Equipping business with risk assessment tools to combat modern day slavery

Marianne Voss As businesses broaden and strengthen their commitment to operating ethically, creating pathways to better identify and report forced labor risks in today’s supply chains is also necessary. Proactive, business-driven approaches continue to evolve, which is changing how companies identify and report where risk of forced labor is found and how these findings can be properly addressed.

The reality of modern day slavery prevails far beyond certain geographies, industries, and communities. The International Labor Organization (ILO) estimates that 68 percent of victims of forced labor (14.2 million individuals) come from exploitative circumstances in economic activities. Key industries housing this vulnerability and risk include apparel and footwear manufacturing, agriculture, construction, electronics manufacturing, mining, forestry, food processing, and service work.

Clearly, forced labour, human trafficking, and other practices of exploitation are widespread, but they often difficult to identify through traditional audits, despite research that shows how common a risk they are in the supply chain. Research from Sedex has explored how the length and complexity of supply chains prevents the full visibility or influence needed by companies to address far-reaching problems of modern day slavery (Sedex Global & Verité, 2014).

Modern day slavery ought to be a key focus of concern for businesses across the world as they produce the food we consume, clothes we wear, and products we purchase. Driving a culture of transparency around what companies are doing to prevent and eradicate modern day slavery in their supply chains is an integral component of building more aware, human-centered due diligence processes. With this is mind, how can companies across all industries elevate their practices around identifying and rectifying the forced labour risks in their supply chains? How might the private sector, auditors, and consumers committed to ethically created goods put forth a more comprehensive, collaborative obligation to protect the people behind the world’s supply chains?

guidanceIn response to the realities inherent in these questions, Sedex today publishes a new document, Guidance on Operational Practice and Indicators of Forced Labor, to provide new knowledge and resources to businesses in addressing modern day slavery.  This guide aims to build a more steadfast transparency around how businesses identify exposure to forced labour risks.

Audits often document issues that might point to risks of forced labor and supply chain vulnerability, but these audits can lack the actual diversity of indicators and examples that can be flagged and collated specifically to expose forced labor risks. Essential data is often available in building out these indicators, but it is not flagged as forced labor by auditors.  For example, take the following scenario:  a worker’s payment is delayed for several months and the worker risks losing those wages if he/she quits. A worker has a dependency relationship with the employer that goes beyond the job (e.g. dependency on the employer for family member’s employment or dependency for basic accommodation and food needs).

These are raised as a wage issue, or an accommodation issue, or a contract issue. But taken together, can they mean something more?  Forced labour occurs on a spectrum of exploitation. Where does decent work end and labour exploitation begin, and where does labour exploitation end and forced labour begin? In between the extremes, there are a variety of employment relationships in which the element of free choice by the worker begins at least to be mitigated or constrained, and can eventually be cast into doubt. The challenge for auditors is to draw the line between substandard working conditions and extreme forms of exploitation such as forced labour. This is because the majority of cases occupy a middle ground and are hard to fit into a straightforward ‘forced labour – yes/no’ category. Sometimes it is the combination of factors which lead to a forced labour situation.

As issues of forced labor often exist further down the supply chain than might be visible to businesses, this document guides businesses to deepen their approaches to risk assessment and develop more actionable policy in responding to various levels of identified risk. By proposing a list of pragmatic operational indicators of forced labor, the guide can help businesses and social auditors identify indicators either independently or in various combinations. The proposed indicators offer a range of “monitoring measures” or “alert flags” that may be used to help identify actual, likely, or possible situations of forced labor.

Moreover, as an issue that can be so deeply hidden in supply chains, we need to learn how to better respond to and monitor this data. In this guide, Sedex has worked to group “forced labor risk factors” throughout three stages of the employment cycle: (1) Deceptive or Coercive Recruitment; (2) Employment Under Menace of Penalty; and (3) Debt/Wage Entrapment and Termination Prevention.

For each indicator proposed, the ILO’s 11 indicators of forced labor are linked, in addition to its applicable ILO definitional element. Marked by its strength or significance (“definite,” “strong,” or “possible” indicator) and by context (“employer-led exploitation,” intermediary led exploitation,” “hidden third party labor exploitation”), Sedex hopes to guide a deeper understanding behind identifying complex indicators of forced labor.

In utilising the guide, businesses and auditors can use it as a general reference tool to help their understanding of forced labour risks and to enhance their already-existing audit protocols. Broader reporting and recording of forced labour risks can also be facilitated through employee and partnerships engagement, especially while keeping in mind a key purpose of audit reporting: Protecting possible victims and capturing/documenting evidence for follow-up when forced labour is suspected or found.

As business continues to pursue more effective pathways for identifying and mitigating risks in modern day slavery, tools such as the Sedex guide can support a collective mission to bring new transparency, awareness, and education to these evolving standards. A culture of transparency around companies’ actions won’t simply empower companies themselves – this culture can also empower the public and legislation to commit to preventing exploitation and vulnerability in companies’ practices.

Sedex recognises the use of this guide as a starting point for continued learning and innovation as auditors and companies share best practices on risk assessment methodologies they are currently using. While auditing can point towards common indicators and shine a light on already existing forced labour risks, let us remain hopeful of the future tools and solutions we can still craft – collectively – to identify and address issues of modern day slavery.

The guide is freely available now – download it here

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