Comment: Modern slavery: effective risk mitigation
Companies need to address the risks of modern slavery in their own operations and supply chains effectively in order to meet the requirements of the Modern Slavery Act. However, having read many of the statements published so far, I am struck again and again by the same issue: many companies appear to have put mitigations in place without first having taken the time to understand the nature of the risk. I can understand the desire to look proactive but there is a danger that such an approach makes no difference at all and, in some cases, may even make things worse. In addition, many of these so-called mitigations may simply waste valuable resources, in terms of both time and money.
For example, if a company expends all its efforts ensuring identification documents are not retained, it may miss those people working in conditions of debt bondage. Or it may assume that the major modern slavery impacts related to its business are forced labour when instead it is sex trafficking.
The UN Guiding Principles on Business and Human Rights place a responsibility on companies to carry out human rights due diligence. This includes identifying and understanding the risks of adverse human rights impacts and then remediating those that have occurred and putting measures in place to prevent others from materialising. The same principle should apply to modern slavery, an adverse human rights impact. However, slavery is often hidden and hard to uncover. Many companies, not knowing where to start but wishing to demonstrate their commitment, have described large scale blanket measures, from increased supplier auditing to improved ‘right to work’ checks. However, very few have explained what risks they hope to address with these measures, suggesting that the majority do not know.
Modern slavery manifests in a whole range of different ways. Those affected may be migrants; they may be underage; they may work in a low-skilled and highly competitive industry; or they may come from a culture where it is normal to pay very high sums in order to get a job in the first place. To address risks effectively, it is first essential to understand the nature of that risk: Is slavery endemic to a particular industry? Or is the risk more likely to be of a rogue factory or supplier? Is the risk the same in every country or are there some areas where local patronage customs give bonded labour a different flavour altogether?
In order to put in place effective risk mitigation, companies are better off investing the money that might have gone on a greater number of audits or expensive supplier vetting into detailed research of a particular area – whether a supply chain, a country of operations or a particular business activity – in order to understand whether the risk exists and if so, who is at risk, how and why. This is exactly what a human rights impact assessment is designed to do, bringing a fresh perspective to operations and exploring human rights issues from the perspective of affected groups.
By looking deeper in particular areas or targeting specific activities, rather than attempting a more general set of mitigations, companies will build their own understanding of operations and supply chains. It will not be possible to look at every area straightaway but there are sensible ways to develop a roadmap and to work step by step. Using the right starting point is essential if the business is going to invest scarce resources wisely, get value for money and tackle modern slavery successfully.