In 2016, the Walk Free Foundation noted that 124 countries had criminalized human trafficking in line with the UN Trafficking Protocol, 96 had National Action Plans (NAPs) to coordinate responses and 150 governments were providing some form of support for victims of modern slavery. The introduction of national legislation is an indication that governments are beginning to address the domestic and reputational implications of modern slavery in business on a grand scale.
However, existing legislation and reporting requirements, such as the UK’s Modern Slavery Act of 2015, represent merely a baseline. It is simply not sufficient for companies just to abide by the letter of the law. Companies will also need to exercise prudent judgment to fulfil the moral expectations of society, carefully analyzing whether transactions would be considered legitimate in the eyes of a socially active and connected public, not to mention clients and other partners.
Defining modern slavery
It is important to understand the nuanced vocabulary of “modern slavery” in terms of defining slavery, forced labour and the economic exploitation of individuals or groups. Likewise, it is prudent for a business to insist that its partners and supply chains take all reasonable and practical steps to conform to a common understanding of slavery, to comply with relevant legislation and regulations in the countries in which they operate.
On the other hand, it’s important to account for global wage and expectation differentials that form the basis for competitive advantage and socioeconomic mobility, which vary by society and country. Indeed, these differentials support the logic of outsourcing and multinational corporations.
Prudent companies and institutions should focus on ensuring that business practices are assessed in relation to regional contexts and what is considered legitimate in exchange for the service that is being provided. Within this context, a fair day’s wage for a fair day’s work can be reasonably set at different levels in countries as culturally, economically and commercially diverse as, for example, Denmark and Bangladesh. To a large extent, the issue of “what the market will bear” will determine what is acceptable to both sides of an agreement. However, organizations have a legal duty to drive out poor labor practices in their business and could be considered to have a moral commitment to incentivise continuous improvements in supply chains.
Anti-slavery policy: Best practices
Companies need to introduce and maintain a business-wide, zero-tolerance approach to modern slavery in their procurement processes, supply chains and partnership networks.
Guidance about policy formulation and implementation should include:
- A clear definition of what constitutes modern slavery in relation to those countries where a company conducts business
- A statement of zero tolerance for the procurement of goods and services from sources associated with modern slavery and human trafficking
- Prohibitions and approval mechanisms to ensure that the procurement of goods and services from sources involved in forced labour is avoided
- A requirement for annual reports, approved by the company’s board, demonstrating the integrity of supply chains by publishing identification, minimisation and mitigation measures in relation to modern slavery
- Guidance for investment and procurement personnel about best practice and reporting requirements with regard to both anti-slavery legislation and company policy
- With respect to third parties and partners, obtaining formal assurance that they comply with both relevant legislation and company policy
- The appointment of a champion officer to maintain assurance on all matters relating to modern slavery and associated practices
- Plans for training and capacity-building within the business
- A response mechanism in the event that examples of slavery, forced labor or unfair employment practices are discovered within the company or its supply chain
- A provision for auditing procedural and system integrity by externally trained, internal company members or by third-party independent auditors
Anti-slavery provision: Advantages
Not only are company brands and reputations protected by having rigorous anti-slavery provisions, but an increasing number of investment funds and businesses are specifically seeking to associate themselves with demonstrable ethical standards. With these provisions in place, increasing transparency and resilience are established within supply chains and partnerships, allowing for more efficient business relations.
Conversely, modern slavery often has links to other forms of illicit activity, notably involving money laundering, drug trafficking and prostitution. In addition, almost half of the world’s illegal deforestation is slave-based, making criminal slaveholders responsible for 2.54 billion tons of carbon dioxide entering the atmosphere annually, more than any country except China and the US. This means that the consequences for businesses associated with modern slavery can include severe sanctions and penalties across several areas of operation.
Therefore, it is essential that compliance professionals be able to differentiate between what is – and what is not – slavery or trafficking, and be equipped to fervently combat modern slavery wherever it is discovered.
This is an abridged and adapted version of the original article written by Rear Admiral Chris Parry CBE PhD “Modern Slavery – What it seems, more or less.” To read the full article, visit: bit.ly/modern-slavery-whitepaper.