Strategies for growth

Modern slavery is everyone’s business

Modern slavery is everywhere. It could be in the phone you hold in your hand, the shirt on your back or the car wash down your street. It is worth $150 billion annually and businesses have a role to play in eradicating this scourge.

By Rebecca Ellinor Tyler

Earlier this year, 11 members of a family in Lincolnshire were convicted following trials for modern slavery offences.

While they enjoyed luxury holidays, performance cars and cosmetic surgery, their victims lived in squalor. Housed in caravans without running water or toilets, they were only given food when they were working – resurfacing driveways – and then sometimes little more than leftovers.

They were not physically trapped but they had become institutionalised by their slavemasters who financially, emotionally and physically abused them. One man had been exploited for 26 years.

This might sound like slavery is a sorry tale far removed from the corporate world but, as a global business, it’s worth roughly $150 billion a year and the truth is that it’s endemic. The UN estimates there are 21 million victims of forced labour internationally, while the Walk Free Foundation suspects there are as many as 45.8 million slaves worldwide. India alone accounts for more than 18 million of these.

Slavery exists in most countries and in different forms, including sex trafficking and the forced and bonded labour of children. Thousands of these victims are in the UK and many more concealed in the supply chains of businesses based in, or operating on, British soil.

The latest statistics from the UK’s National Crime Agency show that 3,805 potential victims were notified to the National Referral Mechanism during 2016, a 17% increase on 2015. Potential victims were of 108 nationalities, with Albanian, UK, Vietnamese, Nigerian and Chinese slaves topping the list. It’s also worth noting that referrals of exploited minors increased 30% to 1,278 in 2016.

‘You probably have a problem’

For many Western businesses, the problem goes back decades to when large swathes of production were switched to developing nations in the hunt for cheaper labour. The result is that many companies today don’t know precisely who is connected to their business and brand – including slavemasters and the victims themselves. Supply links are often so long, fragmented and complex that it’s incredibly difficult for corporations to identify where problems lie and how to begin to tackle them.

Campaigner Andrew Wallis OBE, whose work paved the way for the Modern Slavery Act, says companies should start from the perspective that they’ve ‘probably got a problem – get over it, then move on to what they’re going to do about it’.

He says the reality is that individuals and companies big and small are all party to slavery, however indirectly. His stark message is: ‘If you own a smartphone, an item of cotton clothing and eat food, you’ve probably got in the region of 40 to 60 slaves who work or have worked for you.’

UK legislation ensures perpetrators can receive suitably severe punishments for their appalling crimes and offers enhanced protection and support for victims. And it requires organisations with a turnover exceeding £36 million to publish an annual slavery and human-trafficking statement describing all the things they’ve done to tackle slavery in their supply chains. To comply, they must ensure this statement is linked to a prominent part of their homepage, is approved by the board and signed by a director. And while supply chains are chiefly the responsibility of procurement and operations directors, HR managers have a role to play in preventing poor hiring practices.

Even so, 18 months after the UK’s anti-slavery law came into full effect, thousands of businesses are thought to have missed the deadline to produce a statement, while others are yet to hear about the Act. Many more, they say, have produced statements that comply with the letter, rather than the spirit, of the law. And while the Act represents progress, its requirements have several shortcomings. Companies, for example, are not told what to include in their transparency statements, nor are they compelled to take any action: they simply must report on what, if anything, they are doing to identify and stop slavery.

Research report
Planning for growth: Don't let uncertainty hold your business back Discover the barriers and accelerators to private sector growth

It’s everyone’s business

On the flipside, larger companies covered by the threshold are quizzing smaller suppliers about their efforts in this area, which is having a positive trickle-down effect. And some companies are taking serious measures to eradicate forced labour from their supply chains.

Two years ago Monique Villa, CEO of the Thomson Reuters Foundation – the philanthropic arm of the news and information provider – established the Stop Slavery Award to shine a light on the issue and encourage and reward transparency in business.

‘I knew this award was badly needed,’ she tells Strategies for growth, ‘but I couldn’t have foreseen the response we had from corporations of all sizes.’

Among the shortlisted candidates were Apple, Tesco, Fortescue Metals Group and R Twining & Co. The winners were NXP Semiconductors and Hewlett Packard Enterprise.

The first of these two tech companies, Dutch global manufacturer NXP Semiconductors, demonstrated it had excelled in making the fight against slavery ‘everyone’s business’ in the company.

Among the working practices implemented by NXP were identifying staff vulnerable to trafficking and slavery, and conducting training for suppliers to help them make informed purchasing decisions and ensure that working conditions are safe and healthy.

Meanwhile, US IT provider Hewlett Packard Enterprise scooped a win for its policy of openly engaging with outside parties and experts on risks it had identified in its supply chain. It also hosted anti-trafficking workshops with suppliers and labour agencies from Indonesia, Singapore and Thailand after identifying a growing risk of forced labour among foreign migrant workers.

‘No business can confidently say it is “slave-free”,’ says Villa. ‘So many goods, commodities and products are tainted, but admitting you’re taking steps to combat the problem counteracts the potential damage to your brand. The impact is far more damaging when the problem is ignored.’

Children are dying

Close to Villa’s heart is the role of the media in this fight. The foundation’s news team investigated the mining of mica in India, where children as young as five were dying in dilapidated mines for a mineral used to put sparkle into cosmetics, mobile phones and car paint.

‘Shortly after we published the story, Volkswagen announced it was suspending ties with some suppliers of mica in India. This not only demonstrates the value of keeping these issues high on the news agenda, but that having slavery in your supply chain can disrupt your supply chain.’

Campaigners say there is no economic argument for ignoring slavery: it’s bad for reputation, risk, quality control, share price, consumer and investor confidence. But tackling modern slavery does require a multi-faceted approach.

Villa says: ‘Business has a huge part to play, but cross-sector collaboration is vital. We need governments, non-profits and other leading organisations to join the business sector in flexing their muscles to try to bring an end to it.’

David Newstead, Assurance Partner at Grant Thornton, says the firm is raising awareness of the issue with clients and contacts. ‘We’re helping them to think about their governance structures and the importance of setting the tone at the top of their organisation.

‘Establishing processes and controls and stretching deep into the supply chain is becoming more relevant.’ 

Should you be worried?

If your supply chain involves these 10 countries, the answer is probably ‘yes’. The numbers below are people estimated in modern slavery

1. India: 18,354,700

2. China: 3,388,400

3. Pakistan: 2,134,900

4. Bangladesh: 1,531,300

5. Uzbekistan: 1,236,600

6. North Korea: 1,100,000

7. Russia:  1,048,500

8. Nigeria: 875,500

9. DR Congo: 873,100

10. Indonesia: 736,100

Our response

Karen Higgins, Head of Sustainability, shares five things we have done to help tackle modern slavery:

1 Put in place robust recruitment processes in line with UK employment laws.

2 Developed a Responsible Purchasing Policy and a Supplier Code of Conduct.

3 Made a commitment to collaborate closely with suppliers to help them understand and work towards their own obligations under the Modern Slavery Act.

4 Made a hotline available for employees to report suspicions of modern slavery.

5 Included modern slavery as a section in the company’s Annual Declarations. 

> Read our Modern Slavery Statement