The Covid-19 pandemic has helped highlight the nature and scale of forced labour in supply chains. The time to act is long overdue.

Tuesday, 2 February 2021 07:21 GMT

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Covid-19 has exposed some unpleasant truths about the nature of our society – among them, the scale of forced labour in supply chains, and the dangers of chaotic, rushed and unaccountable procurement. Three news stories during the pandemic highlight how our lives are contaminated by slavery and labour abuse.

First, the manufacture of PPE rubber gloves crucial in the fight against the virus. As governments scrambled to source and scale production in the spring of 2020, it quickly became apparent that some of the top Malaysian manufacturers were exploiting workers in dangerous sweatshop conditions, with many also trapped in debt bondage. Forced labour of this kind is a form of modern slavery.

Second, Boohoo in the UK. The fast-fashion retailer was exposed as having poor working conditions and non-minimum wage payments in its supply chain factories in Leicester.

Third, the exploitation of Uighurs across China and the link to raw cotton and consumer products exported across the globe. Multiple global brands were implicated, and the story has resulted in the UK threatening to penalise firms that profit from forced labour in Xinjiang.

There are rules designed to prevent products tainted by slavery entering the supply chain - the USA has barred the entry of some goods following the Uighur revelations, for example. In the UK, anti-slavery charity Unseen that I lead led calls for Transparency in Supply Chains legislation, which eventually formed part of the 2015 Modern Slavery Act.

Under this law, a company with a worldwide turnover of £36 million-plus, and who carry out business in the UK, must publish an annual Modern Slavery Statement. The statement should disclose what they are doing to tackle forced labour in their supply chains and business practices.

Five years on from the legislation there are nearly 3,700 qualifying UK companies with no such statement. The Home Secretary has the power to sanction them, yet not one of them has ever been compelled to report.

This position needs to change, and the recent government announcement of plans to beef up supply chain laws is welcome. But actions speak louder than rhetoric or legal provision, and we eagerly await news of when this will happen.

Supply chain transparency and transformation will only do so much, however. To properly address the problem of forced labour in our society, we need a more socially responsible and sustainable approach to business. This means working towards a system where companies no longer incentivise profits above everything else, extracting as much profit as possible, pushing cost-cutting pressures down the supply chain and creating an environment rich for exploitation. It means breaking our addiction to cheap goods, services and labour.

There is evidence to show what happens if we apply the principles of decent work and a contextualised living wage down the supply chain for a global apparel brand. To do this, according to research by the ethical finance expert Sasja Beslik, the price of a pair of jeans would increase by no more than 23-50 cents. In return, it could mean 20,000 children, aged five to 14, who are working in supplier factories, could be put back into school.

The guidelines for procurement need to change, too. We need to get tougher on sanctioning those companies that ignore abuse or cut corners and reward those that play by the rules.

Governments, with their tremendous purchasing power, could take the lead in this area – awarding contracts only to those genuinely looking for forced labour in their supply chains, finding it, making restitution, applying the lessons learned and reporting it. Prioritising a social value metric above profit margin.

What I’m suggesting is not naive. On the contrary, it makes total commercial sense. The impact when exploitation is exposed is immense for any business. After the Boohoo revelations, investors took flight, wiping £2bn off the value of the company.

A responsible business will want to be on the right side of history. Across multiple sectors – including apparel, electronics, construction, health and beauty, agriculture and many more – companies are increasingly having to answer to politicians, investors, media and consumers. Increasingly, the public wants to know what companies are doing to ensure their products are free from forced labour. An organisation that ignores this does so at their peril.

Supply chain transparency and transformation, sustainable business models and procurement primarily incentivised around social value have the potential to change the world for the better – and, more important, for those who are being exploited.

With at least 24 million people in forced labour across the globe, it’s time for action. The pharmaceutical industry rapidly developed the vaccines to combat Covid-19 in months and have demonstrated the power of companies – the power of capitalism – to respond to human needs, so why not for victims of forced labour exploitation?