If anyone imagined that slavery was a thing of the past then recent media exposés have been a sobering wake-up call. There is a huge problem of forced labour behind many of the products we buy every day, even our tea, cocoa and coffee. Across the world there are people living in horrific conditions and caught in debt bondage, but working as part of global supply chains. And it’s big business: according to the International Labour Organization (ILO), there are 21 million people currently working in some form of slavery, generating around $150bn (£103bn) a year in illicit profits.
The problem is underpinned by poverty: desperate people trapped in poverty are much more vulnerable to trafficking or forced labour, and just as poverty is endemic so too is slavery. So, even though more school children are now enrolled in schools in cocoa producing regions of Ghana and Ivory Coast, for example, research shows (pdf) persistent poverty means that child labour is also increasing.
Increased competition and market concentration in these long, global value chains create downward pressure on price, which in turn squeezes suppliers and intermediaries. Cost-cutting can become corner-cutting, as the collapse of the Rana Plaza textile factory in Bangladesh, three years ago, demonstrated so catastrophically. In this environment it is all too easy for brands and retailers to lose oversight of the conditions and human rights of those in their own supply chains.
That’s why the UK’s groundbreaking Modern Slavery Act 2015, which came into force this month, is welcome progress in driving business responsibility and a real step forward in the fight for justice for vulnerable people worldwide.
For a long time, progressive and ethical businesses have been at risk of being commercially undermined by companies without those values, companies that have put profits before people and chased cheap at any price. But from April 2016 the Modern Slavery Act requires every company with a turnover above £36m to include a statement within annual reports explaining any activities it has undertaken to tackle modern slavery and wider human rights issues within its business and supply chains, including activity prior to the commencement of the new provision. At the Fairtrade Foundation we worked together with other members of the Ethical Trading Initiative (ETI) to support the inclusion of the Transparency in Supply Chains clause in the Act. Whilst this is just a reporting mechanism, the inclusion is important because with more transparency, the public, media and civil society can hold companies to account and demand higher standards.
Since becoming enshrined in legislation, the Act is already having an impact on broader business behaviour, with more disclosure on high-risk supply chains by companies themselves. For example, Nestlé published its own assessment of forced labour in its seafood supply chain in Thailand and more recently acknowledged that, because of a lack of full traceability, it is possible that some of the coffee beans it sources from Brazilian plantations could be produced by slave labour. Such self-policing and openness is rare but is cause for optimism: acknowledging the problem is the first step towards solving it.
But let’s not pretend it’s going to be easy - early analysis of the first 100 company statements revealed that most fell short of the legal requirements and were too broad, generic and brief. There are important ethical and commercial reasons why companies should go further than just minimum compliance with the requirements of the Act, to develop an effective reporting system that delivers genuine improvements and actively supports prevention, protection and remediation of forced labour. There is a long way to go.
Forced labour and the worst forms of child labour, involving children in trafficked or hazardous work, are all too common problems in many parts of the world in which Fairtrade operates – a persistent consequence of complex agricultural sectors such as tea, coffee, sugar, cotton and cocoa where low prices dominate. We have long been committed to going beyond an audit or certification approach, working instead with producers, industry, trade unions and governmental bodies to build partnerships in order to reduce and eradicate such exploitation and to increase protection and support for vulnerable children and adults.
Eliminating modern slavery is covered within the Fairtrade producer standards and Fairtrade trader standard, and everyone who buys, sells or processes Fairtrade certified products from the raw commodity to packaging is required to comply. Fairtrade’s child and forced labour guidelines (pdf) are published online, and we are also working to engage business partners in additional programme support. Fairtrade farmer organisations are also increasingly choosing to invest in their own programmes, such as Fairtrade’s “youth inclusive community based monitoring and remediation” model, in which young people themselves are trained into leadership roles within their communities to fight exploitation. Producers are looking to their supply chain and business partners to collaborate on the training, monitoring and investment required to make this work.
Transparency makes good business sense – mitigating both risks of disruption in the supply chain and reputational damage. It is also, of course, right that companies should recognise that their activities will have an impact – intended or not – and that their mandate to operate in the future will depend on their actions. This is the age of scrutiny and it’s clear from recent scandals that no company is immune. Transparency is here to stay – smart companies will use it as a means of strengthening their support from investors, suppliers and customers alike.
Human rights, including freedom from slavery, are universal and indivisible. In this spirit, the transparency required by the Act should be the norm for all companies, not just those over a certain size. Even smaller businesses should consider voluntarily reporting on their assessment of risks in their supply chains.
This first round of reporting provides an opportunity for all businesses to raise their game, to acknowledge and be open about the risks in their supply chains – after all sunlight is said to be the best disinfectant.
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