The scale of the modern slavery issue and procurement's role in tackling it
“Modern slavery exists in all of our supply chains and anybody who says: ‘There is absolutely no modern slavery in my supply chain, full stop’, is lying.” claims Chris Harrop, Group Sustainability and Marketing Director at Marshalls plc. Harrop has spent fifteen years combatting modern slavery at the FTSE 250 Manufacturing company and was also a fellow speaker at the CIPS UK Conference 2019, alongside Crossword’s own Jake Holloway.
Harrop’s comments outline the sheer scale of the problem. The proliferation of complex global supply chains combined with limited visibility of these, has helped modern slavery to thrive. Worldwide, there are an estimated 40.3 million people living in modern slavery according to the Global Slavery Index. Modern slavery is often regarded as an issue limited to developing countries. However, forced labour reportedly exists in every country of the world and exploitation in the developing world often flows into supply chains that wind up in the West. The allegations by Oxfam of abuse in UK supermarket supply chains last month is a prime example of this.
The UK Modern Slavery Act introduced in 2015, has gone some way to tackling this issue. Section 54 requires large businesses to publish an annual statement outlining the actions and due diligence that they have undertaken to ensure that slavery does not occur within their own organisation or anywhere in their supply chain. The act applies to every British or foreign organisation that conducts business in the UK and has an annual turnover exceeding £36 million. Critics of the act argue that it is too lax, since the content of these statements are not mandated, and it is possible for companies to release a statement claiming they have undertaken no action to reduce slavery.
Despite these minimal reporting requirements, alarmingly the Modern Slavery Register found that only 23% of 7,500 eligible UK companies were legally compliant with the Modern Slavery Act. Chris Harrop insists on a call to action for fellow Procurement professionals to address this. He pushes for companies to not only comply to the Modern Slavery Act, but also exceed its minimum requirements. His own organisation, Marshalls plc, has gone the extra mile to eradicate Modern Slavery in its supply chain, by replacing traditional auditors with undercover workers in India and China (areas where modern slavery is especially prevalent) in order to unearth issues that may not be apparent when suppliers are given forewarning of audits.
Procurement professionals have a vital role to play in sourcing in a manner that permits and rewards suppliers for ethical employment practices, rather than purchasing in a way which exacerbates the practice of modern slavery. Procurement professionals have visibility of and critical influence over supply chain decision-making; especially how suppliers and tenders are evaluated, the level of due diligence carried out, and in implementing risk management systems.
With great power comes great responsibility. Procurement professionals have a duty to establish policies that will prevent, detect and eradicate modern slavery within their supply chains. Supply chain mapping should be undertaken and modern slavery assessments sent to all suppliers to identify where potential vulnerabilities may lie. Modern slavery audits should be conducted for key suppliers and they should be continuously monitored. Contractual requirements of new and existing suppliers should be introduced which align to the company’s own modern slavery checklists, and whistleblowing should be encouraged for non-compliant suppliers. Where corrective action is needed, if suppliers are unable to carry out remedial action to eliminate modern slavery, relationships should be terminated and alternative suppliers sourced.
If not, organisations found to be sourcing from suppliers that take advantage of exploitive labour are at risk of reputational damage, legal sanctions, customer attrition and loss of market share. Conversely, ethical procurement activi
ty encourages investment and improves company morale. Working closely with suppliers also enables improvements in quality, productivity and engagement.
As a platform for managing supplier risk, Rizikon Assurance can help you to gain visibility of modern slavery issues that exist in your own supply chain. If you would like to take the first step in eradicating modern slavery in your supply chain then contact us here.