At any one point in time, it’s estimated that 40 million people around the world are victims of human trafficking—nearly 75% of these victims are women and girls. This means they’ve been recruited, harbored, or transported into a situation of exploitation through the use of violence, deception, or coercion and forced to act against their will. Human trafficking is modern slavery. It’s a global crisis impacting us all.
While there are many forms of human trafficking, the vast majority of victims are exploited by criminal organizations for labor. This issue is especially prevalent in emerging markets such as South East Asia and Africa. Although no country is immune as it’s also found in developed countries, including the United States. Statistics from the International Labor Organization show that human trafficking is a $150 billion business globally.
And the truth is, many companies, maybe including your own, are unwittingly supporting human trafficking. In fact, according to ILO, an estimated 16 million people are in forced labor in the private economy. In the clothing and apparel sector, for example, a KnowTheChain report found that one Taiwanese factory held 82% of its workers’ passports. While in the tech field, a study found nearly a third of migrant workers in Malaysia’s electronics sector are in situations of forced labor.
The reality is that if you’re doing business in any field, forced labor is most likely embedded in the dark corners of your supply chain. It’s a shocking but inescapable fact.
Increased Awareness—Increased Action
The good news is the world’s waking up to these issues. Whereas once these crimes were largely overlooked by world governments, now more countries are putting laws in place to punish human traffickers. They’re also forcing businesses to take this issue seriously to prevent the use of human trafficking in the supply chain.
For example, the UK’s 2015 Modern Slavery Act requires large businesses to publish an annual statement. The statement must confirm the steps taken to ensure that slavery and human trafficking are not taking place in the business (or in any supply chain) or declare that no steps to confirm the existence of slavery or trafficking have been taken.
Australia recently launched similar legislation. While in the United States an updated Abolish Human Trafficking Act is headed to the President’s desk for signature into law to add more regulatory teeth to finding and prosecuting perpetrators of human trafficking.
While these are all fantastic first steps toward shedding light on human trafficking in the supply chain, they all do not include penalties for companies not complying with new standards.
But just because businesses are not punished for non-compliance, it doesn’t mean they should ignore these statutes. First and foremost, businesses have a moral and social obligation to ensure human trafficking doesn’t exist in their supply chain. And if that’s not enough, ignoring the issue also exposes the business to significant risks in the form of reputational damage. So if a business is caught supporting human trafficking in its supply chain, unwittingly or not, it will likely see its share price drop, sales shrink and face difficulties attracting talent in the future.
It’s encouraging then that most businesses recognize this is an issue they must tackle right away—over 10,000 UK businesses have made statements about ridding human trafficking from supply chains. The challenge is taking meaningful action. For example, a recent report from CORE finds that most companies in the UK are struggling to identify the risks in their supply chain, preventing them from taking any meaningful action.
A big reason for this is that few companies have visibility into their supply chains beyond tier one and two suppliers. In fact, research from GEODIS found only 6% of firms have complete visibility, meaning the vast majority are ignorant of what happens in their supply chains.
Ignorance isn’t bliss, however, and nor should it be an excuse. Driving supply chain visibility must be a business critical issue. And with modern technology it’s very possible. There are many independent and private companies that work to assess your supply chain. Two of which are Verité and FRDM. In fact, Tradeshift has partnered with FRDM to create an app to help businesses detect and mitigate human trafficking in global supply chains. The FRDM app is specifically designed to analyze purchase data, atomize risks, and protect corporate values while ensuring compliance with international regulations. This allows users to trace and monitor social risks at every level of their supply chain, from raw materials to finished goods.
The end’s not in sight, but it’s time to begin
Human trafficking continues to plague communities worldwide. It’s an issue that must be solved, and the best way of doing it is stopping the finance flows that support it. This won’t happen overnight, but businesses can start taking meaningful action right away to ensure that they’re not indirectly promoting human trafficking in their supply chain.
Hear from Justin Dillion, CEO & Co-founder at FRDM about what you can do to mitigate the risk of human trafficking happening in your supply chain in this exclusive interview.
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