With the recent passage of the Trade Facilitation and Trade Enforcement Act of 2015, which bans the U.S. from accepting imports produced by slave or child workers, companies will have to start digging further down in their supply chain to investigate whether this forced labor exists. According to Mickey North Rizza, vice president of strategic services at BravoSolution, companies need to start preparing now for enforcement of this new trade act, and that begins with mapping your supply chain to identify areas of risk.
Companies need to take a look at not only their tier 1 suppliers but also tier 2 and tier 3 suppliers and gain a higher level of visibility into every partner in the supply chain.
“You have to start at square one,” North Rizza said, beginning this investigative process at the top of the supply chain and then dive deeper into the supply base.
For companies with suppliers all over the globe, this process can be difficult, and, as North Rizza pointed out, there will be “hiccups and surprises” along the way. Take Nestle, for instance, which was surprisingly subject to scrutiny after slave labor was found in its supply chain. Diving deep into one’s supply chain, however, can provide greater visibility and help companies identify areas they may be at risk or where forced labor may be occurring, North Rizza said. Once those vulnerable areas are identified, the next step is determining how to address them, she said, adding this process should involve the C-suite.
Companies Report Mapping Efforts
Nestle isn’t the only company that surprisingly found slave labor in their supply chains. Back in 2006, Ford discovered charcoal produced in Brazil through slave labor had made its way into its supply chain through the purchase of pig iron. The finding prompted the automaker to begin identifying all potential points of entry for pig iron into the supply chain.
“This included an intensive mapping of five to six tiers of suppliers (including importers, exporters and trading companies),” the company said on its website. “We also requested additional detail regarding our tier 1 suppliers’ systems for safeguarding human rights throughout their operations, including procurement.”
Intel, too, has a process in place to identify areas of risk for forced labor in its supply chain. In its September Slavery and Human Trafficking Statement, Intel said it creates risk profiles for its major suppliers to determine which ones the company will target in audits conducted by both Intel internal team members and third-party auditors.
Tools To Help Identify Possible Problem Areas
The U.S. Department of Labor has an extensive list of goods produced by child or forced labor on its website. The list includes source countries where these products are coming from. It’s a helpful tool companies may use to begin determining if a product or material in their supply chain is possibly produced through forced labor. Another tool North Rizza said could be useful is slaveryfootprint.org, a website launched in 2011 that helps consumers and businesses determine their connection to modern-day slavery around the world. Still, these tools may not be all-inclusive, and companies should continue their due diligence if they don’t find a product in their supply chain on these websites, North Rizza said.
While supply chain mapping is not an easy task, it is necessary. North Rizza said the sooner a company can uncover areas of risk or the sooner it can identify a problem in the supply chain, the quicker the company can address it and move forward.