Addressing Modern Slavery in Global Value Chains

Matthew Davis
Associate Professor in Organizational Psychology
Hinrich Voss
Professor of International Business

In 2015 the United Nations (UN) ratified 17 Sustainable Development Goals (SDGs). These were adopted by all UN Member States as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

These goals, or SDGs, reflect a shift in attitudes among the public, governments and many business leaders towards the responsibilities of corporations. Businesses are being encouraged, and are required, to tackle global challenges as part of a mission that goes beyond profit generation. Together with colleagues across the University, we have been exploring how businesses can engage with the SDGs, looking at the fashion industry in particular.

Out of the 17 SDGs, we have focussed on SDG8: ‘Decent Work and Economic Growth’. One of its objectives is the eradication of modern slavery, forced labour, human trafficking and child labour. Modern slavery is present in every country – both rich and developing – and continues to result in lost opportunities and suffering for the victims and their families.

While few businesses would intentionally set out to support such exploitation, their business practices can help to mask and sustain forms of modern slavery.

An important emphasis has been placed on SDGs that address economic development and that can be tackled in tandem. The elimination of modern slavery is an example of such. In order to support the 40m people in modern slavery and 152m children in child labour worldwide, enabling conditions of modern slavery such as poverty (SDG1), lack of education (SDG4), and inequalities (SDG10) need to be resolved. Alliance 8.7 is a global partnership committed to this by working with groups that focus on multiple SDGs to reduce vulnerabilities to modern slavery and child labour. This is complemented by countries legislating and requiring businesses to reveal what actions they have undertaken to identify and eliminate modern slavery.

The most prominent legislation has been the UK Modern Slavery Act 2015. The Act uses a very broad definition of modern slavery to prohibit all sorts of working and living conditions that curtail basic rights and liberties. These range from servitude, to bonded and forced labour, debt bondage, child labour and human trafficking.

Global value chains is a term used to describe the people and activities involved in the production of a good or service and its supply, distribution, and post-sales activities when activities must be coordinated across geographies. In the UK the National Crime Agency reported nearly 7,000 cases of potential victims in 2018; while the Walk Free Foundation’s estimate as many as 136,000. Because of the prevalence of modern slavery, global value chains are therefore vulnerable to being affected.

For the UK it has been estimated that US$18bn worth of imported goods have been manufactured using modern slavery. This is an estimate that refers to five product categories only: garments, electronics, fish, cocoa and rice, and would increase if the sectors considered were broadened. The data does already indicate, however, that forms of modern slavery are found in global value chains that are complex and fragmented (garments, electronics) and relatively shallow (rice). Most consumers would be shocked by the prevalence of modern slavery across so many products with which they come into contact.

The UK Modern Slavery Act attempts to address modern slavery uniformly across these varied global value chains by obligating any business that operates in the UK with an annual turnover of more than £36m to release an annual statement about the steps they have taken to identify and rectify the issue. This provision in the Act implies that businesses have good oversight not only of their complete supply chain, but also their business conduct, and can confidently identify cases of modern slavery when they encounter them.

We identified a lack of detail in modern slavery statements about specific actions taken. In particular, we found limited information about the nature and structure of company supply chains, suggesting that although the public and policymakers assume that businesses know who they are buying from, this is not always the case. Interviews that we conducted across fashion and textile supply chains indicate that the exact configuration of a firm’s global value chain is often not known to its participants and that even direct, or Tier 1, overseas suppliers are unware of UK legislation and its implications.

With our observations and recognising the breadth of SDGs that need to be tackled to eradicate modern slavery, businesses need to come together and participate in multi-stakeholder initiatives. Prominent examples of initiatives that support the collection and sharing of information about value chains include: the Open Apparel Registry, which allows easier tracking and monitoring beyond Tier 1 suppliers, and the Better Work programme of the International Labour Organization, which experiments with centralisation of auditing and monitoring of suppliers to share information about labour treatment and business conduct. Multi-stakeholder initiatives challenge businesses to be more open when they identify issues in their own value chains and to treat modern slavery, and other SDGs, as shared problems to be tackled, as opposed to points of competitive advantage or confidentiality.

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Research projects addressing modern slavery