Ryan Lynch, of BSI, outlines approaches to identifying and mitigating the risk of human trafficking and slavery in supply chains.

Based on a number of recent conversations I’ve had with various corporate social responsibility (CSR) practitioners, many companies are wrestling with how to effectively approach disclosure requirements related to human trafficking and supply chain slavery, including those of the UK Modern Slavery Act 2015 and California Transparency in Supply Chains Act.

The companies generally fall into one of two groups:

The first group is made up of companies with relatively immature supply chain risk management systems, as it relates to identifying and mitigating human rights risks in the supply chain. Often, these companies are in industries that have not been a significant target of NGO/media attention toward supply chain abuses. In some cases, these industries have focused on other risks (such as food safety, quality etc).

In others, their products may require higher-skilled labour, which may decrease the overall risk of employing a more at-risk workforce. In general, this group often consists of companies who may be SMEs to billion-dollar multinational companies, but may not be a recognisable consumer brand, as they may sell primarily through B2B channels.

The second group consists of companies with mature supply chain due diligence practices. They may have a supplier code of conduct, a robust supplier audit program, training, stakeholder engagement etc. Yet even with a large-scale responsible sourcing program, these companies are still often challenged with how to incorporate practices that identify and mitigate the risk of human trafficking and slavery in their supply chains.

For the second group, the challenge stems from the fact that these programs have been designed with an eye towards understanding direct suppliers. This makes sense from a feasibility standpoint, as these are the business partners a buying company knows and over which influence can be exerted. That said, it doesn’t get at the entirety of the risk.

In a similar vein, multinational companies with well-established CSR programs have never really solved the problem of identifying when and where undisclosed subcontractors are being used in the manufacture of their products.

Trafficked labour is analogous, as that particular input – people – are often provided to the manufacturer through a labour broker. Similar to the relationship between a manufacturer and subcontractor, the labour broker isn’t dealing directly with the multinational brand, thus will remain hidden without additional effort made by the brand. That cost-time, resources, variations in a scalable process etc – on top of an already taxing effort to understand a dynamic and complex direct supplier base – is just one more hurdle to clear in establishing systematic ways to identify and mitigate supply chain slavery risks.

For some products of complex composition, each tier beyond the direct supplier holds the potential to splinter into dozens, hundreds or thousands of possibilities.          

Our work related to supply chain slavery has been focused in a few areas:

• Assess controls to identify and mitigate the risk of slavery that a company has in place in relation to geographic risk, materiality, strategic importance, impact, feasibility and relational proximity.
• Guidance on designing and deploying systems to close gaps that are uncovered.
• Development of the BSI Trafficking and Supply Chain Slavery Patterns Index. This is a tool that leverages years of proprietary intelligence and analysis captured in the supply chain risk exposure evaluation network (SCREEN) platform, in order to enable clients to identify and predict migration patterns and their impact on global supply chains. 

What approaches have you taken with your own organisation to tackle the problem?

About the author

Ryan Lynch, BSI’s head of advisory and corporate social responsibility, works with organisations across multiple regions and industries to design creative solutions to drive organisational improvement and to identify, mitigate and remedy supply chain risk.

He has designed CSR/responsible sourcing programmes for multinational brands, and has conducted training and code of conduct audits in factories and farms throughout the US, China, Philippines, India, Pakistan, El Salvador, Honduras, Guatemala and Turkey. Ryan leads BSI’s strategy regarding combating human trafficking and supply chain slavery, including the development of services and information tools to predict and identify this risk within multinational supply chains. Find out more at bsigroup.com, read the blog, and follow on Twitter and LinkedIn.