowingly hold another person into slavery or servitude or force them into compulsory work, and the powers of border forces and the police have been increased to tackle those responsible.'
Make it easy for anyone working for your suppliers that has concerns to come forward. ‘You need to make sure that’s handled sensitively and that any that do come forward are protected,’ says McLoughlin, who suggests it might be worth setting up a whistleblower hotline. ‘That might not be possible for a small business but perhaps a medium-sized one operating in high-risk countries.’
Look closer to home
Forced labour isn’t confined to developing countries. ‘Have a look at the people you employ, whether it’s cleaners, constructors or food service front of house teams,’ says Cristina Talens, an academic at Hull University’s Institute for the Study of Slavery and Emancipation. ‘If you use agencies for labour, ask them what they are doing to make sure that people are not exploited.'