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Enabling supply chain transparency to combat forced labor and modern slavery (Part 2): What it means for procurement technology

04/19/2022 By

In Spend Matters’ new series looking into how a combination of process and technology can help root out and combat forced labor and modern slavery in global supply chains, we look at understanding and addressing the regulatory environment, the role technology can play in bringing issues to the fore, and the key solution vendors enabling this transparency. 

In part one we looked at the details of two of the newest regulations that apply to human rights and forced labor in supply chains: the US “Uyghur Forced Labor Prevention Act” (UFLPA) and the German “Lieferkettensorgfaltspflichtengesetz” (LkSG, in English: “Act on Corporate Due Diligence Obligations for the Prevention of Human Rights Violations in Supply Chains”). 

We also highlighted that such regulations exist in multiple countries, in various formats, and with various obligations for companies to keep track of. They all, to some extent, can be linked to a global initiative by the United Nations: the UN Guiding Principles on Business and Human Rights (UNGP). This document from 2011 introduced a set of guidelines for states and companies to prevent, address and remedy human rights abuses committed in business operations. It also sets responsibilities for organizations to perform due diligence “to identify, prevent, mitigate and account for how [they] address their adverse human rights impacts.” 

The patchwork of existing laws creates complexity for procurement and supply chain professionals, and we believe that the headache will only get worse because there will be more and more laws regulating human rights, forced labor and environmental elements (CO2, methane, deforestation, etc.) in supply chains. Existing guidelines or regulations will evolve to become more far-reaching and stricter.

Therefore, in part 2 we look at what this all means for procurement, from a capability and technology standpoint. Part 3 will go deeper by providing an overview of various providers that offer solutions that enhance compliance to regulatory requirements.

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ESG (Environmental, Social and Governance)