Slavery and Supply Chain Transparency

Stephen DeAngelis

March 07, 2018

“There’s no doubt that what you can’t see can hurt you,” writes Nick Ismail (@ishers123). “But in today’s connected, digital economy, visibility and transparency have never been easier to obtain — even across complex, global supply chains.”[1] That assertion might be true; but, according to Nithin Coca (@excinit), “Things have improved, but not enough.”[2] One area where transparency needs improvement involves the issue of slavery. Coca writes, “During the early days of globalization, it was relatively easy for corporations to either hide, or be ignorant of, human rights and environmental atrocities committed along their supply chain. … As long as the price was cheap and the quality was good, companies saw little need to ask further questions.”

Ignorance is not bliss

“In the early ’90s,” Coca writes, “when nonprofits and journalists began to undercover vast labor and environmental issues connected to suppliers of large corporations, shining a spotlight on the dark side of the global consumer market. This led to the development of an array of supply chain technologies — RFIDs, remote sensing, satellite monitoring, even blockchain-based tools. Many were marketed as solutions, aimed at making it easier to monitor and respond to human rights and environmental violations along supply chains. The results, however, have been mixed.” The truth of that statement, especially in relation to slavery, is that supply chain transparency is still very much a topic of interest. In fact, David Weaver, an online marketing professional at INFORM, asserts, “Supply chain transparency remains a hot industry topic.”[3] He also agrees with Ismail that technology leaves little squirming room for companies. “Technology,” he insists, “leaves supply chain managers with few excuses if a company is caught in a supplier scandal. Tracking technology is available and highly sophisticated.”

Addressing the slavery challenge

Not all of the blame for nefarious supply chain activities can be laid at doorstep of big corporations. Coca explains, “It turned out that fixing supply chains was a lot harder than expected.” Michael Rohwer (@MjRohwer), Information and Communications Technology Associate Director at Businesses for Social Responsibility, told Coca, “There is definitely a decline in leverage the further away you are from a particular company. Even two degrees of separation is enough to change the leverage formula.”

The fishing industry case study

Back in 2015, Nestlé committed itself to “be an industry leader in determining where the seafood [in its supply chain] is coming from and demanding it is Sourced Responsibly.” Nestlé’s mission became to trace its seafood supply chain, “Through partnerships with key parties, [by] trac[ing] upstream seafood supply chains, monitor[ing] recruitment and labor conditions on fishing vessels, and implement[ing] practices as necessary to meet Nestlé policy goals.”[4] Weaver notes, “The action plan includes the creation of a ‘demonstration boat’ or ‘university’ where boat owners are instructed on best practice fishing behaviors and fair working standards. This hands-on training method allows Nestlé to have a better understanding of where their products and raw materials originate, and can help lead to more sustainable business relationships in the long run. It will also help the company avoid future scandals, thus mitigating a significant risk. These types of training programs show that the topics of supply chain transparency and sustainability have traction within an organization.”

The problem, of course, is that a solitary company, like Nestlé, doesn’t have the power to change a global industry in which there are many players. To underscore that point, Clare Leschin-Hoar reports, “A new report confirms forced labor and human rights abuses remain embedded in Thailand’s fishing industry, years after global media outlets first documented the practice. The 134-page report by Human Rights Watch shows horrific conditions continue. That’s despite promises from the Thai government to crack down on abuses suffered by mostly migrants from countries like Myanmar and Cambodia — and despite pressure from the U.S. and European countries that purchase much of Thailand’s seafood exports. “[5]

She goes on to report the Monterey Bay Aquarium is stepping into the breach. She explains, “The Monterey Bay Aquarium’s Seafood Watch program, known best for its red, yellow and green sustainable seafood-rating scheme, [has] unveil[ed] its first Seafood Slavery Risk Tool. It’s a database designed to help corporate seafood buyers assess the risk of forced labor, human trafficking and hazardous child labor in the seafood they purchase.”[5] Sara McDonald, Seafood Watch project manager for the Slavery Risk Tool, notes, “Companies didn’t know how to navigate solving the problem.” Leschin-Hoar also reemphasizes Coca’s assertion that technology alone is not enough. “Traceability alone,” she writes, “hasn’t been enough. Until now, retailers have had few tools to make it easier to identify which fisheries are actually at higher risk for human rights abuses.” Nestlé’s efforts are both laudable and exceptional. Dick Jones, CEO of Ocean Outcomes, told “No retailer is going to go out and talk much about the fact that there are labor rights issues in the supply chain, but it’s critical that retailers stay in the game and continue to be involved.”

The slavery problem is more widespread than the public assumes

The fishing industry is not the only economic sector in which slavery is a challenge. Brian Alster (@BrianAlsterDnB), Global Head of Supply and Compliance at Dun & Bradstreet, calls slavery a “global crisis.”[6] He explains, “Modern-day slavery is the fastest-growing organized crime in the world. In fact, there are currently more than 40 million victims worldwide, lining human traffickers’ pockets with $150 billion every year. These stark facts underscore the importance of us all paying closer attention, being vigilant and doing our parts to help eradicate this disaster. Meticulous inspection of our supply chains is an essential undertaking — but this is often easier said than done.” Believing there is more technology can do to help expose and eradicate slavery, Walmart, Disney and the British government have joined forces with Humanity United “to create Working Capital, a new investment fund targeted at furthering technological innovation working toward freeing supply chains from modern slavery.”[7]

Jennifer McKevitt (@mckvt) and Kate Patrick (@katepatrick_) conclude, “Best efforts aside, slavery continues to plague supply chains. Though clothing supply chains are among the most common industries rife with human slavery, farm workers too are subject to forced labor demands. Nor is the problem limited to overseas locations; between April and July of 2016, the Department of Labor (DOL) uncovered wage violations at 85% of 77 independent Southern California factories. Attempts to interrupt the seemingly non-stop flow of illegal labor in supply chains have involved everything from worker hotlines to prosecution of management to undercover investigations by members of human rights groups. The problem is a stubborn one, at best, thanks to the rewards involved: an unpaid worker saves that much more on the bottom line, or, in worst case scenarios, means more money in a criminally complicit manager’s pocket.” Profit is an immoral motive for supporting slave labor and it’s in humanity’s best interests to do all we can to eradicate it.

Footnotes
[1] Nick Ismail, “The risk of ignoring risk in the modern enterprise,” Information Age, 19 December 2017.
[2] Nithin Coca, “Technology is failing to create transparent supply chains,” Engadget, 31 July 2017.
[3] David Weaver, “The 4 Important T’s of Supply Chain Transparency,” All Things Supply Chain, 23 February 2016.
[4] “Responsible Sourcing of Seafood – Thailand Action plan 2015-2016.
[5] Clare Leschin-Hoar, “Was Your Seafood Caught With Slave Labor? New Database Helps Retailers Combat Abuse,” WMOT Roots Radio, 1 February 2018.
[6] Brian Alster, “Eradicating Human Trafficking in Today’s Supply Chains,” APICS Thinking Supply Chain, 30 January 2018.
[7] Jennifer McKevitt and Kate Patrick, “Walmart, Disney back anti-slavery technology startup,” Supply Chain Dive, 2 February 2018.
[8] Ibid.