According to new research from Gartner, supply chain visibility alone is not enough to identify and mitigate forced labour of adults and children.
Only half of the sustainable procurement leaders who were surveyed said they are making effective progress in addressing modern slavery risk, despite seventy-one percent considering it a key priority.
The report suggests that CPOs must take a series of ongoing, proactive actions to mitigate and remediate forced labour being used within their organisations’ supply chains.
“Modern slavery is a risk to almost all supply chains,” said Laura Rainier, senior director analyst in Gartner’s Supply Chain Practice.
“It’s also one of the most challenging risks CPOs have to address; rooting out the practice requires visibility into multiple tiers of suppliers and a willingness to address issues in areas of the supply chain that traditional due diligence processes often fail to reach.”
The report is based on a global survey conducted by Gartner in May 2023, which quizzed 104 procurement leaders who had recently participated in a sustainability initiative on their organisations’ progress in addressing modern slavery risk.
Gartner states that additional client conversations have indicated that procurement leaders often struggle after investing in supplier visibility and related technology initiatives, constrained from making further progress on the issue due to a lack of resources, strategy or capability.
“Procurement leaders who have made progress on multi-tier supplier visibility should feel encouraged as accomplishing this step alone can be an overwhelming task,” continued Rainier.
“Once a baseline of visibility is achieved, however, procurement leaders need to embrace the ongoing work that is required to accurately monitor and mitigate the risks associated with the use of forced labour in global supply chains.”
To address modern slavery risk, Gartner recommends that CPOs start with a focus on building greater visibility into their supply chains, including prioritising the Tier-2 and Tier-3 supplier relationships most at risk via geography or commodity source.
Rainier says that achieving data visibility among these suppliers requires “a mix of incentives and contractual obligations”, and that technology will play a critical role in enabling the ability to map supply chain visibility.
Additionally, Gartner provides a series of actions that CPOs should take to mitigate and remediate modern slavery risks beyond improving supplier visibility, including five key steps:
Set and cascade policies: Ensure expectations around forced labour and modern slavery are clearly outlined in the supplier code of conduct. Suppliers must understand the nature and importance of the risk and how to comply. Suppliers must also cascade the supplier code of conduct and related policies around modern slavery to their suppliers
Conduct supplier training: Ensure that suppliers are aware of policies, especially when they go beyond the legal requirements. Support suppliers to identify risk factors, and train them to conduct due diligence on their recruitment agencies and upstream suppliers
Assess suppliers: Traditional supplier assessments often miss risks associated with forced labour. Mechanisms must be put in place to verify that local site auditors speak the language of workers. Additional, non-traditional assessments should be contemplated with high-risk markets or commodities
Remedy issues: When issues are uncovered in audits, it is critical organisations are ready to respond. Forging partnerships ahead of time, including with specific membership organisations focused on modern slavery, can help ensure best practices are followed in providing remedy or mitigating risk factors. Remedies should address the root cause of the issue and consider whether earlier steps in the plan, such as ensuring policies set for suppliers, are being adhered to
Embed risk mitigation throughout the supplier lifecycle: Starting with supplier selection and onboarding, embed modern slavery risk mitigation into the supplier life cycle beginning with the RFP process, through supplier onboarding, contracts, scorecards and remediation policies
