New research has found a significant gap between known modern slavery risks in supply chains and businesses’ efforts to address them. Ninety-six percent of the business leaders surveyed said they found modern slavery or serious labor abuses in their supply chains over the past year. Yet, most said they could prove their supply chains were free from modern slavery. But when asked about their response, only 36% could show their assessments were having any impact.
Confidence outruns evidence
The research was commissioned by the British Standards Institution (BSI) and produced in partnership with the Chartered Institute of Procurement & Supply (CIPS). A survey of senior leaders at 600 companies with more than 100 employees in the UK, Germany, France, Italy, the Netherlands and South Africa revealed a gap between what companies believe and what they can show. The industries surveyed include retail and consumer goods, food and beverage, agriculture, and pharmaceutical industries.
Despite these findings, 77% of business leaders said they had enough evidence to prove their supply chains were free from modern slavery. However, the full report found that only 18% had comprehensive visibility of suppliers three or more tiers down their supply chains. In addition, over a quarter (27%) did not require suppliers to disclose their own sources.
As a result, many companies cannot tell whether subcontractors or labor providers further down the chain exploit workers.
Companies also struggled to prove that their checks worked. For example, only 39% of those carrying out social audits could show the audits had made an impact.
Harold Pradal, president of assurance services at BSI, said:
“The challenge is then being able to demonstrate impact and show that these interventions are improving outcomes for worker. The challenge is no longer whether businesses are taking action, but whether they can demonstrate that their action is driving real improvements for vulnerable workers.”
Debt bondage behind a job offer
The BSI report includes two cases from the UK hospitality sector, shared by the anti-slavery charity Unseen. In both cases, employers used visa debts and immigration status to control workers.
A recruitment agent in Pakistan offered Manny a job as a catering manager in the UK. However, when he arrived, his employer demanded £20,000 in visa costs and threatened him with deportation. Manny took out a loan to keep his job. The report describes what happened next:
“Manny was made to work washing pots and cleaning for upwards of 75 hours a week and rarely allowed breaks. He was forced to live in poor conditions on-site and was not allowed to leave the premises alone.”
His employer also withheld his passport and subjected him to verbal and physical abuse.
Similarly, Peter came to the UK for a restaurant job. His employer claimed he owed £5,000 in visa costs and took half his salary each month. Then, after Peter paid off the supposed debt, the employer added another £10,000 and threatened to cancel his visa.
After learning of violations, 54% of companies kept working with suppliers to fix them. Another 31% ended the contract, while 11% admitted their response was limited. However, these figures show what companies did, not whether workers received remedies or saw their conditions improve.
Reporting modern slavery in supply chains is not protection
The UK is one of the six countries surveyed, and its law shows how this gap persists. Under Section 54 of the UK Modern Slavery Act, large companies must publish an annual modern slavery statement. However, the law carries no penalties for non-compliance. In 2019, an independent review recommended closing this loophole.
Statements and audits also miss where exploitation often begins. The risk starts long before a worker reaches the workplace. It starts when brokers demand fees and workers take on debts that can trap them in debt bondage.
Take action and demand laws that require businesses to prevent and eliminate exploitation in their supply chains, not just report on it.
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