When a company decides to address the risks that lurk within its supply chain, the most natural thing to want is visibility into Tier 1 suppliers. They’re the ones from which original equipment manufacturers buy directly, where relationships already exist, and contracts are in place.
Unfortunately, risks such as modern slavery and human trafficking are often more prevalent at Tier 2 and beyond — especially when supply chains stretch long distances across the globe.
Hope for Justice, a global non-profit organization, defines modern slavery as “the condition of being forced by threats, violence or coercion to work for little or no pay, and of having no power to control what work you do or where you do it. It includes sexual exploitation, labor exploitation, domestic servitude, criminal exploitation and organ harvesting.”
As deplorable and unethical as these practices are, they’re carried out worldwide and in many different supply chains. All procurement and supply chain professionals have an opportunity and responsibility to fight back now.
Companies that partner with their Tier 2 suppliers (their immediate suppliers’ suppliers) and beyond have a much better chance of identifying human rights abuses in their supply chains and bringing them to an end. Following are three approaches that will help achieve this level of visibility.
Map your supply network. Know with whom you’re partnering. Companies that lack visibility beyond the first tier of the supply chain can’t possibly know whether human trafficking is taking place or not. This information can sometimes be gathered using third-party sources, but the fastest way to obtain it is by asking first-tier suppliers whom they buy from. This also serves as a way to learn how much control those suppliers have over their own supply chains. If they’re unable to identify their direct suppliers, they’re likely not a good partner for managing deeper supply chain risk. The risks tolerated by a company’s suppliers can quickly become their problem as well, and it’s reasonable to expect that supply partners take the same rigorous approach to managing their supply chains as they do.
Develop relationships. Having achieved visibility into second-tier suppliers, companies next must figure out where the greatest risks lurk. Human trafficking and modern slavery aren’t just problems in faraway lands; this is truly a global problem. The International Labour Organization estimates that there are between 20 million and 40 million people in modern slavery today. “Assessing the full scope of human trafficking is difficult because so many cases go undetected, something the United Nations refers to as ‘the hidden figure of crime,’” ILO says.
Human trafficking can arise in multiple situations, including:
Monitor and report. The fight against human trafficking and modern slavery isn’t a “one-and-done” activity. Companies must constantly reassess and confirm that these practices aren’t being financed through their contractual relationships, even deep into the supply chain. Fortunately, most already have compliance and governance programs in place to provide oversight of other issues, and human trafficking will benefit from these investments. By specifically calling out and tracking human rights issues in supply chain monitoring and risk-management efforts, companies can keep the pressure on their suppliers and act quickly once risks and concerns have been identified.
"So often it’s easy to do nothing,” Hope for Justice chief executive officer Tim Nelson said in a recent interview. “Conversations between companies and their suppliers are often focused on things like price and quality…. You need to go way beyond that [to] the individuals who are involved in this, so that you can help to create a fortress within your supply chain against modern-day slavery and human trafficking."
It might be easy to do nothing, but that doesn’t make it an acceptable choice. Procurement and supply chain professionals have an opportunity to stand up and say no, and back up that assertion with transparency and accountability. The choice is ours, and the time to act is now.
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