Seyfarth Synopsis: Over 40 million people around the world are trapped in conditions of modern slavery, according to research from the Walk Free Foundation and the International Labour Organization. Modern slavery—a term that encompasses various forms of servitude, forced labor, trafficking in persons, forced marriage, child trafficking, debt bondage, child labor and exploitation, and other slavery-like practices—exists both at home and abroad, across a range of local industries and in global supply chains.
The fight against modern slavery is fragmented. Governments, non-governmental organizations (NGOs) and law enforcement agencies are engaged in their own fights at various levels (local, regional, national) with little collaboration.
Now, in our increasingly globalized markets, there is growing regulatory and consumer pressure on businesses—domestically and internationally—to eliminate the exploitative practices of modern slavery that occur in their operations and/or their global supply chains.
Businesses have the chance to lead the way in the growing global effort to eliminate the exploitative practices of modern slavery; they are uniquely positioned to educate the largest constituency—their employees and business partners. By taking action, businesses can meet increasing investor, shareholder and social expectations; manage legal, reputational, financial and operational risks; and demonstrate corporate leadership on an urgent moral issue.
However, they cannot do it alone and, to be effective, businesses will need to go beyond mere compliance efforts centered on due diligence/disclosure and focus on transparency and collaboration with government and NGOs. Technological advancements are now also providing real and substantial opportunities for improvement.
The Compliance Framework
There is a growing body of international laws and norms requiring corporate reporting and due diligence on modern slavery and human rights issues. These include the UK Modern Slavery Act, the French Corporate Duty of Vigilance Law, the Swiss Responsible Business Initiative, the U.S. Federal Acquisition Regulations, and the California Transparency in Supply Chains Act.
Legislatures in Canada and Hong Kong are also currently considering modern slavery laws. In addition, the Australian State of New South Wales has recently passed its own modern slavery legislation. For any multi-national businesses who have operations in Australia, the Australian Government this month introduced draft Modern Slavery legislation, which is likely to come into effect later in 2018. This sets an imperative for global businesses with operations in Australia to know, and show, how they are identifying and addressing the risks of modern slavery.
The compliance steps for meeting legislative requirements will not be unfamiliar to businesses; the process will involve identifying the suppliers, mapping the supply chain and conducting risk assessments (industry, country, political). These steps will be much like actions taken for compliance with anti-bribery laws.
Using Technology for Greater Transparency
Governments and NGOs are starting to take advantage of technology to spread knowledge and tools for those in the private sector and communities to educate themselves and learn how they can take action.
For example, the U.S. Department of Labor has created two apps—Sweat & Toil and Comply Chain—that each have a different focus. Sweat & Toil is a resource companies can use in their risk assessments to identify whether goods used are produced with child or forced labor. It consolidates information on other countries’ legal and enforcement standards, among other things. Comply Chain creates a standard of set practices to reduce the likelihood of goods being produced with child or forced labor. It provides a blueprint for businesses to create or enhance a social compliance system.
NGOs like Stop the Traffik, a global organization focused on prevention of modern slavery, has created a Center for Intelligence Led Prevention, in partnership with IBM, to collect, analyze and disseminate information about modern slavery routes and risks. With the dissemination of such information, the efforts in this fight can become less fragmented.
Likewise, for businesses to really make a difference as they embark—voluntarily or involuntarily—on responding to a new regulatory scheme, technological advancements will give them an opportunity to support their actions in working towards transparency and ethical supply chains. For example:
- Worker Voices – Utilizing mobile platforms allowing two-way, real-time communication for workers throughout the supply chain;
- Traceability of Materials and Supplies – Using blockchain to trace products along their journey from producer to consumer;
- Supplier and Worker Engagement – Equip and use data analytics to monitor labor-related risks in real-time, creating more responsible global supply chains;
- Risk Assessments – Mining data (for example, from mobile phones, media reports and surveillance cameras) which can be analyzed using artificial intelligence and machine learning to extract meaningful information and identify risks in the supply chain; and
- Employee Engagement – Using internal communications tools to allow employees to engage and become educated, particularly in recruiting.
Technology can only be as good as the purpose for which it is used and how carefully the information acquired from it is leveraged. If effective tools are used to educate and learn from the different actors within the supply chain, there is opportunity for businesses to work with governments and NGOs to build and share knowledge.
With this comes the potential for a new level of transparency and commitment, helping to build on efforts to fight modern slavery and more holistically bring this largely hidden crime to light.
For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Labor & Employment Team.