Oxfam takes its supply chain seriously. Others should follow

The UK Modern Slavery Act passed Parliament on 26 March 2015. As one of the first national laws to mandate extraterritorial due diligence from companies, it is an experiment to closely monitor. Mandating transnational due diligence from companies would mean a giant step forward in addressing the current culture of impunity for rampant human, workers’ and environmental rights violations in global supply chains of multinationals.

As such it was welcomed by trade unions, anti-slavery and other civil society groups, who at the same time had serious reservations as to the possible impact due to the absence of enforcement mechanisms, sanctions or even any obligation to actually undertake prevention measures. The required link to the UK, which leaves British companies operating exclusively outside the country off the hook, is also a concern. Nevertheless one and a half years after the legislation was passed, it’s high time to make a first assessment of its impact.

The mandated transparency requires any organisation with a total global annual turnover of £36m to produce a statement for each financial year that outlines steps taken to identify and eradicate modern slavery from its own business and its supply chain.

Unsurprisingly, the vast majority of companies, if they report at all, limit their disclosure to the absolute minimum or less. This is confirmed by a first analysis by Business & Human Rights Resource Centre (BHRRC) of the 720 statements to date.

Some of the British companies such as Balfour Beatty and Carillion constructing World Cup stadiums or other infrastructure in Qatar – where we know that modern slavery is mandated by the kafala system – did not bother to report such. This does not mean they are not aware. Carillion has persistently refused to respond to Britain’s largest trade union, Unite, and its attempts to engage them on the issue.

The BHRRC analysis shows only a handful of statements providing some level of detail with regard to the supply chain structure and related modern slavery risks.

Marshalls, provides examples of areas of its business as well as geographic areas that are high risk; Intel described how it engages with major suppliers to create a risk profile which includes slavery and human trafficking, after which it works with suppliers to build their capacity to identify and prevent these risks; and Ford detailed how it assesses risk looking at geography, commodity type and quality of supplier performance. Most companies fail to live up to the purely formal requirements of a director level signature and publicity on the company website.

Recently Oxfam GB also published its own statement. Everyone knows Oxfam GB as a major development charity. But, as with any UK organisation with an annual turnover of more than £36m, it must account for the steps it is taking to ensure that its operations and supply chain are free of modern slavery. Oxfam’s vision is a just world without poverty, where people are valued and treated equally, enjoy their rights as full citizens, and can influence decisions affecting their lives.

Contributing or being linked with slavery in operations would arguably be an outright negation of Oxfam GB’s raison d’être, but to fulfil its mission, it sources from and is active in some of the world’s poorest countries. This exposes Oxfam GB to serious risks of modern slavery. To try and get things right, Oxfam GB has engaged with local and international representative workers’ organisations, including the International Trade Union Confederation (ITUC), and specialised NGOs such as Anti-Slavery International.

 

Mapping modern slavery

Oxfam GB’s statement still reflects the corporate social responsibility (CSR) tradition of highlighting positive actions rather than actually identifying and mitigating human rights risks, but it also acknowledges responsibility for its supply chain and recognises the lack of transparency therein. It is this lack of transparency that prevents Oxfam GB from properly identifying any risks in its supply chain, let alone appropriately addressing them.

Oxfam GB’s chief executive Mark Goldring states: “To date we have found no instances of modern slavery in our operations or supply chain. However, the limitations in our approach do not yet enable us to say unequivocally that there are no such instances occurring.”

Indeed, mapping risks of modern slavery – with ever changing suppliers, products and services, countries and locations in the corresponding political and socio-economic contexts and regulatory frameworks – requires a whole new degree of effort and a full integration of human rights due diligence in general management systems.

Oxfam states that it cannot guarantee that its supply chain is slavery risk free and admits that it is far removed from demonstrating good practice, exposing it to considerable reputational risk. But the statement also includes a range of commitments for the future to build a more robust strategy to identify risks in its supply chain. It is exactly this exercise that will allow the Modern Slavery Bill to rise up to its potential.

The Oxfam statement gets a few other things right. It acknowledges that modern slavery is inextricably linked to other labour rights violations, recognises the inherent risks of complex supply chains and indirect employment, acknowledges that human rights due diligence should be integrated in general management at all levels. It recognises the importance of freedom of association and collective bargaining to mitigate risks, while the organisation has a trade union, a collective bargaining agreement, a freedom of association strategy, etc.

Imperfect due diligence procedures should not be held against a company at the start of the process as long as there is the genuine will to improve them and to act upon identified risks. Transparency constitutes in itself an important part of due diligence and should be encouraged. Without transparency, due diligence will remain at the company’s discretion.

We all know that that model has failed with insecure and informal work, poverty wages and modern slavery being incorporated into the supply chains that dominate global trade obscuring rights violations in the quest for profit.

The ITUC therefore welcomes the statement by Oxfam as a step in the right direction and benchmarks it as a standard for other companies to set up processes which genuinely identify and address risks of modern slavery in their supply chains, rather than using the statement as yet another opportunity to obscure corporate accountability for any modern slavery in the supply chains.