From the December 2022 print edition
Like millions of fans, I have recently enjoyed my favorite sports event, the FIFA World Cup.
This year however, the event has brought to light more than the Beautiful Game. This year highlights the death of over 6,000 migrant workers in Qatar over the past 10 years under low-wage, dangerous and hard labouring conditions. Overshadowing this year’s games is the stain of modern slavery.
Within the context of supply chains, modern slavery is defined as the exploitation of workers anywhere along the chain from the extraction of raw materials to construction, manufacturing, logistics to final product or service delivery. Modern slavery takes various forms: debt bondage, forced labour, child slavery and human trafficking. It currently affects approximately 49.6 million people, a quarter of which are children, and more than half of which are trapped in labour camps, according to the International Labour Organization.
Buying firms play a key role in helping eradicate this practice. Doing so, however, is not an easy task. Modern slavery exists buried further down across multi-tiered supply chains. Lack of transparency across all nodes often makes it difficult for buyers to identify issues.
In this context, auditing has become one of the tools most used. The challenge with auditing is how to avoid them turning into a “tick-the-box” exercise that leads to mock compliance. Faced with the threat of losing business relationships with their customers, suppliers can see audits as just another “jump-through-hoops” step with little significance and no real consequences. At times they can pass by hiding information, producing false records, and simply cheating. Isolated corporately mandated audits from a buying firm on the other side of the world and no meaningful connections to the reality on the ground are perceived more as a way for buyers to clear themselves of liability rather than to improve working conditions in country.
Instead, an approach that has seen better results is to shift from arm’s length compliance management to supplier development. Workers are closer to the issues being audited and the socioeconomic reality
of the markets where the supplier operations are located. Therefore, involving workers in the design
of the audit is an important step to add legitimacy and efficacy to the process. This takes worker collaboration and education to facilitate detection and remediation.
In complex markets it can be hard for buying organizations to go at it alone. Instead, buyer consortiums can add uniformity and weight to the auditing process by providing a unified voice to set expectations for working conditions and rights. Working with NGOs is another key strategy that many firms have relied upon to improve auditing efficacy. NGOs with a presence in country can work bottoms up to foster relationships with workers, suppliers, and third-party recruitment firms to better detect, mitigate and remediate indicators of modern slavery.
From a corporate and legal compliance perspective, Canada is still in the process of enacting Bill S-211, which puts in place the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff. While it comes short compared to similar pieces of legislation overseas, in that it focuses on reporting obligations rather than due diligence requirements, this bill will be an important step forward to drive businesses to take proactive measures and build programs and processes that address child and forced labour, including remediation, and to provide training to employees on these matters. Other bills, like Bill C-262, focuses on corporate responsibility to prevent, address and remedy adverse impacts on human rights occurring in relation to business activities conducted abroad and Bill C-243, dealing with eliminating forced and child labour in supply chains, are also being reviewed and will eventually help by respectively imposing a duty on international operations to avoid adverse impacts on human rights, and introducing an inspection regime to be managed by the Minister of Public Safety and Emergency Preparedness.
Supply chain managers will remain at the forefront of the battle to root out all forms of modern slavery from large, interconnected supply chains, through strategic and judicious supplier selection, collaboration and development, as well as by working closely with in-country industry and trade organizations, as well as local NGOs. After all, doing so is not only morally right, but part of their duty to management and shareholders in driving efficiency and reducing financial and reputational risk in global operations.