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Tackling modern slavery
29
Nov
2016
Forced labour and exploitation in the supply chain is widespread but conventional CSR practices are not enough to stop it, argues Steve New

In 2014, a year-long, multi-agency operation in Cambridgeshire, UK, uncovered an entrenched system of exploitation of migrant workers (mostly from Eastern Europe) in vegetable production. The operation identified 19 cases involving allegations of human trafficking and over 200 involving  alleged cases  of  illegal  gangmaster  activity. A ‘gangmaster’ is essentially a recruitment agency that supplies workers to the agricultural and food sectors; plenty of gangmasters are licensed and legitimate, but many operate illegally.  The extensive press coverage of the operation and its outcome revealed the distressing and intimidating conditions in which the workers were operating, including overcrowding in unsafe and unhygienic accommodation, and extremely low wages, achieved by having illegal deductions made from their pay, such as for rent and transport. Most of these exploited workers were involved in harvesting leeks that were destined for sale in UK supermarkets.

As commentators and members of the public asked at the time, how could this happen in a modern European country? And how could the UK’s big supermarket chains, which all have well publicised corporate social responsibility (CSR) policies, apparently have colluded in it?

The answer, as I argued in my 2015 paper, Modern slavery and the supply chain: the limits of corporate social responsibility, is that CSR practices and supply chain management that may be effective in answering challenges such as environmental sustainability simply do not work when it comes to dealing with the problem of forced labour.

Supply chain management is usually concerned with the flow of physical materials that move from one place or one party to another. It is often the case that some suppliers are not considered important because what they provide is not seen as a principal component in a product. For example, in discussions of the automotive industry, suppliers of electricity, or Enterprise Resource Planning Software, or office consumables, are frequently considered to be in a different (and less significant) category than the suppliers of components that become part of the vehicle. Similarly, suppliers of workers – contract employment agencies, gangmasters – are often disregarded as part of the ‘supply chain’, with a much higher profile being given to suppliers of products.   

The other problem, of course, is that forced labour, along with all other forms of modern slavery, is unequivocally illegal in all countries. This makes it very difficult to detect using the simple auditing techniques, questionnaires, and certification common to most sustainability and supply chain monitoring initiatives – because anyone involved in forced labour is simply going to lie. Furthermore, the victims of forced labour generally have considerable incentives to avoid contact with authorities (for example, because of fears about deportation, or fear of retribution) and may even been bound to their situation by more complex psychological and social ties.   

But before we throw our hands in the air and conclude that nothing can be done, it is worth considering the conditions that give rise to vulnerable, precarious labour in the first place. In the case of the Cambridgeshire migrant workers, it might be traced back to the power of UK supermarkets over their supply base, which has been an issue of continued concern for many years. UK farmers have complained about being crushed to the point of desperation by their principal customers: prices are beaten down, extra charges may be levied, prior contracts swept away, and payments delayed. In an increasingly challenging commercial environment, is it a surprise that they turned a blind eye to the terrible practices of some of the agencies providing them with labour?

All of the UK’s major supermarkets have very well developed CSR programmes, and indeed have publically worked with many initiatives designed to eliminate bad practice, including collaborations with the UK’s regulatory and enforcement agency for forced labour in agriculture. But a real attempt to eradicate modern slavery in supply chains must go beyond the requirements of CSR and start with a profound reappraisal of fundamental business models.  

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Steve New View profile

Steve New is Associate Professor in Operations Management at Saïd Business School and Fellow of Hertford College at the University of Oxford. His areas of expertise include supply chain management and process improvement.