The challenges of building ethical supply chains on a global scale

Article by Achilles

Nuanced, subtle and complex – how speakers described the challenges faced by businesses addressing ethical complexity within the supply chain at a recent Conference that we hosted in London on 20 November. At the event we brought together speakers to lead a discussion on how companies can work collaboratively to raise standards for business practices and build ethical supply chains.

For Katie Tamblin, our Head of Product and Pricing, the most interesting takeaway from the line-up of speakers was the ‘murkiness’ of some of the issues involved.

According to Katie, “it is widely accepted that companies need to identify and address any instances of Modern Slavery in their supply chains. But do they always know what they’re looking for?

“The term covers a very broad spectrum, and many aspects don’t grab the headlines. For example, being trapped in a role, not having full workers’ rights, being a victim of time-sheet fraud where workers are paid the wrong rates – it’s all too easy not to recognise that these are also instances of Modern Slavery that need to be understood and eradicated.”

Making difficult decisions
Katie also highlighted examples of moral dilemmas where the right ethical response can be hard to find. “We all agree that child labour is a bad thing,” she says. “So at first sight it’s clearly not right that 10 and 12-year-old siblings are running a farm in Africa. But what if their parents have died or left, and they have even younger brothers and sisters to look after? What are they meant to do then?

“That’s the precise quandary that one of our clients came across in their supply chain. They eventually decided the ethically right approach was to ensure that neighbouring farmers knew what was happening and were available to offer support when needed.”

Our Product Director Kevin Alexander, the host of the event, believes that some of these issues hinge on recognising the relative importance of different aspects of ethical behaviour. As Kevin said, “It’s all to do with the maturity curve. Businesses have been focused on eradicating bribery, corruption and fraud in their supply chains for several decades, and the majority now have internal measures in place to combat these.

“But we are further behind on the maturity curve regarding factors like carbon footprint and human trafficking, so fewer businesses have appropriate measures in place. And focusing on these areas now might be at the expense of others: for example, companies might be addressing carbon but failing to focus sufficiently on other environmental issues like their water footprint.”

Learn more about our ethical supply chain management solutions

Spotting the signs
Kevin also highlighted a number of circumstances that make some projects more open to Modern Slavery than others. “If the work is largely unskilled, if a supplier offers accommodation to workers, if they hold workers’ passports and other documentation, and if there is a high proportion of agency workers. These are all indications that there is a heightened risk of Modern Slavery and that you should look more closely at a supplier’s working practices.”

Katie is keen to emphasise that identifying issues should be seen as an opportunity to help suppliers improve, not a reason to cut ties with them. “As one of our conference speakers, Michael Vaudreuil of Verité, said, the key is to help buyers understand what to look for, to identify poor standards and then work in partnership with suppliers to improve.

“After all, as our Ambassador Shaun McCarthy of the Supply Chain Sustainability School pointed out, choosing not to work with a company reduces the available pool of suppliers and pushes up prices. Upskilling makes more commercial sense.”

Katie also highlights the fact that the UK is no more immune to supply chain risk than other parts of the world. “Shirley Goodrick of the Slave Free Alliance pointed out that it’s very easy for people in the developed world to think of Modern Slavery as something that happens elsewhere. In fact, in the UK, British nationals are more likely to be victims than other nationalities.” Kevin echoed this point, “With zero-hours contracts, workers’ rights legislation and high employment, the UK is a much riskier environment than many people think it is.”

The right tools for the right risks
Due to the complexity of the issues involved, buyers need a broad set of tools to help them manage the risk, Katie Tamblin believes. “Then they can use the right tool for the right risk, choosing from audit, data collection, risk analysis, education and monitoring.”

If you are keen to learn more about the Supply Chain Ethics conference and the important topics discussed there, you can download the slides here



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