Big Business and Modern Slavery: A Godot Story
With years of experience speaking to multinational businesses about modern slavery, their workplaces and supply chains, we’ve observed the thinking and working of these businesses as it relates to modern slavery and human rights more broadly. And, in short, the portents are not great. We believe there is a Godot, but we are still waiting.
Tackling Modern Slavery has No Substantial Barriers
The very first thing we’ve learned is that there is a predictable pattern in tackling the barriers of modern slavery. And none were, what we would call, ‘substantial’ issues. By substantial obstacles, we would be talking about failing to agree with the premise that modern slavery is terrible, or that human rights doesn’t belong in the workplace. Substantial barriers would be about not seeing the figurative forest. But they universally get that there is a forest. They are just 100% focused on the trees.
A Good Supply Chain Depends on Goodwill
As we said some years ago, and it turns out to have been more prophetic than we had wished, the difference between a good and a bad supply chain boils down to just goodwill. It turns out to be true.
So, in our sample, all multinationals have agreed on a vision of no modern slavery in supply chains. Unanimously they agree that human rights compliance does belong in the workplace. They also universally are sympathetic to the notion of not having modern slavery in their own business. And, again universally, most seem to care about the spectre of negative publicity for it being uncovered in their company. However, they all found the risk of discovery remote and the expected cost to them short-lived.
For the record, of our admittedly non-random sample, 90% are public companies, 10% private companies and several are certified B-Corps. There is an even split in our sample of businesses that make public statements about human rights, modern slavery and being ethical, and those that have said nothing much.
With these various points of universal agreement on the vision, you might expect some traction for an offer to discover, map fully, assess, and monitor, against a comprehensive human rights framework, the working conditions in every workplace in an entire supply chain. Even just out of curiosity!
But it is not the case even when it is offered very cheaply, or even free.
While of course, this is not a scientific sample of the world’s big business (we would welcome such a study, though – hint, hint!), we’ve gathered observed empirical evidence, about the reasons there is next-to-no action by multinationals on human rights, and specifically modern slavery, in their supply chains.
Top Reasons There is Little Action on Human Rights and Modern Slavery
- No interest in improved supply chain visibility.
Modern slavery exists in the dark; opaque and complex supply chains have allowed it to breed and grow. The antidote, logically, is to improve visibility; get a clear and open view of the supply chains down to the very bottom. It’s understood there is single-figure % visibility of supply chains for multinationals, and the conversations we have had bear that out. There is almost no systematic visibility further than tier 1, and no real interest in going there. The ones we have spoken to are happy enough rather not to see. There are several reasons for it, as explored a little more below.
- It can’t require ‘too much effort’
This sounds terrible, I know, but in truth, this was a response from every single big business. It would be too much effort if, for example, staff time needs to be invested in explaining it to suppliers, and explaining it to staff. Although in our human rights compliance platform, all the tools are there to inform suppliers and staff. And each worker spends an average of 6-12 minutes a year answering our questions. But it’s still too much. We are still trying to work out how low the bar has to be.
- Assume low “care threshold” of suppliers.
We found that of these “apex businesses,” with significant commercial pull over their suppliers, they don’t want to act because they think their suppliers will care. We didn’t find any of these businesses had gone as far as to discuss it with any of their Tier 1 suppliers. But there is a universal assumption that while their commercial relationship might pull suppliers in, they will neither be willing to get involved or not care very much. This is a reasonably sad testament to the perception of the values of their suppliers, but also find it cannot possibly be true, even purely in a statistical sense.
- Competitive secrecy.
This ranked very highly in the minds of every business. We note this is a ‘perception’ of the desire of supplier secrecy, as we did not come across a business that had explicitly asked its Tier 1 suppliers how they would feel about transparency. Supply chain transparency, by the way, means quite simply that actors in the same supply chain can see the entire supply chain. None of the apex businesses want it. When asked why it was attributed mainly to a worry their suppliers will be against it. Even though it is a downward-looking process (those higher in the supply chain can see down but those down in the chain cannot see up more than one tier); we were advised that supply chains are secret for competitive reasons. And this is not secrecy from actual competitors, because supply chain transparency is made to apply to a single supply chain, but that’s the ‘secrecy’ reason featured amongst businesses in the same supply chain. That is, surprisingly, it is about secrecy from each other. One presumes suppliers in Tier 1 don’t want their buyers seeing who their sellers are below them for fear of being bypassed. And of course, supply chain actors bringing no value chain improvement would be cut out in a fully transparent ecosystem.
- Only want to work on the highest risk issues.
Universally, no one wanted to adopt a ‘universal human rights’ approach, but one based only on high-risk worksites; and this was presented as an exclusive focus on primary production sites in Tier 3. On the surface that doesn’t sound too bad, as it is where the bulk of cases would be. But you have to look at the hundreds of thousands of modern slavery cases in every OECD country. The unethical corporate behaviour experienced in numerous capitalist systems, including the Amazons of the world, to realise it is false. Until you exactly know the risk, you cannot take a risk-based approach. And accurately understanding the risk requires transparency. Chicken and egg enter about now. Moreover, assuming you know the risk, only acting on that leaves an awful lot of space for bad actors: if you want to build a dam, you don’t reach for chicken wire.
Where to Go From Here
Where do we go when family-held companies, companies with investors, and even B-Corps do not take up an offer to provide 100% supply chain visibility, 100% workforce visibility, guarantees of universal human rights compliance, and 100% freedom from modern slavery in their supply chain?
And for reasons that have nothing to do with the vision of being rid of modern slavery?
It’s a great question and, frankly, I’m sure you will agree, there is no great answer: nothing but pure optimism for the moment.
Models for Promoting Transparency are Far from Supporting Improvements
Our empirical understanding shows up many what are thought to be leading models for promoting transparency in business, such as modern slavery legislation, might have a place. Still, they are very far from being able to support real improvements. If these laws do not promote genuine, provable, transparency much-vaunted by the proponents, then the point of the legislative approach is mostly lost. The 9.5 percent effectiveness rate in the UK for its Modern Slavery Act does not even speak to tangible, provable results. Statements are just made on honour.
Business Taking Human Rights Seriously is A Work in Progress
Approaches to get multinationals to take modern slavery more seriously, or even human rights more broadly, are a work in progress. We are nowhere near ‘there yet’. The crux seems to be that leadership is lacking. A leader of a multinational willing to stand up and declare the vision and their intention to take transparency seriously is entirely lacking.
Multinationals Must Bet on The Power of Transparency, Rather Than Fear
What’s needed is a great business leader to stand up. It requires a multinational with the courage to stand up for human rights in workplaces universally, not only in the odd child-labour mine. It demands a multinational bet on the transformative power of transparency instead of being held captive by the fear of it.
But, to leave you with a few questions for yourselves: who is the champion? Where do we find them? How do we know when we have them? And will anyone follow?
The world is waiting. But where is Godot? He should have been here by now.