Archive Blog Detail

Human Trafficking & the Hidden Effects of Conflict

As devastation in the Ukraine prompts governments to quickly enact sanctions and companies to pull operations and services from Russia entirely, we see a looming crisis caused by the forced displacement of millions of people that equally must not go ignored by the public and private sectors. This crisis is not new, it is something that is a continual threat in so many locations around the world. This being the human trafficking and forced labour risk that comes with war, which can lead to the start of decades of abuse and exploitation of the refugees and their families.

The linkages between trafficking in persons and conflict are well-researched. During an armed conflict, many elements that increase individual and group vulnerability to trafficking – such as lack of economic opportunities, discrimination and gender-based violence – are exacerbated. Moreover, as a result of forced displacements, community and family support networks are weakened or destroyed, which increases individual vulnerability.

“Almost one percent of the world’s population, some 82.4 million people, have been forced to flee war, violence, conflict or persecution, and find safety either abroad or within their own countries,” said Tomoya Obokata, UN Special Rapporteur on contemporary forms of slavery. “These refugees, asylum-seekers and internally displaced people are especially vulnerable to contemporary forms of slavery because they often face poverty, discrimination, unemployment, job insecurity and limited access to basic services in their new communities”.[1]

Photo by Levi Meir Clancy on Unsplash

As the conflict in Ukraine unfolds, we have already seen the forced displacement of approximately 1.5 million people so far into neighbouring countries.

So how can companies and governments act in order to protect the displaced from exploitation?

The focus of national governments, local NGOs, international organisations, aid agencies, the EU and others must be to ameliorate people’s vulnerabilities, giving them alternatives that are not merely the ‘lesser of the evils’, and providing them with what they need in order to establish their lives in their new location.

If basic needs such as housing and food are able to be met, people will be less desperate and less likely to accept risky offers. Collaboration between states and organisations will be crucial to allow this to happen. Opportunities for income generation for adults will reduce the incidence of low-level trafficking. To make sure that vulnerable children, women and men do not fall through the gaps in our aid structures, international and national actors should always take into account that a refugee or internally displaced person may also be a victim of human trafficking.

The private sector has an crucial part to play in the struggle against trafficking in persons, and companies can act now to play a fundamental role in supporting displaced people that may seek work in their supply chains.

Companies must update their assessments taking into account new forced labour risk in the destination countries for refugees coming from conflict zones. They should consider whether their policies reflect the needs and circumstances of migrant workers who may be refugees. This involves working with their suppliers in a collaborative way to ensure that migrant workers are recruited fairly and ethically. This continual gathering and sharing of new knowledge around human trafficking global issues should be a regular part of any company procedure.

Companies may consider special trainings for suppliers, labour agencies and internal teams to account for the new risks and challenges faced. It is important ensure that refugees and migrant workers are not discriminated against, as such discrimination and exclusion could lead to an even higher risk of human trafficking of these populations. Educating teams is crucial to avoid discriminatory practices.

Companies and suppliers should consider whether their worker trainings and awareness programmes, grievance mechanisms and other key labour services for their workforce are adequately available in the languages spoken by the refugees and migrant worker populations. They should also consider whether their social audit processes account for the circumstances and language requirements needed to ensure that refugee populations’ are taken into account.

Finally, companies should also consider how they can engage with their peers and share knowledge and resources on the topic of modern slavery and keep abreast of emerging issues. This can be done through engaging with groups like the Mekong Club, participating in working groups and actively seeking dialogue with the wider industry on this topic.

[1] https://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=27484&LangID=E

Author – Phoebe Ewen

Archive Blog Detail

What Does an Effective Grievance Mechanism Look Like?

This blog post was guest-written in collaboration with Labor Solutions.

At the Mekong Club, we carry out regular anonymous surveys of private sector professionals working within retail and manufacturing industries. One of the key questions we ask is ‘Are workers within the supply chain of your company able to easily report concerns about their employment conditions, in their own language?’.

In other words, are workers able to easily access appropriate grievance mechanisms?

Less than 50% of the respondents surveyed in 2021 answered ‘Yes.’ But over 70% of respondents claim to have a modern slavery policy in place; which by definition should include grievance mechanisms. Lack of access to worker grievance is a glaring example of policy not being supported by tangible action on the ground.

Consumers, investors and shareholders are now expecting companies to support social sustainability policies with action. A grievance mechanism can help, and is understood as a formal complaint process that workers can use when a business’ activities negatively impact them. Grievance reporting enables companies to validate and monitor the policies they construct. Companies with high engagement levels make two and a half times more in revenue than their competitors with low engagement levels. Yet, worldwide, only 13% of employees are engaged.

Increasingly, grievance mechanisms are being required under mandatory human rights due diligence laws (mHRDD) across in the EU, Canada and the US. The German Supply Chain Due Diligence Act notably mandates all companies with more than 3,000 employees that are either based in Germany or German branches of foreign companies must have a grievance mechanism in place by January 1st, 2023. Grievance is a rare area of the anti-slavery strategy that is measurable and works to scale if done correctly, generating clear ESG-friendly data points and case studies; gold-dust in the murky world of sustainability reporting.

Scrutiny should be applied to those who claim they have no grievances, as grievances can be found even in the most respectful workplaces. While no grievances may look great, it often means that the feedback collection systems are faulty or workers are fearful of reporting grievances.

Both the correct worker feedback collection system and the right response process are essential to deliver returns and impact worker engagement. Effective worker voice systems are composed of an ongoing cycle of decisions and actions that all impact one another.

We asked our grievance partner Labor Solutions to define “effective grievance mechanisms” and got a breakdown of what success looks like in practice for all actors involved:

FROM THE WORKER’S PERSPECTIVE

ANONYMOUS: Our team works with often factories and hears management sing praises about their worker feedback system:

“Our workers come into our offices and tell us how they feel every day. We address their issues on the spot. We have a great relationship with them.”

This alone is not an effective worker feedback system. While it open dialogue with employees is great for an open door policy, when workers are unable to log their grievances, some will not come forward and serious issues may not be addressed.

KNOWN: Workers need to know about the system. It needs to be promoted consistently and openly. It should be discussed as part of the onboarding process, announced during team meetings, and posted in public places. If workers don’t know about the system, they won’t use it.

ACCESSIBLE: Whatever system you choose needs to be accessible to your workforce. If workers don’t have email addresses or mobile phone access, an email or mobile phone system would obviously be inaccessible.

FROM THE EMPLOYER’S PERSPECTIVE

CONFIDENTIAL: Employers are more likely to seek worker feedback if they know the feedback is confidential and not shared with unions, their clients, or others. We have seen that many third-party helplines have low utilization, often around 2%, while those that are run by employers directly are much higher, around 25%. This also means that small misunderstandings can be kept from ballooning into huge complaints because management can address worker concerns quickly and directly.

TWO-WAY COMMUNICATION: If an employer has no way to follow up with a worker on a complaint or question, it is unlikely that they will be able to find an effective solution. For example, if a worker drops a message in a grievance box that says, “My manager hit me,” there are a lot of additional questions that need to be asked—like “who is your manager?”, or “when did the incident occur?” If the employer isn’t able to have a two-way, anonymous conversation with the worker, they won’t get the information they need to make change. In addition, if they do solve the problem, they aren’t able to let the worker know how it was solved, leaving workers feeling like their questions went unanswered.

EASILY AGGREGATED DATA: A system which collects data, aggregates and organizes it, allows top management to identify and follow trends and decide when executive action is needed. It also helps with investigations. If the same problem is being reported consistently, it helps investigators uncover the root of problems faster.

INVESTIGATION AND RESPONSE PROCESS

EFFICIENT: Efficiency is key to ensuring that a concern is properly addressed, and that both parties stay engaged and committed to resolving the issue at hand. Efficiency in responses is characterized by its directness, timeliness, and clarity. Even if you don’t have a resolution to the issue, or think the feedback is impractical, it is still important to respond directly, emphatically, and promptly. Across all of our clients at Labor Solutions, we see a direct correlation between the speed of response and the utilization rate—the faster the employer works to respond to the worker, the more likely the worker will use the system. A message like this is fine to start: “Thank you, we are investigating and will get back to you as soon as possible.”

EXPLAINED: An efficient solution is great, but is lacking if only one party understands it. Management needs to make clear what the proposed resolution, or at least response, is and what it will look like for the worker. If management does not plan to resolve the issue, there should be a response explaining why. This ensures that at the least the worker feels heard and will hopefully continue to use the feedback system.

PROMPTS ACTION: A quality resolution is only as good as the action it prompts. Feedback systems that create win-win outcomes are dependent upon the resolution being meaningfully and continuously carried out throughout the workplace. This allows a worker to see that their feedback spurred change, causing them to feel increased engagement and can consequently increase their productivity. It is important to consider if feedback should prompt review of internal procedures and processes in addition to reviewing the specific issue at hand. For example, if a worker is reporting abuse, in addition to addressing the specific claim, it is also important to determine if the abuse is just a singular event, or if it is systematic and widespread, indicating a need for procedures to be altered to prevent similar events in the future.

For a response process to be effective, it is important that the facility is not scared of punitive actions for issues brought to its attention. The facility needs to feel safe admitting there is a problem and asking for support from surrounding resources to solve that problem. Leadership and management should encourage open dialogue and improvement activities. Typically, punitive actions should take place only if the facility does not work to address issues brought to its attention.

Technology can be at the core of any good grievance system identifying cases of modern slavery, forced labor, and sexual and gender based violence and harassment (SGBVH), but it cannot act alone. With a healthy amount of scrutiny towards a lack of grievances and a proper system in place to address and respond to worker feedback, worker trust will naturally grow stronger. Ensuring that the feedback system in your workplace has the above attributes will create a space that allows management and workers to maintain that trust; therefore, fostering a safe and healthy workplace environment that promotes both wellness and productivity.

Authors: Elena Fanjul-Debnam, Sophie Zinser ,Phoebe Ewen

Archive Blog Detail

7 Prisoners: The Movie

Now and then a good movie comes along that really provides an insight into a particular social issue or topic. A few examples of this include: Platoon, which for me depicted the true horror of the Vietnam War; Blood Diamond, which showed how the diamond trade was dominated by criminals and traffickers; and the Killing Fields, which profiled the Khmer Rouge regime in Cambodia, based on the experiences of two journalists.

One movie that does an amazing job of portraying the issue of forced labour and how it unfolds in a typical situation is “7 Prisoners” (2021). This story, which is based in Brazil, offers the audience an accurate portrayal of a typical forced labour situation in which the victims are identified, recruited, broken in, and forced to comply. What I really appreciated about the movie was that it walked the audience through the gradual process of grooming victims in a way that helped the viewers to understand the nuances and subtleties.

When I do a typical presentation on the topic of forced labour and supply chains, I talk about the range of issues addressed by the United Nations and the International Labour Organization, including: debt bondage, deception, threats, document retention, violence, confinement, forced overtime, lost freedom of movement, and more. As this story unfolded, all of these elements were introduced in a way that was natural and organic. The way the storyline played out, a light was shined on the trafficking process that offered true clarity. For many, this film will fill in the gaps that we have in our mind related to the human trafficking process and how it unfolds.

Another aspect of the film that I found interesting and relevant was how the story avoided creating a black and white depiction of good and evil. The back stories related to the traffickers offered a glimpse into how they came to take on these roles. One of the victims is also shown going through this process as he transitions from a victim to part of the established trafficking hierarchy. This is a familiar outcome in many trafficking stories.

For me, this form of education-entertainment is a great way to increase awareness. A good movie allows us to take abstract ideas and relate them to our understanding of real life. This makes the content and the message simple to understand. If told well, a dramatic movie can achieve several goals simultaneously, as the following list shows:

• A Natural Form of Communication: Depicting a social issue in a movie is an effective way to motivate, teach and advocate. We all enjoy stories and can relate to this form of communication.
• Common Experiences: Because many of us share similar life experiences, as a movie plot unfolds, there is often instant recognition. We understand what is being portrayed because we have experienced similar things ourselves.
• Chronology: Movie scripts offer chronological details to help the viewer understand and remember a series of events, steps or actions leading up to a specific outcome.
• Expectations: As human beings, we are naturally curious. When a story is being told, we want to know what the outcome will be. We wonder, “Where is this story going? How will it end? What happens next?” Our sense of expectation keeps us watching. Few other forms of communication instill this “need to know” anticipation.
• Emotional Response: A good movie allows us to relate emotionally to what is being shown and can evoke any number of different emotions. Injustice can make us angry. We can be inspired when someone does something extraordinary. We can laugh out loud at absurd situations. Simply put, we are drawn to stories because they trigger our emotions.
• Learning from Others: Through storytelling we can learn a great deal from the experiences of others. If a story describes how a person got themselves into a bad situation, it can be used as a warning to stop people making the same mistake.
• Validating and Comparing our Values: Stories allow us to relate to common opinions and feelings. If the outcome of a story is inconsistent with our views, it challenges us to reconsider those views.

While the characters presented in “7 Prisoners” were fictional, an attempt was made to provide a “generalized scenario” that depicted the real-life experience that so many men and boys were forced to endure as victims of this modern-day slave trade. I feel that this film will allow viewers to understand the problem from not only an intellectual level, but also from an emotional one. Consider checking it out. It is worth the ride.

Author: Matthew Friedman

Archive Blog Detail

The Relationship Between Global Warming and Modern Slavery

Climate change is real, despite resistance from many to accept this fact. For this very reason, many environmentalists have little hope that summits like the recent COP26 summit in Glasgow, Scotland will yield any concrete solutions. In India, the section of society that is most affected by the effects of climate change, are the farmers. Kheyti is an organization in India that has developed “greenhouse-in-a-box” – an affordable, modular greenhouse bundled with full stack services that uses 90% less water, grows 7 times more food and gives farmers a steady dependable income. According to Kheyti, India has 120 million farmers, and even more people who are dependent on agriculture and farming for a livelihood. Agriculture is affected by rising temperatures that cause drought and water scarcity, and unseasonal rains and cyclones that cause floods, cloudbursts, landslides and severe crop damage. In 2021, Union Minister of Agriculture and Farmers’ Welfare reports over 5 million hectares of agricultural area was affected due to heavy rains this year. Not only are crops destroyed, but rising temperatures make them more vulnerable to disease and pests.

India is largely dependent on the monsoons for its annual rainfall. But the monsoons have been unpredictable in the last few years. This year saw the late withdrawal of the southwest monsoon and the improper formation of the northeast monsoon, resulting in unpredictable weather systems and unseasonal heavy rainfall and floods in certain parts of the country, resulting in major crop damage. When their crops fail, farmers become hopeless and desperate, and some choose to move away from farming and explore alternate sources of income, often migrating from rural to urban areas and cities for work. They become easy targets for human trafficking and forced labour due to their vulnerability and limited skills, having lived and worked mostly in the agricultural regions. Mass migrations result in broken families, very often mothers who move to cities for work must leave their children with grandparents or other relatives in their villages and hometowns. Men and women who come to the cities seeking jobs are often misled by unscrupulous agents and forced into hard labour, with little or no income to send to their families back home. Some are forced into the sex work industry or become bonded labourers, losing their freedom and sense of dignity, with no one to turn to for help. Women who move from rural areas to the cities to work as housemaids are often not allowed to return to their villages for years, until their employers grant them a leave of absence. They often work under appalling conditions and are only fed one meal a day.

According to the World Migration Report 2022, published every second year by the International Organization for Migration (IOM) of the UN, more people are being displaced by disasters — caused by the changing climate — than conflicts, reversing a historical trend. The numbers remained high despite travel restrictions due to Covid 19 outbreaks. DownToEarth reports that most of the new displacement is due to climate related events: displacements due to storms – 14.6 million; displacements due to floods – 14.1 million; displacements due to extreme temperatures – 46,000; displacements due to droughts – 32,000, in 2020.

The numbers are alarming, and there is an immediate need for world leaders to address the issue of climate induced migration, to curb modern slavery and protect these vulnerable sections of society from further harm. It is truly a humanitarian crisis when people affected by climate change and natural disasters are rendered homeless and forced to migrate for survival, only to find they are exploited in locations they sought refuge. At the 26th Conference of Parties (CoP26) to the United Nations Framework Convention on Climate Change (UNFCCC), it was acknowledged that “climate change has already caused and will increasingly cause loss and damage”. What are developed and developing nations doing about it, remains a question. A recent report by the Global Compact on Refugees (GCR), showed that the international community has not yet succeeded in implementing the principles of the UN Global Compact to the extent needed. David Miliband, International Rescue Committee (IRC) President and CEO summed up the issue:

“The report findings confirm that refugee assistance and global resettlement targets are woefully insufficient, neither addressing the unprecedented level of protection needs, nor demonstrating solidarity with the countries that host the vast majority of the world’s refugees. As a priority, governments should increase their funding for refugees and set bold, ambitious resettlement targets for 2022 to provide a lifeline to some of the world’s most vulnerable people.”

The only long-term solution is to combat climate change in order to avoid degradation of the land and mass displacement of affected populations. Unfortunately, climate change denial continues, often by parties who have a vested interest in the economies that contribute to climate change. There is an avoidance of acceptance of climate change during a time where only hope for humanity is to make everyone, without exception, a part of the effort to save our environment. It is a change in mindset, and a change in lifestyle. There is enough evidence to show that climate change is one of the major reasons for mass migration. It doesn’t seem farfetched that people affected by climate change would choose to migrate to a different state or city. In the most extreme of circumstances, researchers are contemplating the idea of humans inhabiting the moon or other planets when the earth becomes uninhabitable.

Migrants are most vulnerable to modern slavery and human trafficking, given their socio-economic conditions, and the loss of their livelihood and homes, and the most at-risk of climate change impacts. The question that society needs to ask itself, is what can be done before it is too late?

Author: Annabel Bantleman

Archive Blog Detail

Be The Hero: The Importance of Volunteerism

Our world faces significant troubles. Our atmosphere is heating up at an alarming rate. Our polar ice is melting. Some of our most beloved species are near extinction. People are enslaved in nearly every country in the world. More than half the world lives in dire poverty. Wars rage in more than ten countries. Millions still die from starvation, preventable diseases and so much more. We must take stock of the fact that these problems are not going away. And in many cases, they are actually getting worse.

When faced with this list of troubling issues, many will say to themselves: “Why do I have to listen to such things? It’s so sad and depressing. Why can’t we let the people who are supposed to fix these terrible problems just do their job? What does this have to do with me?”

As a humanitarian professional who has lived and worked in over 40 countries around the world, I have come to realize that if those of us who work on these issues could solve them, we would. But the fundamental truth is that we simply can’t. They go well beyond what a few thousand people around the world can fix. These crises require an army of united people – people who care.

And let’s face it, these problems belong to each and every one of us. What is the justification for this statement? When we are born into this world, we share our human experience with 7.6 billion other people. We share the air, the water, the resources, the animals, the plants, the food, the places and so much more. Every one of us benefits from what this world has to offer. But too many of us take this for granted – almost as a privilege or an entitlement. This is not right.

To respond to this situation, we need a way to engage, inspire and motivate ordinary people to accept some responsibility for this world and to do something – anything. How will we do this? We need a series of tools to make a compelling case for their voluntary involvement, including: public speeches, books and articles that inform and inspire, volunteer support programs and more. This approach will create a vast army of committed volunteers who will form a community of initiators, facilitators, motivators and responders.

I consider everyone who volunteers, no matter how big or small the gesture, to be heroic. There is heroism within each and every one of us. It is a voice of good, of righteousness, of action and of love. In today’s world, this voice too often lies dormant and receives very little nurturing. This heroic part of us can rise up and face the problems of the world head-on.

For the past thirty-five years, I have given countless presentations to help motivate people to step up and become involved in our world and its problems. While my own personal issue happens to be addressing human trafficking, my message to others is simple: find a cause that resonates with you and join the fight. Understanding which issue is closest to our heart is an essential first step. Maybe a person wants to fight global warming, address injustice, reduce poverty or stop bullying. From experience, we all know that we tend to be more motivated and committed to work on things that are more important to us.

What prevents most of us from getting involved? There are two factors. First, many people feel doubt. I often hear people ask: “What could I possibly do to help? I am just one person. What difference could I make?” If only one person were to step up, then I’d agree that probably not much could be expected. But if 10 million people stepped up and offered their small, compassionate gestures, imagine the impact. Success in this area is a numbers game. Second, there are few mechanisms in place to help a person down the path to acting.

As a set of core values related to volunteerism, I believe that collective actions have the greatest chance of impact – and that an army of ordinary people working together can change the world. I believe that for change to happen, we need to unite different types of people – all sharing their unique experience and skills together. I believe in collaboration because I know that we are stronger when we work together as a community rather than passing the buck to a handful of paid professionals. I feel inspired to act because I know this work is urgent—and that it affects us all in one way, shape or form. Finally, I believe in harnessing people-power, because I know that it is individual decisions that have the greatest impact on helping to heal our world.

Yes, our world is in trouble, but we don’t have to passively accept this reality. Our world has the capacity to heal more people, feed more people, educate more people, resolve international and community issues, and help others when a disaster or conflict arises. When society accepts this challenge to address our issues and problems, incredible solutions often follow.

The Mekong Club offers a talk related to the importance of volunteerism entitled “Be the Hero: Be the Change.” This talk reminds us that we can all be the everyday heroes offering this hope. From the first story, this presentation moves an audience’s heart by offering compelling anecdotes related to the fight against human trafficking and other social issues, it offers practical wisdom and rich lessons, and outlines a path forward for voluntary action. Through this process, the training compels each of us to examine our own potential and purpose in life by looking at how our lives could serve others. The presentation inspires corporate teams to begin their personal journey of contribution to the greater good through many practical examples of heroic actions that anyone can undertake.

If you’d like to get involved and volunteer with us, please fill out our volunteer application form.

Author – Matthew Friedman

Archive Blog Detail

Migration Matters: Climate Change & Modern Slavery

When evaluating modern slavery and ESG, we tend to see articles and media focusing on modern slavery as part of the ‘Social’ element and Climate Change as strictly ‘Environmental’. However, when we take a moment to consider the causes and consequences of modern slavery and the challenges facing sustainability in supply chains, this picture becomes much more complex. This blog examines the relationship between modern slavery and climate change and challenges this view of the two as separate issues for categorisation.

First ,we must consider modern slavery trends and the drivers of modern slavery, one of which being migration. People migrate for many reasons, to find work, be closer to family members, and explore new places. In many cases, migration can offer world of new opportunities and prosperity. However, for many migrant workers, particularly those seeking low-paying work in global supply chains, the migration journey is marred with risk of exploitation and abuse. Modern slavery trends indicate that traffickers prey on migrant workers, from unscrupulous recruitment agencies forcing workers into debt to secure roles, to criminals luring migrants with false job opportunities before forcing them into dangerous or illegal situations. Migration is a key focus area for modern slavery policymakers, NGOs, governments, and companies seeking to better protect workers. Understanding the drivers of migration when promoting sustainability in supply chains is therefore important to see where modern slavery risk may lie.

Climate change can cause displacement of people in many ways. Some displacement may be because of a particular event known as a ‘climate shock’, this may be a sudden natural disaster that hits a community and causes an immediate surge of migrants fleeing to safety in nearby places. Examples of climate shocks may include tsunamis, major floods, or hurricanes that are fueled by underlying climate issues. Less immediately recognizable as drivers of migration may be slow-onset climate events. These long-term deteriorations in weather conditions may include rising sea levels leading to community displacements over time or erratic rainfalls leading to unpredictable harvests and famine. Furthermore, such slow-onset conditions can lead to conflicts as groups compete for resources in an increasingly unpredictable and unstable environment. The World Bank estimates that, by 2050, the impact of the climate crisis, such as poor crop yields, a lack of water and rising sea levels, will force more than 216 million people across six regions, including sub-Saharan Africa, south Asia and Latin America, from their homes. This migration is set to become a key modern slavery risk area.

Migrants, particularly those migrating in unexpected or desperate circumstances, are vulnerable to abuse and exploitation into modern slavery situations. They may make risky decisions to cross borders to escape their situation, paying traffickers or taking on debts to reach their destination. Modern slavery trends show that traffickers prey on this vulnerability, deceiving victims into forced labour situations and bringing the under their control through force, fraud, and coercion. There is also risk when people migrate from rural to urban environments, into places and industries that they are unfamiliar with.

One woman, who migrated to Accra from northern Ghana, used to farm until the land was ruined by flooding and she was forced to move. For seven years she has worked as a porter (kayayie), carrying items on her head. She said:

“Working as a kayayie has not been easy for me. When I came here, I did not know anything about the work. I was told that the woman providing our pans will also feed us and give us accommodation. However, all my earnings go to her and only sometimes will she give me a small part of the money I’ve earned.”

The relationship between climate-induced migration and modern slavery is just one area in which these two global issues are interlinked. Many companies and investors invest significant resources into their ESG and modern slavery reporting and metrics. However, the ‘E’ (Environmental) and ‘S’ (Social) are seen as two separate groups of activity. Climate change and modern slavery are intrinsically linked and evaluating supply chain sustainability must take this into account. As the world changes and evolves, so we expect to see modern slavery trends and the relationship between modern slavery and different ESG factors become more intertwined.

Author – Phoebe Ewen

Archive Blog Detail

Sustainable Safeguarding: Calling for a Respect-Focused Approach to CSR

COVID-19 is testing corporate commitment to social responsibility. While major e-commerce and software companies have turned enormous global profits, making massive donations and supporting COVID-19 relief efforts, mid- and large-sized corporates are facing harsh cost-cutting realities just to keep core business practices afloat. In some cases, this means marginalizing CSR initiatives as companies face a global decline in consumer behaviour. Across the Greater Mekong Region’s sprawling supply chains, some of the hardest hit industries, including the garment and luxury goods sectors, provide employment for hundreds of thousands of supply chain workers. A shift in consumer behaviours leaves remaining consumers increasingly ethically conscious. Corporations must learn to strike a balance between profitability and ethical appeal to a dwindling and increasingly selective consumer base.

To do this, CSR teams are increasingly turning to frontier technologies (AI solutions, expert systems, machine learning), some of which were already being used in corporate CSR efforts. But CSR in general, particularly during the COVID-19 pandemic, demands more than quick fixes. Technological solutions will instead have to intervene along a web of COVID-19 induced financial, psychological, emotional, and personal pressures that are impacting employees at all rungs of the corporate ladder from upper management to supply chain workers. CSR teams are also being faced with mounting evidence that COVID-19 discriminates, in a way that many existing frontier technologies do not adequately acknowledge. Black and ethnic minority individuals are the most likely demographic to contract COVID-19, and comprise the majority of workers across global supply chains.

In short, significant changes in CSR are ahead, with frontier technologies perched at the fore in a) enabling more efficient and (hopefully) ethical business practices and b) supporting an increase in transparency between stakeholders across the global supply chain.

But key questions remain: Which stakeholders are responsible for safeguarding the public health and ethical behaviour of a corporation and its employees? Should frontier technology be integrated into existing systems to better address COVID-19’s changing and variable outcomes? And most critically, how can non-profits, research centres, and public sector stakeholders work better alongside corporates to ensure protection for a corporation’s most vulnerable workers?

Using CSR terminology, corporate safeguarding represents the next phase of the social compliance auditing solutions that we innovate at the United Nations University in Macau and the Mekong Club through our social auditing frontier technology product, Apprise Audit. We work on a data-driven, private, and empathetic modern slavery auditing tool for corporations to streamline social audits. But the recommendations that we make extend beyond the interview support and data analysis that our product offers. The core of our safeguarding approach with Apprise Audit is helping corporates understand the underlying factors that may spark conditions of forced labour across pre-departure, deployment, employment, return / onward migration.

Corporate safeguarding ensures that each company whose businesses or employees directly engage with vulnerable people must protect them from harm through upholding a moral ethics of care. With Apprise Audit, we insist that safeguarding as a concept also understands that conditions making workers vulnerable can change over time. We also point out that labour conditions exist along a spectrum, ranging from exploitative labour on one end to decent work at the other.

The idea of integrating corporate safeguarding’s holistic yet nimble approach into CSR seems easy to endorse yet may be difficult for businesses to implement. But we believe it is more than possible for corporates to allow for bureaucratic flexibility, frontier tech solutions, and empathy for supply chain workers through COVID-19 and beyond.

The approach is simple: Protect. Respect. Remedy. These three words comprise the UN Framework for Business and Human Rights put forth in 2010. According to this framework, states have the responsibility to induce regulatory controls that protect workers and corporations. Both states and corporations bear the responsibility of remedying problems as they arise. And perhaps most importantly, corporates should respect states, regulatory bodies and workers not just because they are obligated to under international human rights law, but because that is a standard of expected conduct — a bare minimum if you will — towards ensuring a corporation’s continued operations. With consumer purchasing decisions becoming increasingly informed by ethical concerns, and as workers bear immense mental and physical health strain, we call for CSR efforts to continue upholding tenants of safeguarding and respect. This is true now during COVID-19 conditions more than ever before.

Frontier technologies will play an increasingly integral role upholding both corporate safeguarding and respect for workers. But they are by no means “silver bullet” solutions. In reality, the complex social problems underlying tech solutions need to be part of a CSR team’s corporate safeguarding strategy. Businesses should therefore strive to use any means necessary, including technology, to protect and respect their workers. They should also work collaboratively across multiple stakeholders to remedy the vast web of interconnected problems these workers face as a result of the COVID-19 pandemic.

Thank you to our guest writers Sophie Zinser & Hannah Thinyane.

Archive Blog Detail

Cryptocurrency & Modern Slavery

Human trafficking, also often referred to as modern slavery, is the act of recruiting, transporting, transferring, harboring, or receiving of persons by means of threat, fraud or use of force or other forms of coercion for the purpose of exploitation.[1] Human trafficking is one of the fastest-growing forms of crime in the world, and an estimated 40.3 million people were victims of modern slavery in 2016.[2] Approximately 24.9 million of those victims were trapped in forced labor, and women and girls were estimated to account for 71% of modern slavery victims.[3] The annual profits generated from modern slavery are approximately $150 billion per year. Financial institutions have been responsible for identifying and reporting modern slavery for some time, but as criminal activity continues to evolve, so should financial institutions’ strategies.

Traffickers exploit traditional banking systems to spend, transfer, and launder their illegal profits. Financial institutions have a role in the fight against modern slavery and human trafficking by identifying and preventing traffickers from laundering the proceeds of their crimes. As banks become better at identifying the proceeds of human trafficking, criminals will find new ways to make it harder for investigators to understand and trace the movement of funds. Financial institutions and law enforcement should enhance their strategies to identify and prevent the laundering of trafficking proceeds.

Recently, criminals involved in human trafficking have turned to cryptocurrency in an attempt to avoid the strict controls of traditional banking systems and exploit dark markets for sex trafficking and child pornography. For example, as discussed below, the pseudo-anonymity of cryptocurrency transactions, particularly through unregulated exchanges or peer-to-peer networks, can facilitate transactions that are unencumbered by Know Your Customer (KYC) controls. Traffickers use cryptocurrencies to purchase advertisements and by sex buyers to purchase premium memberships on review board websites. Some members of the cryptocurrency community are specifically catering to traffickers who post advertisements on Backpage and other sites.

While many crypto exchanges collect significant data from the transactions they generate and are committed to addressing AML and modern slavery concerns as a matter of urgency, certain unique characteristics of cryptocurrency make it attractive to criminals seeking to conceal their identity and cover the trail of their illegal activity. There are tools businesses can leverage to better identify and address cryptocurrency transactions involving trafficking and other financial crimes. Although cryptocurrency is known for its apparent anonymity, in fact, cryptocurrency can more accurately be described as pseudonymous. In most cases, the originating address, destination address, and amount of funds associated with a transaction are permanently and, generally, immutably recorded on the blockchain. There is, however, no personal identifying information, such as an individual’s name, birthdate, or Social Security number associated with the transaction. Despite the lack of personal identifiers, there are methods of ascertaining an address owner’s identity, including analyzing blockchain activity for patterns that may provide insight into a user’s identity, the use of blockchain-tracing tools, or leveraging data obtained by regulated cryptocurrency exchanges that collect customer data in accordance with increasing KYC and AML regulations.

Leveraging information collected by businesses engaged in cryptocurrency through the implementation of enhanced data analysis systems, and the use of artificial intelligence and new technological developments is critical to better understand the scope, geography, and victim population and, in turn, more effectively fight modern slavery. As an example of how these tools can be used to identify and prevent trafficking, in 2019, a South Korean national was arrested for operating the darknet market, Welcome to Video, the largest child sexual exploitation market by volume of content, as a result of the combined action taken by US and foreign law enforcement agencies. Welcome to Video contained more than 250,000 child exploitation videos and boasted over one million downloads of child exploitation videos by users. Welcome to Video offered these videos for sale in exchange for bitcoin. Investigators were able to follow the flow of funds on the blockchain to trace payments of bitcoin to the darknet site and identify wallets associated with the site’s administrator. The investigation led to the arrest of 337 subjects around the world.[4]

In addition to the use of data and technology to combat financial crime, it is critical that cryptocurrency exchanges adopt anti-human trafficking policies and procedures and implement strong AML and modern slavery programs with efficient transaction monitoring and KYC and Customer Due Diligence programs to detect traffickers.

Ari Redbord, head of Legal and Government Affairs at TRM Labs, discussed actions crypto companies can take to combat use of their services for trafficking. He advised that cryptocurrency exchanges should be on the lookout for use of obfuscation techniques such as peeling chains, which are a form of structuring on the blockchain that are indicative of money laundering. If a crypto exchange identifies that a certain wallet address is transacting with darknet markets or other sites that sell child exploitation and other sexually exploitative materials, the exchange should flag that address and work closely with law enforcement. If an address is consistently engaging with an unregulated exchange that facilitates illicit activity, it is a red flag for larger regulated exchanges. Redbord stated that the power and promise of cryptocurrency is that it provides unprecedented visibility on financial flows and allows law enforcement and crypto businesses to track and trace funds used in illicit activity like human trafficking.

Seth Sattler, Bank Secrecy Act officer at DigitalMint, believes that companies operating in the cash-to-crypto space need to work together and share their best practices for detecting and preventing transactions related to human trafficking, noting the impact that a group of influential companies can have when they come together to tackle an issue affecting the industry. In addition, public/private partnerships are crucial because any information law enforcement provides regarding industry trends helps companies implement more effective controls. The Cryptocurrency Compliance Cooperative, based in Chicago, is an example of a partnership where industry experts and law enforcement work together to analyze how bitcoin ATMs are being used for human trafficking-related transactions and to determine what additional controls can be implemented to prevent and report human-trafficking activity.

In summary, next steps for those concerned about the role cryptocurrency plays in human trafficking should include information exchange, increased cooperation, focus on education, and the implementation of artificial intelligence for better data analysis and accurate detection of modern slavery-related transactions. In addition, collaboration between private and public sector is important to create industry awareness and promote better financial crime controls. As criminals attempt to exploit crypto exchanges to circumvent detection, enhanced data analytics and technology, in combination with the implementation of strong AML and anti-human trafficking programs, is crucial to ensure that crypto markets do not become a modern slavery haven.

Guest Author: Balki Aydin

Archive Blog Detail

The Mekong Club’s Modern Slavery Toolkit

In 2013, we established the Mekong Club’s business association. Over the years, we have built deep and trusted relationships with over 60 companies across sectors such as banking, hospitality, garment, food and beverage, toys, and footwear. Our members receive up-to-date information and expert training and consultations on issues pertinent to their industry, and we meet regularly to learn and share best practices to further the fight against modern slavery. One of the most important resources we provide is our modern slavery toolkit.

Our modern slavery toolkit was developed based on the needs identified by our association members. During our quarterly meetings, we debate and discuss what they feel is required to assist them with their modern slavery efforts. This results in recommendations from our members. Suggestions might include the development of relevant training materials, analyses of legal requirements, the creation of a modern slavery audit tool, the planning of methodologies to help a company identify or address risk within their business, or a set of modern slavery guidelines on a range of pertinent subjects. Based on each request made, the Mekong Club builds or creates what is proposed. It is then offered back to our community.

What is included in the Mekong Club’s Modern Slavery Toolkit?

Our website includes a range of different resources. Below is an overview of some of our tools.

• Modern slavery guidelines: Our website provides businesses with the following resources: key performance indicators for business professionals within supply chain companies who have responsibilities related to modern slavery; standardised modern slavery prevention language for ‘Request for Proposal’ documents; a range of resource materials highlighting human rights and business best practices; an overview of living wage approaches and trends; an employment description highlighting opportunities for modern slavery survivors; COVID modern slavery guidelines for a range of business sectors; a modern slavery transparency legislation development guide; a collection of ESG indicators; a list of adverse media terms; and a remediation tool that offers a step-by-step guide on how to address the problem if found.

• Training materials: Our extensive training materials include three standardised introductory films that help the viewer understand how modern slavery impacts different industries. Our e-learning course is comprised of two modules, each offering short videos in multiple languages, infographics, quizzes, and reference sources. This tool was created to offer businesses a flexible yet effective way to learn about modern slavery. We also develop bespoke trainings to accommodate the needs of our community.

• Modern slavery technology-based tools: Our modern slavery toolkit comprises technology-based tools with enormous potential for impact. Each of these tools solves a major problem – from auditors who do not speak the local dialect of factory workers, to under-utilised and disaggregated data, to falsified employment contracts. For example, the Apprise App represents a modern slavery audit tool that combats barriers to auditors effectively carrying out worker interviews, including language barriers, lack of privacy, as well as a lack of consistency in addressing all ILO indicators of forced labour. Workers are able to answer a set of questions on a phone by indicating a yes/no/maybe. The answers are correlated to internationally recognised standards. Another modern slavery audit tool is eMIN. This tool uses blockchain technology to underpin key migrant worker documentation, combatting issues within the recruitment process around document security.

• Legal resources: A range of legal resources are available that focus on an analysis of various topics, including Asia labour laws, transparency in supply chain legislation, child labour laws, and recruitment fees. These tools break down complex anti-slavery legislation into easy-to-access, interactive information. Users can understand the key elements of the legislation, how it impacts their business, and the requirements they need to meet to be compliant.

• Knowledge management: Our Knowledge Hub tool consists of thousands of carefully curated new articles, resources, podcasts and more. Our team select the most relevant and interesting modern slavery news each week, and upload it into our knowledge hub. The user can browse by keywords or narrow their search to country or industry to find the needed resources. There is also a platform that contains real-life examples of companies showing industry leadership in combatting modern slavery.

• Sector-specific tools: For the banking and finance community, the modern slavery toolkit includes our library of typologies that provides an understanding of how modern slavery really happens and industry-specific reports on this topic. Our industry-specific typologies demonstrate the typical journey of a modern slavery victim based on real-life case studies and events. Typologies are coupled with red flags and indicators for businesses to use in their risk assessment and remediation plans. There is also an interactive risk assessment map that combines data from various publicly available sources and allows the user to filter by country or commodity. This map helps with risk assessment by aggregating numerous modern slavery data sources in one place and is updated regularly as the data is refreshed.

How can this Modern Slavery Toolkit support/benefit the private sector?

We are very proud that the Mekong Club has brought years of experience working with companies and their many dedicated employees to provide this full range of practical tools. Our modern slavery toolkit is one of a kind. It addresses a full range of needs and requirements by offering a one-stop shop for companies seeking to include modern slavery guidelines in their strategies. In this regard, this resource helps achieve several important outcomes. First, many of the tools help increase general awareness and understanding of modern slavery. Second, the tools help practitioners gauge where they are in their efforts to set up and maintain a modern slavery strategy. Third, they help companies solve problems related to their business effectively and on time without any impediments. Fourth, they help companies to analyse their risk related to modern slavery to determine any vulnerabilities. Finally, they help to ensure that if risks are identified, they can be addressed in an efficient, effective manner.

To access our range of free Modern Slavery Toolkit, register here.

Author: Matthew Friedman

Archive Blog Detail

How Hospitality Harbours Modern Slavery

When the public imagines slavery, a majority might picture men and women being kept as property through the threat of violence. As undeniably evocative as these images are though, modern slavery is multi-faceted, encompassing many different forms of forced labour. While more ‘traditional’ or ‘chattel’ forms of slavery are still prevalent, these cases are only one aspect of a wider issue. Often the means by which people are enslaved in the modern world are more complex and difficult to detect.

It might surprise some, then, that even workers with an employment contract can fall under the definition of modern slaves. However, through processes such as contract slavery and debt bondage, contracted workers can be considered enslaved. In fact, more than many other businesses, the hospitality industry is vulnerable to these forms of modern slavery. Rather than employ in-house workers, many large hotels and casinos will obtain their security team, cleaners, or dishwashers through third-party organisations, meaning that the details of their employment will often be hidden from the businesses’ executives. Another risk is the fact that hospitality businesses generate an enormous quantity of supply chains in order to meet the demands of consumers. The reality is that unless they have maintained a stringent anti-slave policy, every single one of these supply chains is vulnerable to modern slavery. Following the COVID pandemic, many hospitality business may already be in precarious situations, and the fallout from not maintaining modern slavery compliance could be devastating. Therefore, we urge those with positions of authority in the world of hospitality to take immediate action.

How does Modern Slavery Policy Apply to Workers with Employment Contracts?

Part of the nature of employment contracts is that, as well as ensuring that a number of hours of work are completed, the contract acts as a protection against exploitation. It is an obvious red flag, therefore, when workers have not signed an employment contract. Often the case is that these casual workers have immigrated illegally, and a contract would be no use to them as, even if their employer breaks their terms, they have no way to challenge their employer in court without deportation.

Equally, though, it is crucial that modern slavery policy applies to workers with employment contracts as it does to workers without contracts, as although they often do not experience the same issues that casual workers are subject to, there are a separate set of circumstances that determine their status as modern slaves.

The most directly applicable form of modern slavery to contracted workers, including in the hospitality industry, is contract slavery, which involves the victim being misled into signing an exploitative contract from which they cannot escape. Often when this contract is first signed, it is either not written in the worker’s spoken language, or the worker might be illiterate and sign a contract that is not fully explained to them. Consequently, when they arrive at their place of work, often paying expensive travel fees in order to immigrate, the worker is billed extortionate rates for housing, food, and training. Victims of contract slavery are often promised that they will be able to earn enough to pay for their living essentials within a short amount of time, but the exploitative contract is usually engineered so that victims are unable produce savings due to an artificially inflated cost of living. The threat of violence also means that the worker is unable to leave or look for support.

Any businesses’ modern slavery policy must also reckon with the threat that debt bondage poses for the safety of its employees. Put simply, debt bondage is a way in which workers are forced to work by their employers through perpetuating an endless cycle of debt. Workers are paid advances by their employers in order to pay for necessities such as travel costs or healthcare, which are then ‘worked off’. However, these loans are often weighted so that, due to regular increases in interest, it is impossible to ever pay off the debt. Often practitioners of debt bondage will use false accounting methods and extortionate levels of interest in order to maintain this form of bondage, while the amount that remains to be paid off by the worker will be kept hidden so they remain at the job indefinitely. Although the financial aspect of this form of bondage makes it difficult to detect, employers will frequently also coerce victims of debt bondage through physical or mental abuse.

As a result of relocation and related costs, immigrant or trafficked workers are more vulnerable to both contract slavery and debt bondage. Both these forms of movement involve large payments, either for transportation or travel documents. In the case of contract slavery, this further contributes to immigrant workers’ financial restrictions. Sometimes immigrant workers will take loans out from their employers to pay for travel costs, which can begin the cycle of debt bondage. In the hospitality industry, then, modern slavery policy cannot soley apply to casual workers, but must also encompass workers with exploitative contracts or debt bondage.

Modern Slavery Business Risks in the Hospitality Industry

The ways in which contract slavery and debt bondage lead to modern slavery business risks in the hospitality industry are manifold. While monitoring workers within the interior employment structure of an establishment is more manageable, modern slavery becomes a more tenacious issue when engaging with exterior third parties. As mentioned before, some of the contracted workers most at risk include the business’s security team, cleaners, and dishwashers, but can also include caregivers, gardeners, and even construction workers.

Hiring contracted workers is standard practice for most large hotels and casinos in order to save on recruitment, but the downside of this is that because the establishment has no access to the employment contracts of the workers, it becomes harder to ensure that modern slaves are not integrated into the business. Consequently, it is more difficult to guarantee that workers employed by a third party are given sufficient sick or annual leave when they are employed by a third party. Many contracted workers also happen to be immigrants, who, as explained earlier, are more vulnerable to contract slavery due to language differences, and particularly likely to be in a situation of debt bondage as a result of costs incurred by the immigration process.

Supply chain workers constitute another modern slavery business risk, and are frequently harder to monitor than third party workers. The nature of businesses in the hospitality industry means that, as well as exceptional service, they require a broad variety of products to provide the best possible experience for their customers. From bedding and furniture for rooms, to food and drink for restaurants and bars, the amount of materials required is truly vast. As such, numerous supply chains, reaching across multiple industries, are utilized by almost all hotels. This presents a challenge from a modern slavery perspective as in order to fully eliminate business risk, these supply chains need to be effectively monitored.

Responses to Improve Modern Slavery Compliance

So what can employers do in order to improve modern slavery compliance in their businesses? The first and easiest step is having a clearly stated position on the issue. Consider how a brand’s statement could impact the hospitality industry’s culture, and how it could encourage other businesses to take steps to prevent modern slavery.

One potential response in order to improve the job security of workers and protect them from the consequences of modern slavery is to repurpose contracted workers that might otherwise have been laid off. For the safety of workers and customers, it is also necessary that employees feel safe and able to report any incidents or concerns through grievance mechanisms. There must be a clear escalation policy for workers who might be experiencing issues, and employers must ensure that all workers, including contracted workers, are treated fairly and paid appropriately.

Additional training is also essential for all staff, especially on the nexus between modern slavery and the hospitality industry. The training should be delivered to all managers, as well as offered to subcontractors, and delivered in the spoken languages of the employees. This training should include education for all workers on the risks of taking out loans from their employers, and alternative loan sources, in order to reduce the risk of debt bondage. Following from training, increased due diligence from all levels of staff is also crucial for modern slavery compliance. Some of the markers of modern slavery include workers who lack freedom of movement, work involuntary hours, or who have indicators of substantial debt. Signs of physical abuse, confinement, malnourishment, poor hygiene, fatigue, untreated illness, and unusual behavior are also indicators. Some of the most effective ways to monitor modern slavery include comprehensive audits, surprise inspections, worker interviews, and document inspections. Especially important is maintaining positive working relationships with managers and having regular site visits to ensure modern slavery compliance.

If you’re interested in learning more about modern slavery in the hospitality industry and how to implement effective strategies, we’re here to help. Feel free to contact us for a no-obligation consultation to discuss how we can work together to strengthen your modern slavery responses.

Guest Author: Scott Thomson

Archive Blog Detail

“If They Don’t Like Their Job, Why Don’t They Just Leave?” The Reality of Modern Slavery

When speaking about modern slavery in Asia, we have often been asked:

“If they don’t like their job, why don’t they just leave?”

This question highlights one of the most common misconceptions around modern slavery and forced labour in supply chains, that if the constraints on freedoms cannot be physically seen, then they must not exist.

The truth is these people are not usually being held in place by shackles and chains, they may be free to go home to their families each day after work, they may not be beaten each day by the employer, they may have voluntarily walked into this job or even paid a recruiter for the privilege of working. Why would someone in forced labour in supply chains continue to work for an employer who exploits them or who takes their wages? Why would they not simply leave?

Unfortunately, modern slavery has its own challenges. The answer is debt. Debt is one of the most fundamental global drivers of modern slavery in Asia and around the world today. This hidden prison entraps millions of workers into a form of bonded labour that is oppressive, suffocating, and incredibly challenging to escape.

This debt is often initiated during the recruitment period itself and is perpetuated by the common practice of recruitment fee payments by workers wishing to gain employment in oversaturated industries. Recruitment fees may be charged by recruitment agencies, the brokers that they employ to source workers, or even by the employers themselves. In many countries, this practice is entirely legal, and in some industries, it is so commonplace that workers are mistrustful of job offerings that do not include recruitment fee requirements. Workers victimized into modern slavery often willingly pay these fees, especially for jobs where many others are seeking the same kind of employment. Recruitment fees are particularly prevalent amongst migrant workers seeking low-skilled, low-wage jobs such as in factories, construction, domestic work, or agriculture. As such, forced labour in supply chains persists.

While these fees may be technically legal in many cases, unscrupulous actors may charge excessive fees or hide fees within the process that may lead the workers to take on debt to make the payments. Often, these loans are offered by agencies, employers, or related unregulated money lenders and may have staggeringly high-interest rates. Exploiters prey on the desperation of their victims for work and a lack of financial literacy, as well as deception and lies to bring the person under their financial control, resulting in a modern slavery situation.

Once the workers are indebted, they quickly find themselves working to clear their debts. This can very quickly become a cycle of exploitation where they do not receive the wages that they expected, are charged more hidden fees and costs, and must even take on more debts simply to survive. They are no longer working to thrive and provide for their families. They are working simply to tread water in a rising tide of debt and abuse. They have no choice but to continue. This highly effective method of control is used on millions of workers across a multitude of industries in the world today. In the most extreme cases, this debt can transcend generations as these unregulated debts are passed from parents to children with no end in sight from a modern slavery cycle.

Through our work addressing modern slavery in Asia and around the world, the link between debts and forced labour in supply chains is clear. Addressing how workers fall into debt during the recruitment process will be one of the key pillars if society is to end modern slavery for good.

Author: Phoebe Ewen

Archive Blog Detail

Global Diligence in Supply Chain Sustainability

Due Diligence in Today’s Supply Chain Sustainability

COVID-19 has shifted the way we live our lives, both personally and professionally. This has taken a toll not only on the way we consume but also on how easy it is to forget where our products came from to provide, nurture and protect the ones we love. Implications of COVID-19 have caused many businesses to switch to a ‘sink or swim’ mindset, leaving unskilled and disadvantaged communities to feel the aftermath of pandemic-related disruption.

It’s easy to point fingers at industries and who should do what, but in fact we are all in this together. As business professionals, we have the ability to effect change, whereas millions of people at the bottom of the global value chain can only wonder when they will see their families and if the life they’ve been forced into will ever stop.

It’s our responsibility to shift our sourcing patterns to bring about sustainable supply chain practices, to provide the men, women and children with a life outside the deception that has enabled people like you and me to have the sense of security, as COVID continues to affect those whose voices are not being heard.

The Race to Supply Chain Sustainability

During this economic uncertainty, it is worth highlighting that many companies have stepped up to the plate to take the initiative on their sustainable supply chain practices before legislation has come into effect. Not only have initiatives been taken, but corporations that were one step ahead of the game have significantly reduced their modern slavery business risks, increased stakeholder acceptance, and put an immense amount of pressure on their competitors to follow suit to sustain market shares. With increasing expectation from stakeholders on supply chain sustainability and the need to identify where modern slavery business risks lie, businesses are scrambling to find a solution.

Unfortunately, solutions to supply chain sustainability are not as simple as a checklist, and neither is there a cookie-cutter approach. Each industry has its own set of needs, so they require personalised processes to identify what strategy will work best to eliminate their modern slavery business risks.

For example, company ABC has ten factories spread across three countries. Each country has its own recruitment agencies to source workers from two of the surrounding countries that they operate in. Company ABC publishes its anti-slavery policies and codes of conduct annually, ensures that it complies with local labour laws, carefully selects its supply chain mapping, conducts yearly audits, and ensures a high standard of purchasing practices. Company ABC believes that its internal work and efforts in its sustainable supply chain practices have greatly reduced or eliminated the risk of modern slavery in its business.

However, company ABC has not taken into account the roles and responsibilities of its suppliers and sub-suppliers into consideration. Although company ABC has committed to and worked towards a sustainable supply chain, deficiencies in its suppliers and sub-suppliers’ policies, codes of conduct, complicity with local labour laws, supply chain mapping, audits and training have all been missed as part of the process.

This example demonstrates how preventing modern slavery and eliminating business risks quickly become a challenging and daunting task that requires knowledge and expertise to strive towards a sustainable supply chain.

Steps Towards Supply Chain Sustainability

Both small and medium-sized enterprises and multinationals are often faced with the ‘how’ and ‘what’ should they be doing to manage the business risk of modern slavery. Collaborating with non-profit organisations is a company’s best method to work towards sustainable supply chain practices. Non-profit organisations in the anti-modern slavery space have specialised expertise, resources and tools to work with and identify modern slavery challenges specific to each industry.

Both free and paid resources are widely available to help the private sector to enhance and empower sustainable business practices through supporting companies to navigate the anti-slavery landscape. Although cookie-cutter strategies don’t exist, it’s good to understand how and what can be implemented today to set organisations up for success.

1) Knowledge

Understanding industry best practices is a great first step. There are online search tools that help businesses to dive deeper into industry-specific topics by searching archived news articles, blogs and websites from credible resources to understand the complexities of managing the business risks of modern slavery.

2) Roles and Responsibility Checklists

It’s important to know who and what managerial position within an organisation can play an important role in addressing modern slavery compliances and risks within supply chains. Understanding how decision-makers and employees contribute to preventing modern slavery is an essential part of a company’s modern slavery strategy.

3) Free Online Modern Slavery Toolkits

Workers’ vulnerability, workplace pressures, and health and safety concerns are ongoing challenges that impact business sustainability and profitability in the short, medium and long term. Managing supply chain sustainability has been and will continue to be a challenge; therefore, accessing free toolkits to mitigate and prevent modern slavery is key to managing stakeholder expectations.

4) ESG Modern Slavery Indicators

Indicators that articulate sustainability frameworks with stakeholders, such as ESG indexes, provide measurable and attainable data. Measuring the ‘S’ in ESG has been a cornerstone project that the Mekong Club has been developing for modern slavery indicators.

Implementation of indicators has proven to be an effective way to effect change and has already led to victim identification within supply chains.

5) Industry Benchmarking

Understanding where a business is with its modern slavery strategies against industry benchmarks provides an overview of how much work needs to be done. Supply chain sustainability starts with knowing what business risks are currently present and what metrics are being achieved. With governments and regulators globally clamping down, more companies are required to do everything in their power to present their efforts; otherwise, they risk condemnation and brand reputational damages.

One way to do this is to take a Anti-Slavery Scorecard self-assessment. This confidential tool allows companies to identify how their modern slavery strategies rate on a scale of one to a hundred. The score received acts as a comparative to the average scores within modern slavery supply chain sustainability. The free assessment reviews existing performances on modern slavery initiatives, identifies gaps between current and desired performance, and helps managers implement actions to improve performances.

Identifying and addressing modern slavery is a major obstacle to achieving supply chain sustainability. However, with the right training, tools and collaborations, it is possible to make a positive impact to protect and release the men, women and children who have been forced into working against their will.

Author: Nolan Clack