Modern slave trade in fast fashion and electronics

Slavery in Supply Chains – A Modern Day Risk

The case of the 550 fishermen freed from slavery conditions in Indonesia (as reported on Procurious), highlights a wider issue of slavery in supply chains across the globe.

Modern slave trade in fast fashion and electronics

We might think that slavery is a thing of the past, or limited to the developing world, but increasingly that’s not the case. A few weeks back, Procurious highlighted the issue of apparent ‘sweatshop’ conditions here in the UK in the fashion industry, where workers with poor English skills are being paid less than half of the minimum wage to produce garments for high street stores.

Not many people realise that the clothes they wear, the mobile phone they use and the food they eat can often come from supply chains where there are conditions of slavery or forced labour. And as demand for products grows, along with the expectation of paying lower prices on the high street, these incidence of these conditions is increasing.

Slavery Bill

The issue of modern day slavery is being given focus at the highest level of government in the UK. The Modern Day Slavery Bill is currently being debated in the UK parliament and is aimed at forcing large companies to disclose the actions they have taken to ensure that their supply chains are free from slavery, trafficking and child and forced labour.

However, there are criticisms that the bill doesn’t cover everything it needs to. According to an article in The Guardian newspaper at the end of March, the current wording of the bill only requires the large companies to report on supply chains which have parts in the UK, or where products are brought back to the UK for sale.

This omission potentially renders the bill powerless to stop UK-based companies profiting from slavery in overseas supply chains, particularly where there are wholly owned subsidiaries in other countries. There are also criticisms over a lack of consistency in reporting, as firms will not be told what to include, as well as how this law would be enforced.

Individual Responsibility

While it will be interesting to watch the debate on the new bill in the UK, particularly as the General Election approaches, there is also an argument for individual and organisational responsibility.

According to CIPS, businesses can take three basic actions to combat slavery in their supply chains:

  1. Understanding and commitment – know what modern day slavery is and commit to taking a proactive role to end it.
  2. Leadership on auditing – engage in rigorous audits of supply chains.
  3. Accountability – be accountable for business relationships and work to eliminate vulnerabilities in supply chains.

As Procurement professionals, we have the ability to influence what is happening in this particular area through our interactions with supply chains and second and third tier suppliers.

  • Putting into place POLICIES to prevent, detect and eradicate modern slavery within their own operations
  • Establishing PROCESSES to identify vulnerabilities
  • PLANNING for situations where corrective action is needed

Supply Chain Risk

So why are we focusing on this? At the Big Ideas Summit on April 30, some of the leading procurement influencers will be discussing Risk and what the ‘blind spots’ are for the profession. In looking ahead towards 2030 and beyond, it’s worth considering that that modern day slavery could still be something that is present in supply chains and something that organisations will have to deal with.

Is this a risk that can be mitigated? Can it be passed on to someone else? From our point of view as procurement professionals, the answer to both of these questions has to be ‘no’. The only way to look at and tackle a risk like slavery is to meet it head on. And this can come down to taking responsibility at a personal and organisational level.

Next time you’re in the shops, think about where that t-shirt was made or where that coffee came from. When you’re dealing with suppliers, do you know what their suppliers are doing? What are the policies you have in place and are you collaborating with suppliers closely enough?

This won’t be solved overnight, but if each individual takes responsibility, then it can be beaten in time.

Have you got any thoughts on supply chain risk and modern day slavery? Why not pose a question to our experts at the Big Ideas Summit on this and see what they think? Get involved at www.bigideassummit.com, join the Procurious Group, or add to the conversation on social media using the hashtag #BigIdeas2015.

In the meantime, here are some of the top stories making the headlines in procurement this week.

Fashion brands make positive strides towards detoxing supply chains 

  • In an update of its Detox Catwalk campaign, which charts the progress by 18 companies, Greenpeace East Asia has listed their achievements and commitments over the past four years.
  • The companies represent 10 per cent of the $1.7 trillion dollar apparel and footwear industry, the environmental campaign group said. Brands including Adidas, Benetton and Limited Brands, the parent company of Victoria’s Secret, were praised for ensuring data on hazardous chemicals in their supply chains is published on the global online platform IPE.
  • C&A and H&M are among brands that have eliminated PFCs, while Levi Strauss, Mango, and Marks and Spencer are among fashion companies working towards the elimination of APEOs and phthalates in their supply chain.
  • However, Nike and Li-Ning were criticised for not doing enough to ‘detox’.

Read more at Supply Management

Is this the biggest threat to Alibaba?

  • JD.com, China’s largest online direct sales company, is set to be the new challenger to ecommerce giant Alibaba. It has announced UNIQLO as the newest international brand to partner with the company by opening a flagship store on its marketplace platform, enhancing its reputation further within the industry.
  • The new UNIQLO flagship store is part of JD.com’s industry-leading marketplace, which is increasingly becoming the platform of choice for both domestic and internationally renowned brands and manufacturers seeking to reach the company’s massive base of active Chinese shoppers. The addition of UNIQLO adds to JD.com’s growing reputation as the go-to destination for shoppers looking for authentic, high-quality goods in a broad and growing range of categories.
  • UNIQLO will also become the first international clothing brand on JD.com’s marketplace platform to warehouse its merchandise in the company’s facilities. By using JD.com’s complete logistics solution, UNIQLO is enabling customers in eligible areas to take advantage of JD.com’s unparalleled same- and next-day delivery service.
  • JD.com is the largest online direct sales company in China. The company operates 7 fulfilment centres and a total of 123 warehouses in 40 cities, and in total 3,210 delivery stations and pickup stations in 1,862 counties and districts across China, staffed by its own employees. The Company provided same-day delivery in 134 counties and districts under its 211 program and next-day delivery in another 866 counties and districts across China as of December 31, 2014.

Read more at Supply Chain Digital

Bulgaria among Top 10 in EU by Transparency in Public Procurement

  • Bulgaria is among the top 10 in the EU by transparency in public procurement and among the top 5 by electronization of the process, according to Economy Minister Bozhidar Lukarski.
  • Citing statistics of the Sofia-based office of the European Commission, Lukarski noted that Bulgaria was among the top 10 in the EU by transparency in public procurement and among the top 5 by electronization of the process.
  • Lukarski vowed that e-public procurement would be universally available in the EU by 2020.
  • He expressed satisfaction that the European Commission had backed the attempts of Bulgaria to boost the development of the country’s northwestern region, the poorest region in the EU.

Read more at Novinite.com

Basware buys UK’s e-procurement network Procserve

  • Basware, a provider of P2P, e-invoicing and network connectivity solutions (and now trade financing as well), said the deal with public sector e-procurement vendor Procserve “significantly strengthens Basware’s position in the public sector, combining Procserve’s UK government experience with Basware’s established global expertise in purchase-to-pay and e-invoicing.”
  • Spend Matters offered their thoughts on the acquisition, saying: ‘It is smart for Basware to use its appreciating currency and balance sheet to acquire volume, but also to purchase technology that could potentially be used elsewhere in its solution portfolio (outside of just targeted efforts in the UK public sector).
  • ‘On a comparative basis, Basware has continued to struggle to date on the e-procurement side of P2P, and while Procserve has focused on the UK public sector, there might be elements of the solution that architecturally and on the product-level could improve Basware’s overall capabilities to more effectively compete against providers like Coupa, Ariba, SAP and Oracle on a global footing for integrated P2P deals.’

Read more on Spend Matters UK