Suzanne Offerman, senior marketing manager for Onesource Global Trade at Thomson Reuters, describes the technology needed to avoid forced labor in manufacturing supply chains.
Forced labor, to put it bluntly, is modern-day slavery: people are either not paid fairly or are being held against their will. Generally, that means they’re threatened in some way and compelled to work in a factory. And forced labor is one of the biggest risks companies face today, Offerman says.
“I think that when we talk about forced labor, we typically think of China because that's what's been in the news the most, but it actually does happen worldwide,” Offerman says. “I think on virtually every continent there have been forced labor findings for various products in various industries.”
As international law becomes stricter, manufacturers and companies sourcing parts and materials need to be certain they are partnering with suppliers who are compliant with the latest legislation. That can be difficult to ascertain when there are multiple layers of supply. “Who is your supplier’s supplier and their supplier?” Offerman asks.
Once past the first two supplier tiers, supply chains can involve extremely long subcontracts, she says. “That's when it becomes more problematic.” And new legislation presumes that products, parts or materials originating in some regions of the world – such as Xinjiang Province in China — are made from forced labor.
Even older laws can mandate that one’s goods are detained, Offerman says. “It's extremely difficult once you're in that position to get your goods back. Typically, it's high legal fees, loss of goods, reputational risk, et cetera. So, companies have significant risk. They have to be careful of running afoul of the statute.”
The proper global trade compliance software, updated continuously, enables manufacturers and shippers to be on top of the latest legislation and mandates, Offerman says.
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