When it comes to supply chain slavery, there are companies that talk the talk, there are those that don’t talk at all, and there are those that walk the walk as well.
Yorkshire-based landscape manufacturer (it specialises in natural stone) Marshalls falls squarely into the latter camp. Because while this FTSE 250-listed company might not be a high street name, it’s putting many more recognisable brands to shame when it comes to tackling modern slavery in its supply chain.
It was one of the first organisations in the UK to publish its modern slavery statement, in line with the 2015 Modern Slavery Act, with its statement being lauded as a “best performer” by the Business & Human Rights Resource Centre. In 2017, it launched an Ethical Risk Index, giving customers transparency over the multidimensional ethical challenges – from modern slavery to environmental issues – in the supply chain for every stone it procures. The same year, it was the first company to be awarded BRE Global’s Ethical Labour Sourcing Standard Verification.
This year, it published its second annual Country Slavery Country Profiling, which identifies key areas of risk (for example, access to banking, gender equality and labour rights) for every country it sources from. And in June, it joined the Co-op’s Bright Futures scheme, which creates jobs for victims of modern slavery.
Supply Management visited Marshalls at its West Yorkshire HQ, meeting with a range of stakeholders from around the business to explore what makes the difference when fighting supply chain slavery.
A competitive advantage
“There are two ways of looking at the various pieces of legislation [around] sustainability,” believes group director of marketing and sustainability Chris Harrop. “You can view them as being another layer of bureaucracy and risk management that comes as an unwelcome addition to your daily workload. Or you can see them as business opportunities and sources of competitive advantage.” No prizes for guessing which box Marshalls ticks.
Consumers are demanding more transparency over where products come from and how they were produced, Harrop believes. “There’s a lot of nonsense about transparency,” he adds. “It’s not about telling everybody everything that’s in your supply chain. It’s about consumers wanting to know that you know.”
Mike Plaster, who manages Marshalls’ commercial natural stone portfolio and is a modern slavery ambassador, says giving customers the chance to compare different stone types via the Ethical Risk Index, helping them to make a more informed decision, is proving popular. “Our customers are being pressured to look at the ethics of their own procurement,” he says. “In the last couple of years, [our approach to] ethics has won us jobs and started conversations.”
Procurement can play a role in translating risks into opportunity, Harrop adds. “That changes the conversation from ‘let’s make sure we don’t get caught’ to ‘how can we turn this into a competitive advantage?’”
Go deep into your supply chain
Issues of resilience and transparency mean truly understanding your supply chain – and that it doesn’t end at a sourcing office in Beijing, says Harrop. “In our business, from a stone perspective, it’s going to be a hole in the ground. So, exactly what is happening there? Which factories is the stone going to? Is there sub-contraction in those factories? Right the way through to the supply chain in the UK, including what ship it’s come on; knowing the working conditions on that ship.”
With nearly 2,000 suppliers spread across about 40 countries, getting deep into the supply chain is a challenging – if rewarding – job for the central procurement team. “We are in a unique space to make a massive impact in awareness and positive action in the whole end-to-end supply chain,” says director of supply chain Richard Beale.
“We decided that because of these 2,000 touchpoints, we needed a conduit to get to the entire supply base, not just the high-risk suppliers,” he explains. The solution is the M-Way code of conduct – which spells out policies and guidelines – a large chunk of which are focused on modern slavery. This has been launched to all suppliers globally, from the largest multinationals to the smallest local businesses. The procurement team has also taken Marshalls’ modern slavery statement and turned it into an online training course, which has so far been completed by about 80% of the supply base.
The riskiest countries from a supply chain perspective are developing ones, where Marshalls sources a “huge amount” of stone. Beale and his team have mapped expenditure in India, China and Vietnam down three tiers – “manufacturing organisations down to quarries, down to suppliers into those quarries.” That mapping highlighted the areas of highest risk, and Marshalls is collaborating with non-profit Hope for Justice to perform awareness training and positive interventions on the ground.
With about 25 primary suppliers in developing countries, Marshalls used a combination of data and on-the-ground research to trace materials back to source. “We’ve seen it firsthand,” says Beale. “There’s always a possibility some material may get into that supply chain. I see it as a journey and we know almost everywhere our materials come from.”
The next step is to embed ethical sourcing, using the BRE Global Ethical Labour Standard, into the supplier management system, segmenting suppliers by how risky they are. Beale also plans to license the Standard, encouraging suppliers to use the tool to score themselves, funded by Marshalls. In time, doing so may become mandatory.
Put boots on the ground
Getting out into the field has been critical. “There’s no substitute for boots on the ground,” believes Harrop. But, he is clear: “That doesn’t mean having lots of people from Yorkshire turn up in China or Vietnam. It means having the right local people.”
Marshalls has invested here. It has an office in China, with eight members of staff, who spend the majority of their time in factories and quarries. In India – Marshalls’ largest area of spend is Indian sandstone – it employs a full time auditor who does nothing apart from visit the quarries the firm sources from, talking to managers and workers at second and third tier suppliers. “[Local staff] don’t talk with an MBA-qualified voice from the UK, they talk peer-to-peer,” says Harrop. This is crucial, he says, as when he, a British executive, visits, “I only see what I’m supposed to see.”
Having a presence in these countries helps in understanding the embedded socio-economic issues that are linked to slavery. For example, says Harrop, India has a problem with child labour. “It links back to interstate migration, poor wages and lack of banking facilities. The only person you can borrow from is your employer… driving bonded labour behaviour. If anything happens to the adult, the debt gets transferred to the child, and that translates to what you see on the ground.”
Find and fix
“There’s an unhelpful narrative in the mainstream media, where if slavery is found in the supply chain, it’s damning of the company,” says Harrop. “But the statistics are clear: virtually every business in the UK will touch slave labour at some point. Businesses should be going, finding and fixing. The nervousness is, if you find and fix, you are held up as having it and that’s worse than not looking in the first place. I try to be proud we have found seven incidents of modern slavery in the demand chain.”
There are, he says, three categories of businesses. “Corporate perpetrators, who know they are committing crimes for financial gain. Corporate witnesses, who have an inkling there are abuses in their supply chain but choose to turn a blind eye until the media catches them. Corporate victims, those businesses we need to encourage to find and fix.”
He uses the example of Vietnam. “When we first went to look, there was an issue with the use of prison labour. We had to do a lot of work with suppliers to persuade them not to use prison labour, which was being promoted by local government officials. [We had] to convince them it would be commercially beneficial to not use prison labour, by getting work from us.”
There’s no blueprint for responding to issues, says business and human rights lead Elaine Mitchel-Hill. “It depends on the context. We are looking at a multi-stakeholder programme in Vietnam. In India we did work at a grassroots level, but we’ve gone through a learning curve and are now more at the advocacy end. Experience has taught us while we can fund programmes on the ground, often they are not sustainable as you’re driving for systemic change.”
Mobilise your workforce
Responsibility for tackling modern slavery doesn’t end when Marshalls sells on its product. The demand chain is as important. “Supply chain is everything up to us; demand chain is everything to the end of that product’s useful life,” explains Harrop.
The demand chain for Marshalls’ products is high risk in the UK, involving construction for commercial clients and low skilled contractors laying paving and driveways for consumers. This is where the workforce can be used to great effect, as eyes and ears on the ground.
“Think about slave labour in construction,” says Harrop. “When are those potential slaves going to enter a construction site? 6.30am – not when all the site managers are there. Who else is going to be there at that time? Typically, one of our delivery drivers.”
Marshalls runs its own fleet, with 270 delivery vehicles performing about 350,000 deliveries per year. “It would be crazy to just look at the supplier side, given we have more touch points with logistics,” says Beale, who also runs that side of the business. “With our market share, we go to the majority of building sites across the country, which gives us a pretty unique position to highlight the issue on the ground nationwide.”
So, all logistics managers have been trained in spotting modern slavery, with Hope for Justice delivering a course. Within 24 hours of training, one potential case was highlighted, which is now being investigated. All 450 delivery drivers will have been trained by the end of the year. New fleet livery will have visible information, such as the Modern Slavery Helpline number. “All you need to do is make a call,” says Mitchel-Hill. “It’s about empowering people to do that.”
Marshalls currently has five modern slavery ambassadors across the business, including a category manager in procurement, who has delivered training programmes, again with Hope for Justice, to about 50 temporary labour agencies within the supply chain. “The ambassadors all do different things within the business,” says Mitchel-Hill. “It’s whatever is right for the role they hold.”
Dave Jessop is one modern slavery ambassador. In his day job he runs The Marshalls Register, a vetted contractors scheme. “It’s an area of vulnerability as it’s a low-skill, high-muscle job,” he says. Modern slavery is a commercial concern for contractors, as gangmasters using slavery are able to undercut them. “It’s taking the bread out of the mouths of these honest guys, trying to make a living,” says Jessop.
He strives to raise awareness across the contractor base, making them aware of the issue and the warning signs, feeding intelligence into agencies such as the GLAA. On the other side of the business, modern slavery ambassador Mike Plaster raises awareness among commercial clients, through events and initiatives like the Ethical Risk Index.
Focusing on the demand chain – and risk areas in the UK – is vital, says Mitchel-Hill. “The human rights piece started focusing on India, but the message had to be that this is as much a problem here in the UK as it is in India, China or Vietnam. This work is as important as anything we do on the ground overseas. Otherwise you do a great job overseas, and then get shot in the foot because of something here.”