Today, an estimated 24.9 million people around the world are victims of forced labor, generating $150 billion in illegal profits in the private economy.1

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In the wake of forced
labor abuse revelations in
global supply chains, companies
are increasingly expected by
consumers, investors, media, and
governments to maintain
transparent and responsible
supply chains.

KNOW YOUR SUBCONTRACTORS

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graphchart

In the wake of forced
labor abuse revelations in
global supply chains, companies
are increasingly expected by
consumers, investors, media, and
governments to maintain
transparent and responsible
supply chains.

In the wake of forced labor abuse revelations in global supply chains, companies are increasingly expected by consumers, investors, media, and governments to maintain transparent and responsible supply chains.

Goods are sourced and produced far from where they are bought, successively changing hands along complex and opaque global supply chains. The outsourcing of production often creates an environment in which there is little insight into the conditions under which people labor. Migrant workers are particularly vulnerable to exploitation as they work away from their support systems, in foreign countries where they don’t speak the language, and often cut-off from society. Over the years, poor working conditions and instances of forced labor have been well documented by human rights organizations and the media. As public awareness and legal obligations grow, companies can no longer ignore the issue.

Without effective policies and practices to prevent and mitigate risks, companies may unknowingly continue to be linked to forced labor, trafficking, or other severe labor abuses through their direct and indirect suppliers.

A responsible supply
chain management
can be a
differentiator.

A BUSINESS RISK

Responsible supply
chain management
can be a
differentiator.

Responsible supply
chain management can be a differentiator.

Laws and regulations in the U.S. and the U.K. now require companies to disclose their efforts to eradicate forced labor within their supply chains. Worldwide, other transparency measures are gaining momentum. However, forced labor is not just a legal or ethical concern; it’s also a business risk. Companies are under mounting pressure from investors, consumers, media, and governments to maintain responsible and transparent supply chains.

Companies with responsible supply chain practices not only protect vulnerable workers, but they also guard against legal, reputational, and financial risks. The more companies proactively engage in responsible supply chain management, the better equipped they will be to respond when a disruption occurs. Those that do not could face financial and legal risks, in addition to the tarnished perception of their brand.

1 International Labour Organization: http://www.ilo.org/global/topics/forced-labour/lang–en/index.htm

BUILDING RESPONSIBLE SUPPLY CHAINS

Companies and investors can be a powerful force in changing the conditions under which people labor in their global supply chains. At KnowTheChain, we are committed to helping companies make an impact in their fight to eradicate forced labor.

Recognizing that forced labor impacts a variety of industries and corporate supply chains around the world is an important first step. Our benchmarks aim to give companies a sense of how they are performing on this issue compared to their competitors and to highlight good practices.

Addressing forced labor in corporate global supply chains is difficult and complex, particularly deeper down the supply chain. Often the systemic abuses are endemic to an entire industry or region and require a collective response. Multi-stakeholder associations and industry associations are increasingly playing an important role in bringing companies together to collaborate on initiatives focused on improving labor standards that a single company cannot address alone.

New technologies are being developed that help workers use their collective voice, while innovative recruitment models that help minimize risks associated with hiring practices are gaining traction. Encouraging the development and use of such resources and tools will help companies on this journey.

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