Supply chain ethics and modern slavery: what you need to know

How much do you know about the ethics and practices of the suppliers in your supply chain?

Transparency around the nature of your suppliers’ and partners’ business practices is vitally important. Are they using sustainable materials? Do they treat their workforce fairly? Do their manufacturing processes meet environmental standards?

And most importantly, are there any signs of modern slavery in your close suppliers’ practices or those of the suppliers further down the supply chain?

What does ‘modern slavery’ mean in supply chain terms?

Modern slavery in a supply chain refers to severe labour exploitation where workers can’t refuse or leave their work due to threats, coercion or deception. It encompasses areas such as forced labour, debt bondage, human trafficking and child labour.

As part of the social and governance elements of your ESG responsibilities, it’s essential that your business looks for the tell-tale signs of modern slavery and stays vigilant.

Six important ways you can check for signs of modern slavery

1. Document and map your supplier tiers

Map your supply chain and identify all of your immediate vendors and their sub-contractors. Focus on the most labour-intensive sectors, such as cleaning, security or offshore apparel manufacturing, where there is a higher risk of labour exploitation and mistreatment of staff.

2. Run risk assessments of your supply chain

Review your entire supply chain using key risk indicators to find the most high-risk areas. This can include focusing on high-risk geographic regions, low-margin industries, or suppliers that are heavily reliant on vulnerable seasonal migrant labour.

3. Search for ethical suppliers as part of your procurement process

When taking on new suppliers, use modern slavery questionnaires as a key part of your standard procurement process. This forces new vendors to confirm their legal compliance with labour laws and state whether workers retain their own passports, etc.

4. Train your procurement team in the signs of modern slavery

Educate team members who buy goods or approve invoices in the key ways to spot modern slavery practices. Red flags may include suspiciously low pricing in quotes, unapproved sub-contracting, or a vendor that’s resistant to providing transparent details of their business.

5. Have safe reporting and whistle-blowing channels

Make sure you have clear, confidential grievance mechanisms in place to report poor labour practices. For example, you could have a software platform where supply chain workers can safely report forced labor or wage theft directly to management, without fear of reprisals.

6. Collaborate with partners and others in your supply chain

Many businesses will share suppliers and upstream providers which can be useful in spotting issues in your supply chain. Make sure you have good connections and compare notes, with partners and collaborating businesses to help you identify any issues you may not otherwise spot. Make sure these are supported by additional investigation or sources so it's not a false positive.