Matthew Chiles: So Helen, what’s the biggest challenge to supply chain transparency, do you think?
Helen Carter: I think for me, one of the biggest challenges is the lack of understanding in organizations about what the investment criteria is. I've spent a lot of time in my career in procurement, talking to procurement professionals and they're driven significantly by operational efficiency and cost savings.
As we've had COVID-19, Russia, Brexit and lots of other challenges that are hitting supply chains, you try and get a supply chain person to think about what's happening with a human rights lens and a modern slavery lens – it feels like a big mountain for them to climb.
Trying to embed it in business as usual within a supply chain management procurement process can be a big challenge. What I’ve found with some organizations that we've worked with, and some colleagues, is that when you start to get into the supply chain and its layers of where the business relationship is not so one-on-one or one-on-many, it's not so connected.
Whose responsibility is it to address these issues? When you find out what's going on in those supply chains, there's a lack of competence, knowledge, ambition, and possibly a lack of investment and resources for that remedy.
When we think about the fact that this week is COP27, for example, the environment world is easier. I don't say it's easy, but it's easier – more scientific, the cost-benefit makes sense, the investment profile makes sense. You get into human rights and modern slavery, and it's just deemed to be fluffy or challenging.
“Transparency is very costly and resource-heavy, without necessarily being able to put the business lens on what the return on investment is. Where brands have a reputational challenge, as we see in the garment industry, they do spend time because it has a massive impact on the brand and its reputation.
However, some of the biggest human rights and modern slavery violations are in areas like extractors – mining, oil, gas, construction – where brand reputation doesn't exist. Actually, the business case for addressing these issues, which is the way businesses speak, is a much more difficult thing to explain.”
I think it's the lack of knowledge, lack of resources and maybe the lack of urgency in some sectors over others.
Matthew Chiles: Ryan, knowledge or lack of knowledge, resources, urgency… What's your perspective?
Ryan Lynch: There are a lot of challenges and Helen spoke to the scale of the issue. If I'm a buyer at the end of the supply chain and I have a thousand suppliers, that's a lot. It's hard to be everywhere all the time. So there's the scale.
There's the lack of direct control. If I've got ten of my own sites, I can make investments. I can hire HR professionals directly. I can make changes to policies and procedures. It's a bit easier than indirectly influencing those thousand suppliers.
I think that cascades into the issue of skills development. Some of the skills here, they're all teachable, but it's challenging to teach and there's a lot of really critical thinking and empathy that's baked in, which is much harder to convey. So the depth of dialogue that's required and the substantive nature of how to engage suppliers, that in itself is hard to scale as well. I think just the nature of the risks are harder to measure. People are really complicated. They're more complicated than machines or materials, which are a lot more predictable. People have good days and bad days, and managing people in general or the dynamic between an employee and their manager is hard to define.
“There's also the nature of forced labor. People aren't in a workplace walking around with a sign saying “I am being forced to work”. The ways that people are exploited are hidden.
In some cases, there are administrative controls that you don't see on the surface: contracts, retention of passports, even the subtle dynamic between an employer and an employee. There's a huge power difference there that people on the outside probably wouldn't recognize, the employer themself might not be conscious of it, but the employee is very, very aware of it.”
So those things could be exploited, and it's not something like greenhouse gasses, for example, that could be measured in the same way.
Helen Carter: I think one of the other challenges that we see is actually cultural in terms of what's acceptable and what's not in different countries. When we were putting the BS 25700 standard together, a simple “should it be called modern slavery” conversation erupted because modern slavery is a very UK-centric, maybe even European-centric standpoint.
A lot of organizations are starting to think about whether it is just forced labor or modern slavery. Is it now human rights?
In some countries, we see huge atrocities happening in supply chains that are either being covered up or organizations are being complicit where certain things are culturally normalized. In employment standards, this is the way it's always been. Some countries have rules around passports that they apply and it's part of the legislation.
So the dynamic here is around how we make real, effective change whilst understanding the cultural dynamics that might be embedded in our supply chain. And that’s really difficult.
So those things could be exploited, and it's not something like greenhouse gasses, for example, that could be measured in the same way.
Helen Carter: I think one of the other challenges that we see is actually cultural in terms of what's acceptable and what's not in different countries. When we were putting the BS 25700 standard together, a simple “should it be called modern slavery” conversation erupted because modern slavery is a very UK-centric, maybe even European-centric standpoint.
A lot of organizations are starting to think about whether it is just forced labor or modern slavery. Is it now human rights?
In some countries, we see huge atrocities happening in supply chains that are either being covered up or organizations are being complicit where certain things are culturally normalized. In employment standards, this is the way it's always been. Some countries have rules around passports that they apply and it's part of the legislation.
So the dynamic here is around how we make real, effective change whilst understanding the cultural dynamics that might be embedded in our supply chain. And that’s really difficult.
“Asking individuals to have empathy about this is not too difficult. Most people, when I do my training, come away horrified about what's happening. But the reality is that as you start to get into countries or regions where they don't recognize the terminology around modern slavery or forced labor, that becomes incredibly difficult to influence.”
Ryan Lynch: Well, I think one of the challenges that Helen's alluding to here, in addition to the scale and the lack of direct control, is around complexity. So if we're dealing with dozens or hundreds of components, materials in a product, and thousands of suppliers, it gets quite complex.
So, now we're outside of the four walls of our direct business and we're in multiple countries around the world. And then when you get into issues related to foreign migrant workers who might be employed at the site – there's one more layer of obfuscation that makes it harder for someone to see behind.
If I'm working with a direct supplier and they're working with a recruiter who's recruited workers from another country, who may have also been recruited by someone in-country, now we've got that many more layers of points in the process where workers can be exposed to risk, exploited, or tricked into workplaces that they just can't get out of.
So again, that's not really on the surface, you really have to dig and be skilled at digging, and in many cases bring in people who can speak multiple languages, and understand the legal regimes behind them.
Helen Carter: To add to that, there are different drivers for why this happens to a certain extent. When we're seeing some supply chains, it's not necessarily criminality, it's forced labor. It's bringing them in, bringing in cheap labor.
If we bring in some of their areas, and particularly why the act was put in place in the UK, you have aspects of criminality involved in all of this. It's linked to trafficking, it's linked to exploitative practices.
And one of the things that we've been learning a lot over the last few years as we've been working with businesses is how smart some of these criminals actually are.
When the Modern Slavery Act first came out, the good check was to check bank accounts. If you've got somebody working on your site, perhaps with the same bank account as four other people working there, today is an indicator. It's something that you can look for very quickly, but criminal enterprises soon realized this is something that’s monitored.
So now each individual person is more likely to have ten bank accounts opened in their own name. As we educate businesses to let them know that these things are happening, they understand how to deal with that systematic piece.
You have to balance these hard measures, which are the systems, the checks and balances with the soft measures, which are talking to people so that you understand the drivers for why this exploitation is happening, so that you can really start to bring something useful and effective in trying to manage this issue.
Matthew Chiles: Up to this point, Ryan and Helen have described some of the industries at most risk to the issue of modern slavery and set out some of the challenges facing organizations in creating supply chain transparency and sustainability. Having considered those, let's move on to look at solutions.
But I suppose if we flip to a more positive perspective, how can we make significant advancements in the eradication of modern slavery? Let’s come to you first, Ryan.