Upholding Human Rights in the Supply Chain

By Sue Doerfler

Human rights violations and forced labor practices are a critical concern for supply management professionals and other organizations. Modern slavery impacts more than 40,000 people around the world — one in four are children — and a majority work in the private sector, according to the International Labor Organization, a United Nations (UN) agency.

The topics have dominated recent news:

  • A coalition of 180 human rights organizations claims that major fashion brands source cotton and yarn from the Xinjiang region are “complicit” in the forced labor of the Uyghurs, according to articles published by The Hill and The Guardian. The groups are calling for companies to cut ties.
  • An US$800,000 shipment of wigs and other human-hair products was seized; the items were suspected to have been made by forced labor, according to a report by Axios.
  • Claiming human rights abuses, the U.S. has sanctioned some Chinese goods and has restricted some Chinese companies from buying American technology, a CNN article states.

Through its 17 Sustainable Development Goals, the UN is seeking to achieve a better and more sustainable future by 2030. Goal 8 — Decent Work and Economic Growth — includes a section on modern slavery, Target 8.7, which states, “Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms.”

In Human Trafficking: The Private Economy’s Plague on Humanity, a January 2018 article in Forward Scan, an e-newsletter formerly published by Institute for Supply Management® (ISM®), author Adriana Sanford, J.D., dual LL.M., states that several factors can make organizations more vulnerable to forced labor: “(1) relying on the labor of migrant workers through labor agencies or brokers, (2) structuring supply chains with multiple tiers, with levels not within the company’s immediate control, and (3) doing business in countries with inadequate laws and regulations or weak enforcement.”

Other considerations and situations that increase the likelihood of forced labor, Sanford writes, include:

  • Orders that are beyond a supplier’s capacity that lead the supplier to subcontract out work
  • Subcontracting, in which it’s more difficult to monitor labor practices
  • “Negotiating prices so low that suppliers are forced to push down the price paid for materials, which creates a knock-on effect on those involved in the production of raw materials.”

“Companies look to their supply management teams to ensure that human rights issues in the supply chain are assessed, addressed and monitored,” says Nora Neibergall, CPSM, CPSD, C.P.M., ISM Senior Vice President and Corporate Secretary. “Having a strong organizational commitment, including a formal human rights policy, creates the necessary foundation, but this must be accompanied by practical action plans and monitoring systems.” ISM’s Principles of Sustainability and Social Responsibility is a good place to start, she says.

The ninth principle, Labor Practices, states that the responsibilities of supply management professionals are to “not discriminate with respect to occupation or employment. Communicate organizational labor rights policies and expectations to suppliers and throughout the supply chain. Be vigilant as to possible labor rights violations. Implement appropriate organizational policies and procedures upon learning of suspected violation.”

Establishing a human rights corporate or supply management policy can help a company (1) establish a foundation of respecting human rights and (2) identify risk and where improvement is needed, ISM’s Human Rights Policies for Supply Management states. Such a policy can also enable companies respond to customer expectations and create positive brand recognition — as well as build trust with employees, stakeholders and others.

Once a company has a policy, it should map its supply chains, identify high-risk suppliers, create action plans where needed and continue to monitor, among other actions. The next steps, Neibergall says, also will likely involve cross-functional work within the organization and the supply base.

About the Author

Sue Doerfler

About the Author

As Senior Writer for Inside Supply Management® magazine, I cover topics, trends and issues relating to supply chain management.