Companies will need a “new toolbox” to address the supply chain challenges posed by modern slavery, migration and traceability, a report has concluded.
Verisk Maplecroft’s Human Rights Outlook 2016 identifies the recruitment of migrants and refugees into forced labour, a lack of information on labour practices within the supply chain and inadequate oversight of suppliers as the biggest threats to brand reputation.
The report said new mandatory reporting requirements, such as the UK Modern Slavery Act, and increasing public scrutiny of supply chains had put more emphasis on responsible procurement practices.
The tracing of metals and minerals supply chains, particularly around tin, tungsten and tantalum, is particularly important for the IT and manufacturing sectors, who are “highly exposed to association with slavery practices and child labour”, said the report.
“One of the key messages flagged in the outlook is that companies are now held ultimately responsible for all workers who contribute to the commodities they use in their end-products,” said the report.
“A new toolbox will be needed if companies are to successfully identify, manage and mitigate human rights risks across global supply chains.
“By adopting innovative approaches, such as empowering workers through real-time mobile phone surveys, human rights training and long-term partnerships to reward ethical suppliers, businesses can also establish leadership on the issue and reap dividends in relation to brand equity and ultimate business performance.”
Alexandra Channer, principle human rights analyst at Verisk Maplecroft, said: “The risks for business are amplified by increasing public scrutiny of unmapped tiers of the supply chain and benchmarking of company human rights performance.
“Damage to hard earned brand equity, consumer backlash, and divestment by ethically focused investors pose real threats to companies who are found to be knowingly or unknowingly complicit in abuses.”
Verisk Maplecroft’s top 10 human rights risks in 2016:
1. Labour brokers and ethical recruitment
2. Achieving traceability in supply chains
3. Moving beyond audits to increase supply chain responsibility
4. Mandatory reporting to enhance supply chain transparency
5. Migration and preventing forced labour in European supply chains
6. The national living wage
7. Working conditions
8. Managing the impact of the commodity downturn
9. Gender discrimination
10. Integrating human rights into policies addressing climate change