Addressing modern slavery in long and complex supply chains

This is a research summary of the report Addressing modern slavery in long and complex supply chains. This research was conducted by Professor Alexander Trautrims, Dr Oana Burcu, Faiza Zafar (University of Nottingham Rights Lab) and Charlotte Lush (Workforce Disclosure Initiative, ShareAction).

This research assesses the supply chain governance structures of 15 UK-based utilities and industrials companies and explores their use of particular approaches taken to addressing modern slavery, as well as how they understand the effectiveness of those approaches.

Key findings:

1. Documented supply chain governance practices among utilities and industrials companies engage some good practices - such as board-level oversight of modern slavery work and collaborative training initiatives - but have crucial gaps in relation to key areas such as freedom of association for workers in the supply chain, the allocation of sufficient company resources to addressing modern slavery risk, and navigating cultural differences that can constrain conversations with suppliers in different countries.
2. Utilities and industrials companies need to do more to directly engage workers or worker representatives in their supply chain governance activities. Existing research evidence emphasises the importance of multi-stakeholder collaborations, and crucially the involvement of workers and their representatives, to the effective governance of modern slavery risk in supply chains.
3. Utilities and industrials companies recognise the shortcomings of the most commonly used supply chain governance approaches (such as codes of conduct and audits) in practice, but still continue to rely upon them.
4. Most utilities and industrials companies lack visibility beyond Tier 1 of their supply chain. Collaborative approaches to increasing visibility and leverage over shared supply chains, while reducing the reporting burden for suppliers, are needed.

Recommendations:

Measuring effectiveness

• Companies: Bring together modern slavery experts from your sector with relevant stakeholders and workers’ organisation to agree on and benchmark progress measures for supply chain governance, including progress towards inclusion of workers and workers’ representatives. These progress measures could be categorised as baseline practices, peer achievement, and leading practice.
• Policymakers: Encourage sector initiatives for the development of progress measures and harmonized reporting framework. Supply chain sustainability reporting should be mandatory, linked to these progress measures and follow a harmonized reporting framework.

Action on due diligence

• Companies: Link due diligence results to concrete action and interventions.
• Policymakers: Mandate modern slavery due diligence and linked action, which would require action on identified risks and impacts, including reporting and ongoing monitoring and improvement of processes.
• Policymakers: Support the development of geographically targeted communication materials to enable companies to have meaningful and culture-tailored engagement with suppliers in higher risk geographies.

Modern slavery in supplier contracts

• Companies: Communicate modern slavery expectations in contracts and accompany these expectations with clear commitments on support and remedy that the buyer firm will provide when instances of modern slavery are identified.
• Policymakers: Strongly encourage and incentivise buyers to undertake due diligence and failure to act in response to modern slavery risks and/or impacts. Statutory guidance on implementation of obligations under section 54 of the Modern Slavery Act and public procurement legislation could be utilised for this.

Remediation

• Companies: Implement remediation processes in supply chain which include action such as: utilising independent, worker-led grievance mechanisms and remediation assurance; encouraging disclosure of modern slavery instances and reporting on remedy provision; and assurance that active engagement and support for remedy by buyer companies is recognised as a positive activity.
• Policymakers: Support engagement platforms that bring together worker-led organisations, civil society and buyers, particularly in areas where modern slavery risks are further away from the buyers.

Embed modern slavery work across the organisation

• Companies: Empower modern slavery specialist functions in the organisation to influence key company decisions on their supply chains and their supplier relationships and mainstream modern slavery as a topic in decisions across relevant corporate functions.
• Policymakers: Support empowerment of modern slavery roles in organisations and implementation of modern slavery considerations in everyday and strategic business decisions. Encourage boards and directors to create and annually review an anti-slavery strategy and evidence of action.

Risk mapping

• Companies: Work collaboratively with sector and suppliers to map supply chains and risk areas beyond Tier 1. Support worker-led organisations in high-risk areas to develop supply chain remediation that prioritise workers’ protection.
• Policymakers: Support due diligence that highlights where in the supply chain modern slavery risks are highest. Encourage supply chain mapping through public contracts and support the setup of sector initiatives to address these risks, even where a contractual link to upstream modern slavery risks is only likely but not trackable.