Slavery can seem like a concept straight from a history book. However, today there are more victims around the world than at any time in recorded history. A recent report from the International Labor Organization (ILO) estimated that more than 40 million people worldwide were victims of modern slavery in 2016. For the first time since records began, the top nationality for victims of modern slavery in the UK is British – so it’s an issue that is very close to home.
Given the scale of the problem, small and medium sized businesses may not feel as close to the fight against slavery as their larger, global counterparts. But slavery can impact almost any supply chain regardless of company size. A recent Dun & Bradstreet report showed that half of UK small businesses said they only have partial information on their supply chain, meaning that they could be supporting slavery somewhere down the line without knowing it.
Fortunately, there are concrete steps small businesses can take to protect their reputation and play an important role in the fight against modern slavery.
Know your business partners
Avoiding forced labour may seem straightforward. However, it’s not as easy as simply checking on the companies you work with. Imagine that as a consumer, you want to boycott companies that employ animal testing when buying cosmetics. You might research particular brands and choose one with an ethical, animal-free policy.
However, you might not realise that the brand is owned by a company that exports its products to countries like China, where animal testing is required by law. Animal testing might not be used in the development of your favourite product, but the parent company might undertake testing before selling their products to another country.
A similar principle applies with human trafficking. Just because your direct business partner doesn’t use forced labour, doesn’t mean that all the companies it works with or buys from are in the clear. To gain full transparency of your supply chain, it’s important to identify all parties who are connected to the companies you do business with; your supplier’s supplier’s supplier could be using forced labour. You can minimise the risk of regulatory non-compliance and reputational damage by ensuring you understand the ownership and structure of a business before you enter any agreements with another business.
Identify high-risk locations
Although slavery is prevalent across both developing and developed countries, there are higher levels of forced labour found in some regions, industries, and a higher risk to cross-border operations. If you import products, materials, or services from other countries, know that it may increase your exposure to unethical working practices in your supply chain. You should tailor your due diligence strategy accordingly; identifying exactly where your supplies come and which industries your suppliers operate within is key to protecting your business.
That’s not to say that every company in certain regions uses forced labour, but regulations and business practices do differ among countries. That’s why it’s important to have full oversight of your operations so you can assess and mitigate risks.
Tools such as the Dun & Bradstreet Human Trafficking Risk Index can provide insight into higher risk areas and predict the likelihood of an organisation having links to slavery. This can help assess the level of risk involved before forging business relationships.
Look to the past to inform the future
Past behaviour can be an important indicator to help build up an accurate picture of suppliers. Looking at whether there has been any previous involvement in illegal or unethical practices doesn’t necessarily mean the company is using forced labour, but it increases the risk involved.
One way to identify risks is to look at a business’ compliance report which includes information on legal action, adverse media, and sanctions relating to the company and its Beneficial Owners. Outside research will also show if the company has been involved in or convicted of human rights violations in the past.
No business sets out to work with unethical partners, but modern slavery is often hidden within a supply chain. Small businesses can form a key part of the fight against human trafficking by taking advantage of the knowledge and resources available to them before entering a new business relationship.
Working to identify and eliminate modern slavery in the supply chain is not only the right thing to do; it also protects your business’s reputation.
Chris Laws is global head of product development for compliance and supply solutions at Dun & Bradstreet.