shopify stats
Human Trafficking Center

Supply Chain Transparency: Responses from Above and Below

13

Jan 2016

0

 

by Jeanne Crump, Research Projects Manager

With recent news about shrimp peeled in Thailand using forced labor and then being sold in American retailers like Whole Foods and Walmart, issues with ethical labor in supply chains have been at the forefront of public discussions.  There are the usual calls for boycotts and lawsuits.  However, legislatures, corporations, and consumers are beginning to make efforts to tackle this daunting problem, and some of their efforts and responses in supply chain compliance are examined below.

Responses from Above

Governments are making efforts to provide consumers with information on the products they’re buying. The California Transparency in Supply Chains Act of 2012 requires retail sellers and manufacturers doing business in the state with retail sales of more than $100 million to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains. According to the US Department of Labor (DOL), the reporting requirement will impact about 3,200 companies.

In addition, just this year the United Kingdom enacted the Modern Slavery Act that included a Transparency in Supply Chains provision. Under the provision, commercial organizations exceeding worldwide gross receipts of $56 million who sell goods or services in the UK must  publicly publish a slavery and human trafficking statement for each financial year that includes steps the corporation has taken to ensure that forced labor is not taking place in any of its supply chains.

Within companies, Corporate Social Responsibility (CSR) programs have become large initiatives. GAP’s CSR trafficking prevention programs employs roughly 30 employees who collect data through announced and unannounced visits to nearly all the vendor factories (95-100% depending on year and region). GAP uses the Code of Vendor Conduct (COVC) as the backbone for the assessment that details over 700 potential violations of Human Rights.

Responses from Below

Much of the effort in battling forced labor in supply chains can be seen through the use of online tools.  For example, Made In A Free World is an online software tool that aims to locate and address slavery and child labor in the supply chain. Used by buyers and suppliers, the tool identifies “hotspots of risk” in supply chains and create “a customized action plan” for businesses trying to combat the issue. Their method of doing so involves comparing purchasing data of a company against their Global Slavery Database comprised of over 54,000 goods, services, and commodities.

Products of Slavery, created by Anti-Slavery International, is an online visualization tool that shows on an interactive map the products that are likely to be produced using child or forced labor. Clicking on a specific location provides a brief description of the most prevalent forms of slavery found in that region as well as the products most likely produced using forced labor.

Verité is a leading not-for-profit research agency that conducts independent audits for businesses and governments. Within Vertité’s supply chain accountability program, they interview workers to “offer insight into on-the-ground working conditions.”

How effective are these responses?

It is too early to assess the UK Modern Slavery Act, but the California Transparency Act may be creating a peer pressure effect in that more and more corporations are receiving pressure from both their stakeholders and consumers to be more accountable and responsible.

According to 2014 research study conducted jointly by the American Bar Association and Arizona State University, it was found that among the 79 Fortune 100 (U.S. based) companies whose supply chain policies were analyzed, 66 percent has publically available policies related to human trafficking and 76 percent had policies related to forced labor. As noted in the study, “The fact that many, although not all, of the companies researched have publicly available policies on these issues is a positive sign.”

In 2013, The Guardian published “Slaves in the Supply Chain: 12 ways to clean up the business.  The first response from Genevieve LeBaron at the University of Sheffield urges companies to stop relying on audits. She explains, “The pathways of audits are currently built around products- not people- so they tend to miss the areas of the labour supply chain that pose the most risk.”

While auditing and other types of monitoring are laudable, these processes are frequently manipulated, which makes it difficult to know what labor conditions actually are.  In addition, the actual auditing framework may completely omit the need to inspect labor issues, and may just pertain to efficiency and product quality.

This is not to say all audits and auditors are ineffective or corrupt. As explained by Kevin Bales, co-founder of Free the Slaves, those who say audits are misused or untrustworthy are really referring to a larger group of companies or institutions that conduct commercial audits.

There is also a lack of rigorous studies. The industry itself is left with a handful of the same reports producing the same data- such as the DOL’s List of Goods Produced With Child Labor or Forced Labor, which was found cited as a source in many of the NGOs and research agencies supplying consumers’ information on products.

The onset of CSR programs and legislation demanding transparency is progress. However, more needs to be done to prevent worker exploitation, improve auditing tools, and holding large corporations accountable for putting resources into monitoring their supply chains and ensuring basic human rights for all workers they directly or indirectly employ.

Image via The.Rohit

Print This Post Print This Post

Leave a comment