Hult Survey: 90% of Firms Believe Modern Slavery Is in Supply Chains
Nine in ten businesses believe modern slavery is happening somewhere in their supply chains. The same research finds that 56% of teams handling the issue spend less than 40% of their time on action.
Belief and cases in supply chains
The study comes from Hult International Business School. It says 90% of surveyed businesses believe modern slavery occurs in their supply chains. More than half acknowledge uncovering actual cases in the past three years.
Some 87% of organisations see a high likelihood of modern slavery among Tier 3 suppliers and beyond, the suppliers furthest from the buyer. These tend to be farming operations such as cotton growers for clothing, and the resources to check on suppliers tend to dwindle after the first tier.
According to the ILO, illegal profits from forced labour in the private economy total $236bn a year.
A law that changed the conversation
Businesses credit the UK Modern Slavery Act with some effect. Of those surveyed, 69% say it raised the attention senior leaders give the issue. Almost three-quarters say it pushed their focus toward reporting rather than action.
The time split backs that up. Among teams that handle modern slavery, 56% give action under 40% of their time, and more of it goes to compliance-based reporting.
Professor Matt Gitsham, co-author of the report, called the Act "a genuine world first". Firms across industries, he said, tell the researchers that stronger, clearer rules would help them find and address exploitation. He also called for investors and business customers to scrutinise firms more closely, and for more benchmarking, cross-sector cooperation and training of senior leaders.
The research is published as Parliament is due to consider proposed changes to the act within the Immigration and Asylum Bill.
A second survey points the same way
A report from the standards body BSI, produced with CIPS and published this month, surveyed 800 business leaders in eight countries. It found that 95% of businesses had identified modern slavery violations in the previous 12 months, and eight in ten said they were committed to eliminating it.
Almost three-quarters describe themselves as highly confident that their practices would meet laws still to come. The report warns that compliance could turn into a tick-box exercise that changes little. Harold Pradal, BSI's president of assurance services, said the test is no longer whether firms act but whether they can show that the action improves conditions for vulnerable workers.
Just 39% can show what their modern slavery assessments achieve across the value chain. While 80% believe they hold enough evidence to show their commitments, only 22% have visibility of third-party suppliers. More than a quarter do not require sub-tier disclosure in contracts, and 28% lack the resources to assess beyond Tier 1.
BSI also published a draft of the new ISO 37200 standard at the start of the year. It is meant to give a "consistent, credible, and practical framework" for managing the risk. Where firms did find problems, 53% chose to work with the supplier to fix them rather than end the contract.
Our view
Both surveys describe companies that know the risk is real and still lack sight of the suppliers where it concentrates. The proposed changes to the act in the Immigration and Asylum Bill could show whether tighter rules push effort from reports toward checks on lower tiers. Until then, the gap between the 80% who feel they have evidence and the 22% who can see third-party suppliers is the figure to test.
Source: edie