They may not be in plain sight but there are 45.8 million people in some form of modern slavery – sex slavery, forced or bonded labor. That’s the combined population of New York, London and Bangkok. Modern slavery is a lucrative 150 billion-dollar industry that may also touch your enterprise.
A raft of laws and updates are emerging to tackle the modern slavery industry, from the UK Modern Slavery Act, the California Transparency in Supply Chains Act (CTSCA), the Trade Facilitation Act, the Dodd-Frank Act Section 1502 that addresses conflict minerals, and the proposed Business Supply Chain Transparency on Trafficking & Slavery Act.
“Multinational companies can play an essential role in the fight against forced labor: they have the power to trigger immediate change for workers by simply switching suppliers, by enforcing better auditing, and by increasing accountability.”
|The Thomson Reuters Foundation covers the under-reported stories around modern slavery and runs the Stop Slavery Award, recognizing companies that are taking concrete steps to eradicate slavery from their supply chains.|
Following the slavery industry’s money trail
Financial regulations and programs, from Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and the Bank Secrecy Act (BSA), also try to prevent the illicit financial gains from the modern slavery industry that eventually show up in our financial system.
Not only should the impact on society as a whole be considered, the risk of reputational damage and loss of consumer confidence in your organization, along with its products and services, is a reality if your organization is linked to modern slavery. Customers, business partners and investors may think twice about engaging with a company that cannot demonstrate the cleanliness of their supply chain or business relationships.
To meet the growing requirements you need a robust risk-based approach when on-boarding new suppliers and third parties, ensuring a proportionate level of due diligence is performed when doing business with certain industries or countries that may be classed as heightened risk. Ongoing monitoring is also critical to ensure any changes are tracked and assessed to ensure continued compliance with regulators around the world.
Turn compliance into a competitive advantage
The upcoming Corporate Human Rights Benchmark (CHRB) ranks companies on their disclosures on human rights issues, and their responses to serious allegations. It will be the first-ever ranking of the world’s largest publicly listed companies on their human rights performance. The data will enable investors and the public to compare human rights efforts across multiple companies and industries and support them to make better informed decisions about what companies to invest in, or who to buy from.
“Public transparency and company ranking can encourage positive market competition to drive a race to the top. Companies who fail to disclose may be left behind or find they suffer an increase in reputational challenges.”
– Warrick Beaver, MD, Customer & Third Party Risk, Thomson Reuters
As a world leader in supply chain intelligence and third party risk management, Thomson Reuters helps you stamp out forced labor by arming you with the tools, technology and data you need to bring new levels of transparency to your global operation.
Download the report: Answers on modern slavery in business supply chains.