Modern slavery ‘lowest priority’ as commercial pressure rises, says report

Supply chain managers regard modern slavery in supply chains as increasingly important, yet a worrying 40% ranked it as their lowest priority in a recent survey

The study, Implications of Covid-19 for modern slavery challenges in supply chain management, was carried out by the Modern Slavery and Human Rights Policy and Evidence Centre, and funded by the UK Arts and Humanities Research Council. 

Only 14% of respondents listed reporting modern slavery as a top priority.

Also, just 4% of respondents said responsibility for due diligence assessments for modern slavery risk lay wholly with their firm, while 7% thought such responsibility rested mainly within their firm. And around half of those surveyed believed their companies and suppliers were equally responsible for conducting due diligence assessments. 

Senior managers in larger firms placed modern slavery as a slightly higher priority than respondents as a whole, indicating that the importance of the issue may be recognised at the top level of an organisation, but not necessarily always filter down through teams.

While modern slavery reporting had increased in importance for 32% of those surveyed, 16% had given the issue lower priority.

In contrast, securing competitive pricing was described as the top concern by 32% of participants, while 29% cited their main concern to be ensuring consistent quality. 

And around half (49%) of respondents identified regulatory compliance as a driver for supply chain visibility, with 41% citing the firm’s reputation. In this context, 28% cited modern slavery as a driver. 

Authors described this finding as “concerning”, but said it also suggested managers are not associating modern slavery risk management with compliance and reputational risk management. 

Researchers from Liverpool and Nottingham universities took a two-pronged approach to the report, surveying 489 senior supply chain managers in April 2021 and conducting focus groups with policy-makers, expert practitioners and influencers.

All the managers surveyed worked in firms falling under Modern Slavery Act reporting obligations, and all worked in positions “most crucial to the management of modern slavery risks in supply chains”.

Companies’ attempts to deal with Covid-19-related economic fallout, such as work-from-home directives, staff furloughing and restrictions on travel might have affected their abilities to deal with social issues.

And factors such as the government’s temporary relaxation of section 54 reporting requirements – where companies must publish an annual slavery and trafficking statement – may have sent “unintended signals” related to the prioritisation of modern slavery during the pandemic, the report said.

The pandemic also led to decreased scrutiny of suppliers and to new suppliers being taken on in expedited processes.

One of the senior procurement leaders interviewed for the focus groups said they had heard of “quite a few” companies that had been forced to change business priorities during the pandemic.

Human rights concerns such as modern slavery and environmental concerns had taken a back seat as a result. Other focus group interviewees spoke of companies “just having to keep the ship afloat”.

Respondents twice as often cited Covid-19-related operational issues as being the driver for increasing supply chain visibility compared to ethical risks.

Survey results indicated that managers see few benefits from investing in modern slavery initiatives in their supply chains, and regard such spending as a cost rather than an investment, the authors said.

However, these firms said legislative changes mandating further reporting would guarantee they would not put themselves at a competitive disadvantage compared to rivals if they were to invest more in this area.