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Learning Supply chain management Sustainability and ethics

Breaking the chain: combating modern slavery in the supply chain

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Peter Jones, Managing Director and Founder of Prological, runs through the risk of modern slavery and offers his advice on how you can eradicate slavery in your supply chain.

The latest figures published by the UN’s International Labour Organization (ILO) and the Walk Free Foundation reveal that an estimated 40.3 million people around the world live in some form of modern slavery. That’s an astonishing one in 200 people.

More than half of the 40.3 million victims are in forced labour, meaning they are working against their will and under threat of punishment.

Unfortunately, supply chains are extremely vulnerable to modern slavery. Why is this so?

When developing a supply chain strategy, there are three critical metrics that come into conflict and ultimately cause tension with each other.

Businesses often find themselves in the difficult position of having to choose their compromise within these three elements.

These three elements are:

1. Commercial

If a supply chain is not commercially viable for a business, then there simply is no business.

2. Sustainable

A supply chain must be sustainable for long-term and financial growth.

3. Ethical

Organisations have a duty to ensure that they do not come into or get involved in master servant relationships.

Sadly, over time and in more recent decades, these three elements have become increasingly out of balance with each other. For many businesses, the commercial element has become so powerful that the sustainability and ethical factors have, at worst, fallen by the wayside. While for others, there is an intent to rebalance these elements, but this has become increasing challenging deliver on.

However, it’s not all doom and gloom. Businesses are starting to become more aware of this issue as they recognise neglect of the ethical and sustainable elements can bring serious risk to the commercial elements of the business.

What does this mean for supply chain?

Many organisations we speak to are driven to eradicate modern slavery in their supply chain. But they don’t know where to start.

During COVID-19, shortages around toilet paper and other essential goods were largely due to a lack of knowledge and visibility of second, third and fourth tier suppliers. This has caused many businesses to carry out a full analysis of their supply chains.

Organisations found themselves without the knowledge or data they needed to be responsive to shortages and challenges because they simply did not know what was happening further down in their supply chains.

To combat modern slavery, you need to understand where the risks in your supply chain lie. This can be tough if you have a factory in Africa, Europe or Asia – how do you go about finding the facts and then what do you do when you have them?

This is where supply chain mapping comes in. Supply chain mapping is the process of documenting information across companies, suppliers, and individuals who are involved in your supply chain and creating a global map of their network.

Once you’ve done the hard work and developed a supply chain map, you can set an agenda and explore risks and opportunities and establish an action plan. This not only helps with combating modern slavery, but also presents opportunities for sustainable and commercial improvements.

What can you do to combat modern slavery in your organisation?

The Commonwealth Modern Slavery Act 2018 came into force on 1 January 2019. The Act requires entities based, or operating, in Australia which have an annual consolidated revenue of more than $100 million, to report annually on the risks of modern slavery in their operations and supply chains, and actions to address those risks.

If this Act applies to you, where do you start?

A good place is on the Home Affairs website. Here you’ll find guidance, information and resources covering what is required from a reporting point of view.

However, there are no quick wins when it comes to combating modern slavery in the supply chain.

COVID-19 was a wakeup call that demonstrated managing supply chain from a distance created major risks in the long term. This warning has led to a heightened awareness and interest across business to better understand the intricacies of a supply chain.

As many organisations are making a start on their own supply chain mapping journey, now is the perfect time to include modern slavery elements to mitigate risk and introduce best practice to improve outcomes and help eradicate modern slavery.

At Prological, our expert team has extensive experience across the entire legislative and operational elements within the supply chain. We educate our clients in the value of good partnership to encourage continuous improvements and positive commercial outcomes. We help our clients bring the crucial three elements of a supply chain back in balance.

With this rebalance, we can play our part in eradicating modern slavery and help create a better world and a better way of doing business.

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