I have been actively involved in the challenge of identifying and defeating human trafficking for a large portion of my career. During the Obama administration, I was asked to sit on a Whitehouse taskforce on the trafficking of women and children and recently I was on a panel at the Anti-Human Trafficking Intelligence Initiative. I mention this not just because I have a long history in dealing with the topic, but I believe the fight against human trafficking is of paramount importance.
While there have been a significant number of articles written on human trafficking, many of them deal with the issues around sexual exploitation. While the topic of sexual exploitation gets a lot of focus, it only contributes to approximately 15% of all human trafficking worldwide. What most people don’t realize is that the remaining 85% of human trafficking is in the area of forced labor.
This forced labor affects nearly 50 million people worldwide and can take a variety of different forms, such as child labor, domestic servitude, extraction labor, agricultural labor, factory labor, fishing, and construction labor to name but a few. And while human trafficking cuts across a variety of sectors, I wanted to focus this blog on discussing the impact/effect on human trafficking in the global supply chain.
As a business executive it is important to recognize that among the many risks associated with a corrupt supply chain are issues of reputational damage, brand impact and ESG ratings. To a CEO these can be game changing in the trajectory of their company. One such example is Nike. In the 1990s, the sportswear giant was the target of damaging reports that its global supply chain was being supported by child labor in places like Cambodia and Pakistan. The reaction against Nike was so impactful that it not only negatively affected the company’s image but also their bottom line. A Stanford University research report stated, “Nike was being portrayed in the media as a company that was willing to exploit workers to sustain themselves in an effort to expand profits,” (Conway, 2019). In many ways given that this was in the 1990’s and before the explosion of social media, Nike likely dodged a reaction that today would have been much more devastating.
In today’s world of virality of news information and the brand impact it can carry, how does a CEO deal with supply chain integrity. Clearly there are the moral and ethical dilemmas, that challenge of balancing shareholder economic needs (think profits), with the societal impact of utilizing a corrupt supply chain. On one hand there is the fiduciary duty to return profits, on the other hand there is the moral imperative to act within the rule of law. All things equal, in fact all things unequal, CEO’s need to error on the side of do the right thing.
Most CEO’s want to do the right thing, and, in many instances, they are unaware of supply chain corruption or compromise. Also many are unaware of new regulations and laws like the Uyghur Forced Labor Prevention Act (Public Law No. 117-78), also known as the UFLPA, that prohibit the importation of goods into the United States manufactured wholly or in part with forced labor.
This is not typically an issue of turning a blind eye, but one of a lack of in-depth understanding of what is happening across their supply chain. Because we live in a global community a company’s supply chain can be distributed around the world and with that distribution comes the challenge of ensuring the integrity of a company’s values are consistent and maintained by each of their suppliers. Also, as the pressure of profits endures and as outsourcing to less expensive countries continue, keeping a view of your supply chain is critical.
Ok, doing the right thing is easy to say, but what does the Chief Executive need in order to do the right thing?
It has to be knowledge and that knowledge has to be current, data driven and multi-sourced. A CEO must have a knowledge of what and who are active in their supply chain, what relationships exist with their suppliers, who are their suppliers, supplier, and their relationships and what is known about them both publicly and privately. It is here that technology can play an important role.
At Siren our platform can provide deep analysis of the supply chain and help you monitor your existing suppliers and vet new ones. We can discover those hidden relationships, through open-source analysis we can help uncover supplier to supplier associations, help identify vulnerabilities and predict the likelihood of risk by providing a common operating picture from data shared between integrated communication, information management, intelligence and data sharing systems that monitor the ongoing components of the supply chain.
As Francis Bacon said, “Knowledge itself is power” by providing supply chain situation awareness the Executive team is armed with knowledge. That knowledge can help prevent reputational damage, provide brand protection, engage the company in the fight against human trafficking and ultimately help reduce risk. The challenge of Human trafficking is everyone’s fight and one where the utilization of technology can make all the difference.