When clean reports hide dirty supply chains

Imagine you are a hospital in early 2021. The pandemic is raging. Your staff need gloves—millions of them. You have contracts in place. Audits have been carried out. Compliance certificates have been issued. Somewhere up the chain, a board of directors has reviewed a report and ticked the box.

Then the US government seizes your shipments.

That is exactly what happened when US Customs and Border Protection issued a formal import ban against Top Glove, one of the world’s largest disposable glove manufacturers, after finding evidence of forced labor: debt bondage, confiscated passports, and workers charged for their own accommodation. Hospitals scrambling for PPE during a pandemic surge suddenly faced empty shelves.

In a newly published paper, ‘What Healthcare Learned about Evidence and What Supply Chain Boards Still Miss’, Freedom United board directors, Kamil Gerard and Dr. Aparna Ahuja share how the crisis exposed:

how fragile paper-based assurance can be under pressure and how quickly a governance failure becomes an operational consequence.

The audits had looked clean. The exploitation had continued regardless.

How oversight fails workers

The problem is structural. Most companies rely on scheduled audits, supplier self-reporting, and compliance certificates. These tools are announced in advance, which means everyone knows the auditor is coming. Workers are briefed. By the time an auditor arrives, what gets inspected is the performance—not normal operating conditions.

Meanwhile, around 27.6 million people are trapped in forced labor globally, many in supply chains that companies confidently describe as “compliant.”

The evidence bears this out. Research by Verité, an independent labor standards organization, found that every Malaysian glove company that had charged workers illegal recruitment fees had previously maintained a formal “Zero Fees to Workers” policy—and passed audit reviews. The audits were not fraudulent. They were, as Ahmed and Ahuja put it,

structurally incapable of detecting what they were not designed to look for.

What actually works

There are models that break this pattern. The Fair Food Program, which began in Florida’s tomato fields, combines binding buyer agreements, a 24/7 worker hotline, independent monitors, and direct commercial consequences for violations. Risk surfaces continuously—not only when an auditor is scheduled to appear. In Thai seafood supply chains, Mars Petcare set up third-party grievance hotlines covering more than 50,000 workers, tied directly to procurement decisions.

The common thread: independence. At least one channel of information must sit outside the control of the company being assessed.

And regulation is catching up. The US Uyghur Forced Labor Prevention Act places a rebuttable presumption on goods linked to the Uyghur region, flipping the burden of proof to companies before products can enter the US market. The EU’s Corporate Sustainability Due Diligence Directive creates enforceable obligations to identify and address supply chain risk. Meanwhile, courts have made clear that boards cannot rely on clean reports as a defense when those reports were incapable of surfacing the problem in the first place.

Supply chains will always carry risk. But a system that mistakes the absence of bad news for good news is not providing oversight—it is creating exposure. If you want to push for change, join Freedom United’s campaigns to hold corporations and governments accountable for the people inside their supply chains.

This article draws on “What Healthcare Learned About Evidence and What Supply Chain Boards Still Miss” by Kamil Gerard Ahmed and Aparna Ahuja, MD, both members of the Freedom United Board available here: https://cdns.freedomunited.org/wp-content/uploads/2026/05/25111235/What-Supply-Chain-Boards-Still-Miss-1.pdf