Recognition is growing that modern forms of slavery are a global phenomenon and thus represent a vital focus for humanitarian and CSR initiatives worldwide.
The Walk Free Foundation, which monitors ‘all of the practices that trap people in modern servitude, including human trafficking, forced labor, and slavery’ across 167 countries, estimates the number of those affected around the world to be 35.8 million. Findings are published in the Global Slavery Index (GSI).
Migrants can be especially vulnerable to trafficking and to exploitative labor practices, the most severe of which produce conditions of slavery. Human migration is driven by factors including war, poverty, human rights abuses and climate change, and, according to the International Organization for Migration, approximately one in seven people today is a migrant, with absolute numbers increasing.
The Business Context
Companies need to be vigilant in monitoring their supply chains at home and abroad because practices that permit modern slavery to continue are nowadays found in an increasing number of locations, including in countries with historically good human rights reputations. Failure to satisfy legislative requirements and consumers’ ethical expectations can result in sanctions such as fines and custodial sentences or in consumer boycotts.
Exploitative labor practices including slavery may be particularly prevalent in workplaces such as produce and garment factories; farms that require seasonal labor for picking and packing; and private households that take on residential domestic workers. Many of these sites rely heavily on migrant labor.
The Thai fishing industry has received censure for some of its labor practices from its key Western seafood markets, the US and the EU. In response, it must balance its need to preserve these markets against the risk of thousands of job losses that corrective action poses. EU representatives are currently re-evaluating the situation on illegal, unregulated and unreported (UUI) fishing in Thailand and a decision is expected soon.
Two large textile retailers recently received negative press coverage because Syrian refugee children were found working in their clothing factories in Turkey. The Business and Human Rights Resource Center (BHRRC), a not-for-profit organization seeking to advance human rights in business, has claimed that ‘Only a few brands appear to have engaged with the extent and the complexity of these issues in their Turkish supply base’ and has spotlighted ineffective investigative practices including preannounced audit visits.
In February 2016 a factory owner from West Yorkshire, UK, was sentenced to 27 months in prison under the UK’s Modern Slavery Act (see below) after an investigation found that Hungarian workers were trafficked, housed in squalid conditions and required to work up to 80 hours a week for negligible pay. As a result of its unscrupulous practices, the manufacturer was able to supply beds to large retailers, despite the retailers having strong audit practices in place.
The Legislative Response
The California Transparency in Supply Chains Act was signed into law in October 2010 and came into effect in January 2012. It requires companies with revenues of over $100 million to report on action they take to rid their supply chains of slavery and trafficking, in order to inform consumer choice. It was originally estimated that the reporting requirement would affect about 3,200 companies based in California or trading there. However, reports have emerged that compliance has been patchy and that, as a result, enforcement has been stepped up and new guidelines issued.
The UK’s recent Modern Slavery Act (March 2015) consolidates UK law on both slavery and trafficking, increasing penalties and extending the range of items covered. It requires companies with a turnover of over £36 million to issue a yearly statement on action they are taking to address slavery/trafficking practices in their supply chain (or to issue a statement that they are taking no action). Practical guidance for businesses is available online.
Despite criticism of the effectiveness to date of the California Act, Kilian Moote, project director of KnowTheChain, claimed in 2015 in an opinion piece for the Chartered Institute of Procurement and Supply (CIPS) that the Act has nonetheless ‘set a global legislative trend in motion’. In addition to the new Modern Slavery Act in the UK, for example, talks are underway in France to discuss legislative reform to combat modern slavery in French companies’ supply chains.
Moote also highlighted the increasing sensitivity of public opinion to unethical business practices and the fact that some companies are now pursuing good practice beyond legislative requirements. He stated, ‘Nearly five years after SB 657 [the California Act] was signed into law, there is a convergence of consumer behavior, public desire for transparency, and legislative engagement’.
What SGS Can Offer
SGS has been involved in social accountability since its inception and has been offering tailored audit services since 1996. SGS can support organisations with a range of services, including evaluating approaches to modern slavery and monitoring supply chains as part of an overall due diligence approach to responsible sourcing. With the largest networks of highly trained auditors and extensive experience of reviewing operations’ capabilities, labor standards, environmental compliance and business integrity, we can support your responsible purchasing policies.
For further information, please contact:
Supply Chain Assessment & Solutions Manager
SGS United Kingdom Ltd
t: +44 203 008 7860
The Global Slavery Index
Walk Free Foundation
International Migrants Day
Asia One Business
Corporate Social Responsibility and the Law
United States Department of Labor
The Modern Slavery Act 2015
Know the Chain