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Ending Slavery in Global Supply Chains – A Business Responsibility

February 1, 2017
By Anna Whitlam

Private sector supply chains must take responsibility to help solve modern slavery and commit to ensuring human rights are protected - It was only 25 years ago that scandals started to surface with US factories who had moved production to low cost locations and assumed little or no responsibility for worker rights, conditions and health and safety. Things, as we all know, have changed materially for the better.  Under the watchful gaze of activist NGOs, an educated customer base, ESG standards in banks and increasingly focused boards of directors conditions are improving for many but certainly not all. More work has to be done in this space.

There are now more slaves than in any other time in history. Of an estimated 46 million victims of modern-day slavery, seven out of ten are directly related to the private sector, making the products we buy or food harvested, exploited for labour both bonded or forced. As the main gateway through which 70% of forced labour flows, the private sector is in a unique position to turn the tide in the fight against modern-day slavery.

Besides having a moral obligation to address this issue, businesses should also be aware of the real economic and business benefits that spotlighting the issue of forced labour can produce. Besides helping organisations avoid legal and regulatory implications, investors and the public are increasingly questioning a company’s anti-trafficking policies, giving businesses that react quickly an opportunity to strengthen their brand as a leader in human rights issues.

Furthermore, adopting ethical practices not only helps protect a company’s brand, it can also enhance staff morale and operational effectiveness. Companies who have taken an active approach in restructuring their supply chain have often been surprised that, in the process of uncovering forced labour, they also discover more efficient ways to operate their businesses.

Banks also are mobilising their compliance and monitoring capabilities to identity clients that are inadvertently exposed or are deliberately looking the the other way on key human rights abuses. Banks are motivated to focus on this because every single dollar of the USD150billion proceeds of the human trafficking and modern slavery business is defined as laundered money and is a crime. The UK government passed the Modern Slavery Act in 2015 (Appendix 5) which is having far reaching consequences on any company wishing to trade with or participate in the supply chain of any UK company.

Note: Anna Whitlam will be hosting a human rights workshop in Hong Kong in mid-March 2017. Human rights advocate Matthew Friedman, CEO of The Mekong Club will speak to members of the corporate affairs and communication sector on the egregious issue of modern slavery and human rights abuses occurring in the modern supply chain and urging that companies and financiers take this issue seriously and consider their role in addressing this increasingly prevalent problem. The Mekong Club is one of the first not-for-profit organizations of its kind in Asia to use a ‘business-to-business’ approach to fight slavery. Bridging the gap between the public and private sectors, the Mekong Club, from its base in Hong Kong, helps companies of all sizes to understand the complexities of human trafficking and to reduce their vulnerability within their supply chains (www.themekongclub.org).

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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