Key points:
- Comprehensive evidence points to increased vulnerability of workers to forced labour in global supply chains during the pandemic. Already vulnerable groups, such as migrant and informal workers, were most affected.
- The increased vulnerability of workers to forced labour is often linked to long and complex supply chains where businesses have limited visibility.
- The pandemic made it more difficult for businesses to prevent forced labour in their supply chains, but some of the early response likely to have exacerbated vulnerability, for example by cancelling orders.
- However, the pandemic may lead to longer-term positive changes to supply chain dynamics. Businesses can increase supply chains resilience by increasing their visibility and transparency over them, which in turn will help to identify and mitigate risks of forced labour.
- Findings and recommendations have been tailored for UK-based policymakers and businesses.
Comprehensive evidence points to increased vulnerability of workers to forced labour in global supply chains during the Covid-19 pandemic, an analysis published today by the Modern Slavery and Human Rights Policy and Evidence Centre (Modern Slavery PEC) has found.
The Modern Slavery PEC has carried out an analysis of evidence, including new academic research funded by the Centre, on the impact of Covid-19 on modern slavery across the world.
The analysis has found that the pandemic has increased vulnerability to modern slavery all over the world, including in the UK, as many of the underlying wider factors underpinning modern slavery have worsened, such as poverty, inequality and unemployment. Construction, manufacturing, including ready-made garment production, as well as accommodation and food services have been the sectors most affected by the pandemic.
It found that the increased vulnerability of workers to forced labour is often linked to long and complex supply chains, of which businesses have limited visibility. Already vulnerable groups, such as migrant and informal workers, were most affected, particularly in the lower tiers of supply chains.
There is evidence of an increase in the risk of forced labour both in supply chains that experienced a significant reduction in demand, such as garments, and those that experienced demand spikes, such as PPE production.
The problems were compounded by businesses struggling with the immediate impact of the pandemic making it difficult to mitigate the modern slavery risks in their supply chains, including by making it very challenging to carry out due diligence processes on suppliers on the ground.
Additionally, some of the early response by business to the pandemic exacerbated vulnerability to modern slavery, for example by cancelling contracts and withholding payment for goods already produced.
Modern Slavery PEC Partnership Manager Owain Johnstone, one of the authors of the analysis, said: “Covid-related supply chain disruption is a wake-up call for businesses. The evidence that the pandemic has worsened people’s vulnerability to forced labour in global supply chains is overwhelming.
“The pandemic has highlighted the complexity and fragility of many supply chains and reinforced the link between the lack of visibility over supply chains and the vulnerability of workers to modern slavery. More transparent, resilient supply chains are better for business and better for workers”, he added.
Dr Jo Meehan, Senior Lecturer in Strategic Purchasing at University of Liverpool Management School, who led the Modern Slavery PEC project on the impact of Covid-19 on the management of supply chains, said: “Demand volatility has been extremely high during the pandemic. It acts as a driver of modern slavery as it erodes profits, encourages the use of temporary and precarious workers, and destabilises capacity in supply markets.”
“Covid-related supply chain disruption is a wake-up call for businesses."
Owain Johnstone, Modern Slavery PEC Partnership Manager
However, the Modern Slavery PEC’s analysis has also pointed out that the pandemic may lead to longer-term positive changes to supply chain dynamics. This includes greater visibility and awareness of supply chains that Covid has forced on businesses and increased awareness of exploitation affecting supply chains.
Dr Meehan said: “Our study revealed that because of the pandemic, two-thirds of businesses sourced from new suppliers and undertook additional supply chain mapping. Therefore, there is an opportunity for businesses to use these new relationships as springboards to understand the impacts of their own business model and practices, and how they may change to collectively tackle, and prevent, modern slavery.”
For example, evidence suggests that some businesses have already moved towards the ‘localisation’ of their supply chains, working to shorten them and bring suppliers closer to home to avoid future disruption, which is likely to decrease modern slavery risks. Another example includes extending inventory planning cycles to take their longer-term demand into account and enable better workforce planning.
Johnstone said: “It’s clear that the crisis has pushed businesses to strengthen their hold on their entire supply chains, which can make it easier to address any exploitation issues potentially affecting them."
