Managing Risk - How Do I Ensure Labour Rights are Upheld in the Supply Chain?

CIPS 22 April 2020

Factory closures, order cancellations, workforce reductions and sudden changes to supply chain structures can disproportionately affect some workers and increase their risk of exposure to modern slavery and other forms of exploitation, such as non-payment of wages. This risk becomes higher when businesses fast-track agreements with new suppliers, as may be the case during the coronavirus pandemic. Guidance for firms produced by the Australian Border Force, which is responsible for implementing the country’s criminal justice response to modern slavery, says maintaining supplier relationships and fostering open communication about coronavirus risks is critical to minimise this risk.

Firms are advised to honour current contracts where possible and recognise that short production windows and last-minute or short-term orders increase slavery risks in the supply chain. While it is sensible to avoid varying contracts unreasonably or seeking discounts from suppliers, firms can pay for work completed and extend orders over time to help ensure ongoing cash flow for suppliers.

Greater visibility of working conditions can be gained by asking suppliers for information on steps they have taken to protect staff from Covid-19, such as providing them with protective equipment, providing sick or carer’s leave, and increasing cleaning in factories. To maintain good relationships, firms may seek ways to work with the supplier to support affected workers.

For business continuity, it is recommended to continue with existing supplier due diligence and remediation processes, and adjust these where necessary to ensure new risks linked to evolving supply chains are identified and addressed. Further, to collaborate with suppliers, workers, business peers, investors, civil society and trade bodies to identify best-practice approaches; and review key international resources and implement, where applicable, guidance to support decent work in supply chains.

Read more
Firms warned of coronavirus slavery risk (Supply Management)
Key risk areas to tackle slavery  (Supply Management)
Modern slavery information and resources (CIPS)

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