Companies including Walmart, Mondelēz and Apple spoke at the Thomson Reuters Foundation’s annual Trust Conference about their efforts to tackle modern slavery in supply chains.
Modern slavery is “big business,” according to Jean Baderschneider, CEO of the Global Fund to End Slavery. With an estimated 40 million slaves in the world (a quarter of them children), the illegal trade in human beings is worth $150 billion each year – second only to drug trafficking.
The first day of the Thomson Reuters Foundation’s Trust Conference 2017 brought together activists, academics, government representatives and survivors of human rights abuses. Crucially, it also involved global businesses. As the UK’s Independent Anti-Slavery Commissioner Kevin Hyland put it at the conference, “we cannot underestimate the impact that the private sector can make in eliminating this crime”.
At a panel on “The Role of Business in Eradicating Forced Labour”, representatives of Walmart, Mondelēz and Apple were joined by John Morrison, CEO of the Institute for Human Rights and Business, and Professor Bobby Banerjee, of the Cass Business School. Afterwards, we caught up with Jan Saumweber, Senior Vice President, Responsible Sourcing at Walmart, to talk more about the issues raised.
The role of business
All three companies talked about the efforts they are making to tackle human rights abuses, and the business imperatives for them to do so. John Morrison commented that the introduction of the UN Guiding Principles on Business and Human Rights in 2011 means that businesses no longer argue about whether they have a responsibility in terms of human rights. Companies have become more open in talking publicly about supply chain risks – and legislation such as the UK Modern Slavery Act increasingly requires them to do so.
Paula Pyers, Apple’s Head of Supplier Responsibility, said the tech giant has been working to map its supply chains since 2008. In a recent report by Amnesty International, Apple was praised for its efforts in tracing the sources of its cobalt. In 2015, it became the first electronics company to commit to zero recruitment fees. Since then, it has uncovered violations which have resulted in over $28 million in recruitment fees being paid back to over 34,000 workers in its supply chain.
Meanwhile, Jan Saumweber showcased Walmart’s efforts to tackle slavery in Thai fish supply chains. The retailer is working as part of the Seafood Task Force – alongside NGOs and food companies including Mars, Nestlé and Thai Union – to develop traceability and accountability in the supply chain. The Walmart Foundation has funded the Issara Institute to develop a “TripAdvisor-style” smartphone app, allowing migrant workers in the Thai fishing industry to rate employers and recruiters.
Earning consumers’ trust
For Cathy Pieters, Director of Mondelēz’s Cocoa Life Program, tackling child labour is a business imperative. Over 60% of the world’s cocoa is grown by smallholder farmers in just two African countries, Côte d’Ivoire and Ghana, where economic, environmental and social issues are all interlinked. These linkages create challenges, but also opportunities – for example, giving a voice to women in cocoa-growing communities is not just the “right thing”, but also the “smart thing” to tackle child labour.
Cathy said that investors increasingly recognise the business impacts of human rights issues, and value transparency initiatives, such as Mondelēz’s online map of cocoa suppliers. However, the company’s consumer research shows less appetite for such information. Consumers, she said, expect “authenticity and quality” from the brands they trust, and look for assurance that these expectations are met.
Jan Saumweber summarised this idea succinctly from Walmart’s perspective: “Responsible sourcing is key towards our goal of being the most trusted retailer.”
After the panel, Jan told us that Walmart has identified priority issues – human trafficking, forced labour, underage labour and unsafe working conditions – and identifies areas where these risks are highest where Walmart can have greatest impact. “We’ve made a commitment to identify and take action in ten supply chains over the course of ten years, and tackle some of the harder and more complex issues,” she said.
Jan also addressed a point raised during the panel’s Q&A session, about whether large companies with sophisticated supply chain programmes have a responsibility to share their expertise and resources with others. Jan said that Walmart’s position as a retailer means it has a role in “setting expectations” for its suppliers and “communicating what our expectations are,” in collaboration with other retailers.
“We did that in Bangladesh, where there were many European and American companies sourcing,” she said. “The crisis of the Rana Plaza building collapsing brought everyone together to look at ‘how do you tackle this in a different way?’ We aligned on one set standard, one audit that would verify against those standards. And then the effort can be put into remediation and progress, rather than duplicating efforts.”
This approach carries over to Thailand, where Walmart is working with the government to help improve enforcement of labour standards on smaller vessels. Globally, Walmart has committed not only to eliminate recruitment fees from its own supply chains, but to work alongside UN agencies and civil society to eradicate them globally by 2026. “Partnership is the new leadership,” as Jan put it.
How to eradicate modern slavery
Walmart, Mondelēz and Apple provide a best-practice model for other companies to follow. They present a clear long-term business case for risk-mapping supply chains, investing in suppliers’ capacity-building, and collaborating with civil society. As Cathy Pieters from Mondelēz put it, “a supply chain that is built on slavery is a weak supply chain”.
Yet not everyone grasps this business case. An analysis of US corporate submissions under the Dodd-Frank Act shows that 80% of companies don’t know if their products contain conflict minerals. In the UK, 43% of the FTSE 100 fail to meet the minimum requirements of the Modern Slavery Act. Why is the majority of action against slavery being undertaken by a minority of companies?
The answer is, of course, economics. For consumer-facing companies operating at scale, the business case for combating modern slavery is relatively obvious. For the many smaller, anonymous suppliers who support the modern economy, the short-term cost of supply chain due diligence continues to outweigh any long-term benefit.
During the panel, Bobby Banerjee argued that slavery is a “natural outcome” of globalised business models. Businesses have a responsibility to challenge this narrative. Where market incentives lead to slavery, businesses must support efforts to remove those incentives. Jean Baderschneider, of the Global Fund to End Slavery, used the example of safe harbour legislation, through which banks are incentivised to share information on money laundering and terrorist finance.
Ultimately, an end to slavery means an end to business-as-usual. It means transformation within industries, and across entire supply chains. Slavery will only be eradicated when the best-practice followed by Apple, Mondelēz and Walmart becomes commonplace.
Charlie Ashford is a Consultant at Corporate Citizenship.