Every business has suppliers that are high risk for modern slavery in their supply chain – even if that risk is deep within their supply chains. Some businesses, however, need to manage known, inherent modern slavery risk in their supply chains. These high risk suppliers are often located in high risk locations and undertake high risk activities utilising a low skilled workforce.
An increasing number of businesses that work in industries with high rates of modern slavery are being required to publish modern slavery and human rights statements. These statements are becoming increasingly sophisticated, to align with expectations of customers, investors and other stakeholders. One of the key differentiators in these statements is the maturity of the response to risks of impacts to human rights, including modern slavery. Developing a human rights impact or modern slavery risk mitigation programstarts with a risk assessment of your business and supply chain.
With your risk assessment underway, what should you do if you uncover questionable practices or modern slavery as part of the process? How can you tell if the actions you’re taking are really working?
Both are challenging. The key is to plan ahead and put the appropriate systems in place.
Plan Your Response
When assessing potential risks in your business and supply chain, you may end up identifying actual cases of modern slavery. What should you do? Establishing a high-level policy to cover this will allow you to respond in a calm, considerate way.
The policy should include who should be told, who should lead the response, and how the communications, both internal and external, should be managed. Bad news travels fast and you should assume that the media will hear about your supply chain problems sooner or later, so having a plan and a draft statement can help enormously.
A policy is ineffective unless it is shared and understood by the relevant parties within your business. Training is also a good idea so that everyone knows the procedure to follow if modern slavery is identified.
Prioritize Victim Safety
After you’ve assessed modern slavery within your organisation, your priority should be to address any harm that may have been done while keeping the victim or victims safe.
Every situation is unique and you’ll need to assess the most appropriate course of action based on what you find, but don’t be afraid to get expert advice if you need it. If your organization has caused or contributed to the violation, taking steps to address it is paramount.
If the issue has occurred within your first tier supply chain, consider whether it is possible to engage with the supplier concerned to assess the impact and their willingness to address the root cause. Even if they agree to take action, you’ll need to monitor them closely to ensure that sufficient change has been made for you to maintain a relationship with them.
Monitor and Measure
Now that you’ve taken steps to identify and address the risks of modern slavery, how can you ascertain if your strategies are actually working? This is something you’ll need to be able to communicate in your Australian modern slavery statement, which requires reporting entities to describe how they’re assessing the effectiveness of their actions. Similarly, the UK government has announced that mandatory reporting criteria will also be imposed upon larger businesses carrying on business in the UK.
Finding meaningful ways to evaluate your progress can be challenging and requires careful thought. One approach is to set a KPI for each control you’ve put in place. That might be the number of supplier audits or on-site visits you’ve carried out, the number of supplier training sessions completed, or the results of supplier due diligence questionnaires, which you could compare year-on-year. If you are issuing questionnaires to suppliers annually, you can compare responses as part of your effectiveness assessment.
If a strategy you’ve adopted is making a tangible difference, your statement is an opportunity to highlight it. Equally, if a strategy hasn’t been as effective as you’d hoped, your statement is the place to explain any lessons learned and what you’re doing to change or replace it. This is all part of demonstrating that your risk program is living, breathing, and evolving.
Engaging with your internal stakeholders as well as your suppliers and asking for their periodic feedback on strategies, policies, and training programs can also help you measure success. It’s a chance to find out what’s working and what isn’t and to gather new ideas. This all helps to ensure that your risk program stays current, relevant, and is as effective as it can be.
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