🔎The Issue

Workers along supply chains, particularly in low-income countries, are especially vulnerable to physical and financial exploitation involving different forms of forced labour, human trafficking, physical violence and unsafe workplace conditions. Yet, labour exploitation in the form of slavery is surprisingly also widespread in the UK, where both UK nationals and people who are trafficked into the UK fall victim. The result is that business models are set up to gain profit from pushing workers into debt and financially taking advantage of them. This is enabled by insufficient labour standards that make it possible to take advantage of workers. These actions put workers at risk of further exploitation.

🏆 The Goals

1. Improve your SME’s policies to be aligned with fair treatment of workers along the supply chain in order to safeguard your SME’s operational practices and legal defence.

<aside> 💡 What does it mean in practice?

This means that companies with which your SME choose to do business can guarantee ethical and fair treatment in the workplace. This entails giving their employees a real living wage with decent working conditions, no wage deductions or other exploitative practices, and ensuring a safe work environment with no forced labour.

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💓 The Reason

Even if your SME is on top of providing fair working conditions with a living wage for your own employees, your SME has a significant influence on your suppliers’ decisions to embed fairer working conditions through engaging in dialogue while having the power to go to a more ethical supplier. However, a lack of transparency regarding suppliers’ operating standards can make it hard for SMEs to know how their suppliers treat their workers. Working with a supplier that mistreats their employees could put your SME at risk of criminal offence charges, which is why it is important to learn about your suppliers’ guidelines, policies, and reports of working conditions, to make an informed decision about continued partnership. Working with suppliers that have fair working conditions helps to prevent the exploitation of some of the world’s most vulnerable people.

🥇 **The Benefits

📰 Reputation

Clients, consumers, investors, and business partners are more attracted to businesses that have a strong track record of policies on ethical trade and actions against forced labour and exploitation of workers. This builds reputation and may attract new talent, potentially reducing recruitment costs.

📈 Working with large businesses

Larger businesses are required to comply with the Modern Slavery Act and demonstrate that their supply chains also comply. As such, SMEs that comply with the Act and that have transparent supply chains are more likely to work with larger businesses.

🫣 Future preparedness

Supporting efforts to reduce exploitation through setting a no-tolerance standard will protect and position your SME to easily adapt to stricter regulations in the future. Meanwhile, it will reduce the risk of facing a lawsuit from being involved in acts of human trafficking, slavery and forced labour under the Modern Slavery Act and will send a clear signal of your company’s values.

💹 The Measure

Consider the SME’s direct and indirect breaches of human rights either in-house or along the supply chain:

• Does your SME prioritise trading with suppliers that have visibility of their human rights commitment?
• Does your SME have mechanisms for reporting and recording suspicions and acts of labour abuse?
• Does your SME’s recruitment and employment policies safeguard against labour abuse (financial, physical and psychological)?
• Does your SME have any processes to improve or correct a harmful situation?
• Does your SME have any policies on due diligence?
• Does your SME have processes to review and assess labour abuse risk management at fixed intervals?
• Does your SME disclose information in an accurate and clear way to allow stakeholders to know and assess the impacts of your SME’s practices and involvement with labour abuse?

<aside> 💡 Did you know?

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There are currently no official targets set by local governing institutions as the topic is complex and, therefore, unsettled. However, there are guidelines on how each organisation can respond effectively in a way that best suits their size while acting with due diligence.

💪 **The Tasks

Policies, Assessments & Contracts

• [ ] Consider what human rights criteria your SME stands for and wants to adopt. Develop comprehensive policies to ensure that the SME’s ongoing decision-making processes align with its values and human rights criteria.
• [ ] Ensure that policies on human rights are made available to all workers.
• [ ] Regularly incorporate lessons learned into labour abuse risk management policies.
• [ ] Implement policies and procedures that allow employees to report concerns over modern slavery, human trafficking or other forms of forced labour in the business or supply chains. Be clear that an individual may not suffer any consequences for doing so.
• [ ] In contracts with suppliers, include concrete sections on your SME’s standpoint on forced labour and your stance on engagement with businesses that violate human rights.

One step further:

• [ ] Consider conducting a human rights impact assessment examining the company’s direct and indirect operations, supply chains and other business relationships. This will assist in identifying risk factors and areas of improvement in operations and supply chains.

Actions

• [ ] The CEO or Board to present a formal statement of commitment to operate by the UN’s Human Rights Act.
• [ ] Establish awareness training and a Code of Business Ethics that is to be a required part of the induction process. Equip workers with the skills to manage modern slavery risks in their professional responsibilities.
• [ ] While difficult, attempt to learn more about suppliers’ human rights performance to assist in transparency.
• [ ] Engage in dialogue with your suppliers to promote best practices in preventing, identifying and responding to modern slavery in the suppliers’ operations and supply chains. If your suppliers are resistant to eliminating their use of forced labour and poor working conditions, then consider finding another supplier.

Resources

Tackling Modern Slavery in Supply Chains

Beyond Compliance: Effective Reporting Under the Modern Slavery Act

BS 25700:2022 Organizational responses to modern slavery – Guidance | BSI

Ethical employment in supply chains: code of practice, guidance and training - Welsh Government