Seyfarth Synopsis: This is the fourth and last in a series of blogs by our Global Modern Slavery Team dealing with how companies can navigate the changing legal landscape addressing the role of business and its connection to modern slavery.
There are many human rights which are already respected and protected by business in relation to their employees and contractors.
These include, among others: creating a safe working environment that is free of workplace incidents and violence; respecting differences among employees (whether they may be religion, political, color, gender, or sex to name just a few); working reasonable hours and being paid fairly and equally; being able to safely and freely come to and leave work; the right to free association and collective bargaining, and working in a discrimination- and harassment-free environment.
People trapped in the various types of modern slavery work in unsafe environments; they do not have freedom of movement to and from their jobs; reasonable working hours are not observed or understood; they may barely earn a minimum wage, much less a living wage; they must pay for their jobs if recruited; and if they are migrant workers, they may not be allowed to keep their identity papers. They simply do not have a voice and not are not given basic respect or dignity.
Although “modern slavery” is a crime that seems to be happening far away, its connection to business can be surprisingly close to the issues businesses address in their direct operations on a day-to-day basis. Supply or services contracts, agreed in the United States, may link a company directly with human rights abuses at the other end of the agreement. Many companies are starting to see that as an unacceptable risk to reputation as well as inconsistent with their own culture around dignity at work and respect for human rights.
We are seeing many companies starting to develop a dignity at work or even a broader human rights strategy. A human rights strategy is effectively an overlay to many of the strategies and employment practices currently in place except that it is looking at a company’s impact on human rights beyond its group legal entities.
Below are some of the matters business are taking into account in addressing modern slavery as part of the broader human rights framework. Because managing a human rights strategy in business, and particularly modern slavery, is an evolving area, the following is only meant to give a high level view – each step obviously has many facets.
- Commitment to Human Rights. Identifying and expressing a company’s commitment to human rights using international principles and guidelines as the foundation and understanding the practical application of these to the company. These include, the International Bill of Human Rights, which is generally made up of the UN Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the International Covenant on Economic Social and Cultural Rights (the latter two being multilateral treaties that codify the UN Declaration of Human Rights). This commitment may be reduced to a stand-alone human rights policy or embedded into existing policies; noting here that it is important a company understands these instruments before promising to commit to these principles in their day to day business operation.
- Aspirational and Interim Goals. Creating aspirational goals, but taking achievable action towards those goals in digestible steps over a specified time (much like creating a 3 or 5 year incentive plan with company targets that get reduce to goals to be achieved year over year towards those goals)
- Overarching Legal Framework. Understanding the jurisdictional legal frameworks, if any, to which a company may be subject.
- Assess Impacts. Assessing a company’s human rights impacts, both in operations and in supply chains. Assessing impacts will also help a company prioritize and refine its human rights focus and commitments.
- Address Impacts. If any negative human rights impacts are identified, assess how to cease or mitigate those impacts. If it’s with a supplier, cooperation is favored over termination of the relationship because the ultimate goal becomes one of impact. Assess any grievance mechanisms that can be put in place.
- Impact Prevention. Actions here can include developing or modifying codes of conduct, both internal and supplier codes; re-evaluating supplier contractual provisions (or including provisions focused on human rights/modern slavery); re-evaluating any supplier onboarding policies to address capacity building, which can also include industry or cross-sector engagement; working with human rights experts and counsel; and training mechanisms (both internally and with suppliers)
- Due Diligence Process. Developing a human rights due diligence process, which can be started, in part, by evaluating existing due diligence processes to see where and how they can be adapted to address human rights. This evaluation could include looking at supplier audits in place, looking at questionnaires provided to suppliers that focus on slavery and trafficking risks, and evaluating any FCPA auditing and diligence processes currently in place that could be adapted for human rights due diligence. There will need to be considerations as to how to differentiate between tier 1 and further supplier tiers, as well as considering burdens on suppliers and a company’s own resources. Worker voice mechanisms is a growing and recognized element to identifying modern slavery.
- Communication. Consideration will also need to be given as to how to address the company’s impacts and efforts both within the organization and publicly, whether or not a company is subject to a disclosure law.
Naturally, there will be practical challenges along the way. Foremost, these include the time and resources that can be dedicated to a human rights strategy.
- For those businesses wishing to progress a modern slavery or human rights strategy, there are a host of publicly available resources to ground and guide the impact assessment process. These resources include:
- The U.S. Department of Labor Apps called Sweat & Toil and Comply Chain that can be used to help identify goods that are at highest of being sourced with forced or child labor and from which countries along with steps to a social compliance system.
- The US Federal Acquisition Regulations, which provide detailed rules regarding a compliance program and remediation measures (and are useful even if a company is not a government contractor).
- Guidance notes on the Australian and UK Modern Slavery Acts
- There are a number of industry groups and resources that can be tapped along with NGOs, like Know the Chain, that have done research on high risk areas and regions.
- Finally, technology tools are increasing as sources to help detect modern slavery and patterns as well as providing ways to foster worker engagement, as we have previously addressed. The New Transparency: Using Collaboration and Technology to Help Address Modern Slavery
Our view at Seyfarth is that the estimated 46 million people working in conditions of modern slavery makes this one of the issues of our life and times. It is a misconception that these people are entirely associated with certain unsavory trades. Rather, millions of desperate men, women and children work in unacceptable conditions in the supply chains of legitimate business sectors.
Countries are starting to realize this and we believe that legislation in this area will only proliferate, making modern slavery reporting increasingly a condition of market access. In addition, potential employees, investors and consumers are increasingly looking at the ethical culture of companies in making their financial or career decisions.
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