At Innovation Forum, we held another of our conferences last week. We brought together about 160 company executives, NGOs, government agencies and other experts to debate the thorny topics in the title of this post. Here’s a few of the bullet notes I took that sum up some of the key questions companies taking part are wrestling with today below.
Now, many of these have become “truisms” in recent years. Cliches, almost. But as the regulatory and reputation risk agenda expands and grows, I thought it might be useful for those of you reading my scribblings on this blog to see what some of the leading companies are saying and thinking.
- Important to remember that on modern slavery we are tackling criminal activity that should be reported, not just ‘sorted’ with suppliers, or by walking away.
- Workforce exploitation is both rampant and highly profitable in the EU. Criminal gangs are making millions from it, and penalties are lighter than other areas of crime.
- Auditing and CoC’s have their place but are not enough. They may give you comfort but do not look far enough under the bonnet. They are simply not a sharp enough tool.
- Auditors should consider the fact that they have a moral responsibility to report crime beyond just to their client as breaches of CoCs.
- Law enforcement agencies generally don’t understand modern slavery in the way they understand other crimes which they are more familiar with.
- Low level interventions early on are key and can be highly effective in preventing the spread of criminal activity in the supply chain.
- We are seeing some companies take back contract work internally as a result of the UK Modern Slavery Act, to lower risk and raise visibility.
- When embedding your supplier code, vital that direct suppliers make a clear commitment to improve, and see it as efficiency and business operations improvement, not just compliance.
- “You cannot eliminate all risk” but robust internal systems are the key to managing effectively. Build those first.
- Many companies are still very unclear about the human rights risks inherent in their direct sourcing operations/suppliers.
- Price pressures on suppliers are enormous and must be taken into account when planning. Terms and conditions of traditional contracts will likely need altering to protect workers rights.
- Key success factors are leadership from the top of your business, clarity in decision making, due diligence frameworks, business models with human rights as a core element, leverage over supply chain, freedom of association and collective bargaining in the supply chain and partnerships and collaboration. All these can both reduce risk and improve cost efficiency.
- Companies will need to consider supplier margins when asking them to tackle modern slavery and force labour and human rights issues generally: Are they a sustainable business?
Those who attended the event will get a much more comprehensive list of bullets via email shortly from my colleague Boris Petrovic.
If you’d like to stay updated on our work in this area, sign up for updates on www.innovation-forum.co.uk (there’s a newsletter each week with original analysis, free podcast and webinars, and articles on there)
We’ll be running more events on this area in 2017. For now, here’s what’s coming up shortly: