[ACNS, by Gavin Drake] A leading Anglican mission agency is calling for companies to appoint an individual board member with responsibility for Corporate Social Responsibility (CSR) to ensure that the company – and its suppliers and partners – comply with human rights; particularly in the area of modern slavery and human trafficking.
The United Society (Us) has teamed up with Finance Against Trafficking, the Ecumenical Council for Corporate Responsibility (ECCR) and Rathbone Greenbank Investments to produce a report looking at the risks of human trafficking in the supply chains of FTSE 100 companies.
The FTSE 100 companies are the top 100 companies traded on the London Stock Exchange and have a combined value of £1,700 billion. Together, they account for 80 per cent of the market capitalisation of all listed UK companies.
Under new regulations introduced in the Modern Slavery Act 2015, such companies must now produce an annual statement setting out the steps it has taken to ensure that slavery and human trafficking is not taking place in any of its supply chains or in any part of its own business. Alternatively, the company can issue a statement saying that it has taken no such steps.
Such a statement can include information about the company’s policies in relation to slavery and human trafficking; and its due diligence in relation to slavery and human trafficking in its business and supply chains; together with its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains.
The statements will be publicly available and companies will have an obligation to publish them prominently on their websites.
The report produced by Us and its partners is intended to provide guidance to such companies. It includes information about the risks that such companies can face in unwittingly benefiting from slavery and trafficking. It also highlighted poor examples of company’s current reporting practices.
“Some companies made no mention of either forced labour or human trafficking as a potential risk nor detailed any actions or measures that would deal with it,” the report says. “Many of the companies mention human rights policies and their compliance with these policies, but often only in terms of equal opportunity or freedom of association. There is little disclosure or evaluation of human rights risks in their supply chains
“We found examples of businesses reporting on one aspect of their supply chain, whilst remaining silent on other aspects. For instance, a company may have paid close attention to just one out of a number of potentially high-risk commodities used to manufacture its products. Such instances show inconsistency and a lack of overall transparency in reporting which makes it difficult to assess the credibility of their disclosure.”
The report summarises a number of weaknesses found in relation to the reporting of human trafficking and forced labour risks within certain sectors. “For the companies in the textiles industry, no information was provided on how inclusion of forced labour prohibition within Codes of Conduct is being implemented. For companies sourcing seafood there was minimal disclosure of the risks and there was a comprehensive lack of company information on the issues.
“For companies with gold in their supply chain, whilst forced labour was mentioned in company policies, there was no specific mention of human trafficking risks. There was no mention of the risks within gold supply chains in banking sustainability reports. For companies in the travel & leisure industry, there was no mention of the risks that staff may not recognise trafficking operations on company premises nor the potential for third party agencies to exploit migrant workers.
“We found that risks that are prevalent on an industry-wide level tend to be dealt with in a more transparent way by companies within the industries (though this varies from company to company), with some information given on action that is being taken to address the risk. On the other hand, specific risks which can affect a company, for example a commodity to which the company has exposure, tend not to be addressed clearly within reporting, if at all.”
The 50-page report isn’t a catalogue of errors and contains numerous examples of best practice. In the Jewellery trade, it highlights the work undertaken by Tiffany & Co: “The company details the risk posed by ‘conflict diamonds’ in which diamonds are mined with proceeds used to finance conflict and war, which involve human rights abuses and exploitation.
“In 2014 the company claimed to have received 100% of its rough diamonds either directly from a known mine or from a supplier with multiple known mines. The company cuts and polishes the diamonds in-house, mostly in the location from which they are sourced, with strict policies on fair wages for employees and a focus on developing a skilled workforce with sustainable incomes which benefit the community as a whole.”
The Archbishop of Canterbury, Justin Welby, has welcomed the report. “Modern slavery is a scourge that grossly undermines the inherent and God-given dignity of the human, and we must work urgently to eradicate it from our world,” he said. “This report highlights that in our globalised economy, any business can be exposed to slavery through its supply chain.
“Companies that have conducted audits have been shocked to discover that they have been unwitting beneficiaries of slave labour. The transparency in supply chains measure in the Modern Slavery Act is a call to action that I urge British business to seize.”
His words were echoed by the Roman Catholic Cardinal Archbishop of Westminster, Monsignor Vincent Nichols: “Transparency in the supply chain and measures that prevent modern slavery and exploitation in business will help to change cultures to ensure that human dignity is protected in the workplace,” he said.
“The measurement of business success cannot be limited to profit margins. It has to be how we treat our fellow human being. The FTSE 100, having taken a clear position of respecting and protecting all workers linked to their supply chains, demonstrates how attitudes can change to create a better society, particularly for the poor and vulnerable who depend on their employers.”
Us partner churches have examples of people within their communities who have survived and escaped being trafficked, while many more continue to endure forms of slavery,” the mission agency’s director for global relations, Rachel Parry, said.
“It is easy to forget that we are all ‘investors’ in systems and businesses which can, through complex and distant supply chains, be connected to trafficking. This research considers how companies might be exposed to trafficking in their supply chains and suggests ways in which such risks can be managed and minimised.
“For those concerned about investing ethically, the report gives guidance on questions that investors could ask investment managers or companies regarding these risks. Companies need to improve their efforts to monitor and manage their supply chains. This report gives some practical guidance about how better to go about this.”
Bishop Michael Doe, chair of the ECCR, said: “In a recent survey, over 70 per cent said they would be unhappy if their money was invested in unethical business. That figure would be even higher if they found they were profiting from abusive labour practices and the treatment of people, including children, which amounts to present day slavery.
“All of us, and especially those of us who believe that every person is created equal with the right to a free and fulfilling life, need to know more and to act more decisively. That is what this report can help us to do.”
The report, “Forced Labour, Human Trafficking & The FTSE 100” can be downloaded from the WeAreUs website. (PDF)