Is your business doing enough to stop modern slavery?

03 February 2016 -

High-street giants H&M and Next have come under fire after investigations discovered child labour in their supply chains. The retailers moved quick to address the problem, but do businesses need to do more in the fight against slave labour

There are few issues that bosses would less like their company to be associated with than modern slavery. Yet Retail chiefs are under pressure to investigate their own supply chains after clothing store chains H&M and Next admitted to identifying child labour in supplier factories in Turkey, including Syrian refugee children.

Many Syrian children reportedly work in arduous conditions on labour intensive farms and production units for a pittance, alongside refugee adults who earn significantly less than the Turkish minimum wage of £309 per month.

And with Turkey ranking as one of the largest producers of clothing sold on the British high street, supplying labels that include Topshop, Burberry, Marks & Spencer and Asos, there are fears that the phenomenon could be far more widespread.

With mass globalisation, advanced communication channels and an ever-increasing challenge of keeping costs as low as possible, many of the world's leading companies have taken greater risks in deciding where they source and manufacture their products - often opting for sites in the developing world.

From the collapse of the Rana Plaza factory in Bangladesh in April 2013, the exposé of slavery and human trafficking in the Thai shrimp industry in 2014 to Apple, Microsoft and other corporations buying cobalt from the Democratic Republic of Congo, where Amnesty International described child labour as ‘rife’, examples of supply chain controversies are plentiful.

The United Nation's International Labour Organization (ILO) estimates 21 million people globally are trapped in forced labour, generating $150 billion in illegal profits in the farming, fishing, mining, construction and sex industries.

Phil Bulman, managing consultant at supply chain experts Vendigital, said: “The unethical and forced employment of refugees is a huge supply chain issue for UK businesses. As retailers continue to apply cost-pressure to their vendors, it is inevitable that some suppliers will be tempted to illegally utilise this influx of low-cost labour.”

To combat the troubling predicament, the government has issued the Modern Slavery Act, which forces British companies with a turnover of more than £36m to publish evidence on their websites that their operations are not reliant on international slavery.

As well as allowing customers to make more informed decisions, some organisations hope the legislation will eventually be accompanied by greater labour inspection throughout the supply chain.

A recent report from the University of Sheffield, however, identified a number of vital flaws in the supply chains of large companies:

• Corporations have designed a system of self-regulation that allows their suppliers to cover-up abuses and easily cheat a weak inspection system.
• Supply chain audits are ineffective tools for detecting, reporting, or correcting environmental and labour problems. They reinforce existing business models and preserve the global production status quo.
• The auditing system put in place by corporations gives the impression of detecting and correcting abuses but reinforces the labour and environmental problems that civil society NGOs strive to improve.

But some companies are leading the way in working with foreign suppliers and legislators to ensure the high ethical standing of their supply chains.

While Next and H&M claim to have taken child labourers back to education and are providing support for their families, Nestle has teamed up with human rights organisations to bolster the self-policing of its supply chain, after it had found forced labour in its supply chains in Thailand.

Bulman praised the steps taken by Nestle to uncover the failings in its supply chain, but said organisations needed to be more pro-active in fighting modern slavery and forced labour in their supply chain.

“Businesses must regain control, working to actively seek-out employment violations and evidence of child labour,” he said. “Sweeping moral injustice under the rug is not an option; unannounced spot checks are essential and should be carried out on a regular basis.

“It is damning that once again, an independent report by an NGO has uncovered these practices. Although the recently implemented Modern Slavery Act is a step in the right direction… there is no Government body responsible for ascertaining the validity and effectiveness of these checks. This needs to change.

“Next and H&M have taken the correct stance by admitting the presence of child labour when questioned, but should take one step further and move towards complete transparency. The era of ‘self-policing’ must begin, reputational benefits await retailers who take the impetus to diagnose and publicise their own short-comings.”