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Will Consumer Awareness Put an End to
Modern Slavery?
At AI, our extensive experience providing
Ethical Audit Programs for some of
the world’s largest brands and retailers
has given us unique insights into ensuring
ethical supply chains worldwide.
www.AsiaInspection.com - © 2015 2
“
Modern
slavery is
still widespread
and today's
consumers
are unwittingly
benefiting from
cheaply priced
goods.”
How Much Is the Value of Man?
Slavery is illegal worldwide since the last country banned it in 2007. However,
modern slavery is still widespread and today's consumers are unwittingly
benefiting from cheaply priced goods available as a direct result of this
harrowing practice.
While awareness of the extent of the problem is still very low, the sea change
is starting. Recent lawsuits against major companies, including Nestlé,
have been brought about by consumers themselves, throwing modern slavery
into sharp relief. The UK’s recent Modern Slavery Act, which legally obliges
companies to examine their entire supply chain for breaches, serves to add
legal emphasis to the issue.
Modern day consumers are an increasingly powerful force that drives
businesses to become more socially accountable. Consumers are taking
companies to court demanding full disclosure of their supply chains, and
they are willing to pay a premium for slave-free products. In this landscape
of growing awareness, brands, retailers and manufacturers can no longer
ignore their responsibilities to their workers, regardless of how far down the
supply chain they might be.
Modern-Day Slavery – Facts and Figures
Slavery is often viewed as the dark stain on the developed world’s history,
when the trans-Atlantic slave trade of the 18th
and 19th
centuries was at its
peak. Those horrendous times ended with the abolition of slave trade over
the course of many years, most famously in the US after its 1861 Civil War.
In reality, slavery is still rampant today. Modern slavery comes in many forms:
human trafficking, forced labor, indentured servitude, debt bondage, and
child labor.
MODERN-DAY SLAVERY FIGURES
26%
of the world's enslaved
population are children.
78%
of slaves worldwide
are victims of forced
labor in industries that
are not related to sex.
Top 3
slavery-prevalent
countries
INDIA
14MILLION
CHINA
3.2
MILLION
PAKISTAN
2.1
MILLION
Today, the number of people enslaved worldwide is estimated anywhere
between 21 and 36 million, 26% of which are children under the age of
18.1
Almost 50%, a staggering 14 million people, are enslaved in India.
Find out how many
slaves work for you 
www.AsiaInspection.com - © 2015 3
China and Pakistan hold second and third place, with 3.2 million and 2.1
million respectively. Overall, the "top ten" of slavery-prevalent countries
account for over 70% of the global total.2
A common misconception is that modern slavery and human trafficking
are primarily limited to the sex industry, but as many as 78% of slaves
worldwide are victims of forced labor in industries that are not related
to sex. According to analysis by the labor rights NGO Verité, industries
with the highest risk of slavery include textile and apparel manufacturing,
fishing, construction, and mining.3
In pursuing lower priced inputs, brands
and businesses have constructed vast global supply chains that extend to
locations where the governments cannot be relied upon to enforce labor laws
and uphold human rights.4
As a result, a high percentage of products used
by a modern consumer can be potentially traced to modern slavery, several
tiers into its production process.
Thai Fishing Industry – a Grave Example
The next time you go to the supermarket, look at the seafood in the frozen
food department; a large percentage is sourced from Southeast Asia. The
Thai seafood export business is worth some $7.3 billion a year. It’s also an
industry that relies on forced labor.
Thailand has been in the spotlight as a major modern slavery offender,
ever since an investigation conducted in 2014 revealed that Charoen
Pokphand (CP) Foods, the world’s largest supplier of prawns (shrimps),
buys fishmeal for its prawn farms from companies that use slave labor
on their fishing boats. Escaped victims reported the horrific conditions in
which they were forced to work unpaid, including 20-hour work days, being
kept in chains, sold on to other boat owners, being regularly beaten and
tortured, and many brutally murdered.5
At the time of this reveal, major
retailers issued statements saying that it was against their policies to
buy from suppliers who did not comply with national standards and
international laws, and voicing their strong concerns about the involvement
of slave labor in the products they bought from CP Foods. At the same time,
many of them admitted that they did not investigate the full extent of
their supply chain or change suppliers.
Most recently, Rohingya refugees from Myanmar have been providing a
new source of slave labor for the fishing trade. Thousands of these refugees
end up in so-called "jungle camps" controlled by human traffickers. Those
unable to pay the ransom are sold to boat captains, worked to complete
exhaustion and killed once considered useless.6
A number of such trafficking
camps had been discovered and shut down in Thailand, and more recently,
in Indonesia.
This year, over 2,000 men from Myanmar, Cambodia and Laos have been
liberated and sent home. Some of them had spent more than a decade
enslaved on Thai fishing boats.7
“
This year,
over 2,000
menfromMyanmar,
Cambodia and
Laos have been
liberated and sent
home. Some of
them had spent
more than a
decade enslaved
on Thai fishing
boats.”
www.AsiaInspection.com - © 2015 4
Investigations of this sort are becoming more frequent, gradually dragging the
extent of modern slavery into spotlight. But the progress remains slow, and
products of slave labor are still being passed down the supply chain
– from small boats and fisheries, to larger companies, to exporters like CP
Foods, to global retail chains, and ultimately to the consumer.
Consumer Awareness – Gaining Momentum
As more cases of modern-day slavery come into view and are put under
investigation, consumers are adding increased pressure to companies,
demanding more transparency in their supply chains. More and more modern
consumers want to know the full story behind the products they buy,
and whether or not their purchase indirectly facilitates unethical practices
and violations of human rights.
It is undeniable that consumers have real power to demand transparency
and compliance of the brands – but once they are aware of the problems.
Increasing the level of such awareness is among the top priorities of numerous
anti-slavery initiatives and NGOs. A particularly interesting project, launched
by the Made In A Free World initiative in 2011 under the name of Slavery
Footprint,8
offers consumers an estimate of how many slaves work for them,
based on their lifestyle and purchasing habits. The idea is to sound a wake-
up call to the harsh truth – any modern consumer is almost certainly
benefiting from slave labor.
Consumer surveys show that the majority of consumers would change
their purchasing decision depending on whether or not a certain product
involved slavery or exploitation. In the UK and the US, 66% of consumers
would stop buying such a product, and more than half would agree to
pay more for slavery-free goods (up to 10% premium in the US, up to
50% premium in the UK). The sentiment was even stronger in shoppers of
high-end brands; 86% of consumers in the UK and and 70% in the US would
take action to ensure that their purchase did not involve exploitation. In the
medium-range brand sector, this number was around 75%.9
MODERN-DAY SLAVERY CONSUMER AWARENESS
+
66%
of UK and US consumers would stop buying a
product involving slavery or exploitation.
50%
of consumers would agree to pay more for
slavery-free goods.
$
NO
SLAVE
www.AsiaInspection.com - © 2015 5
Progress So Far
LEGISLATION
The most recent development in legislation aimed at combating modern slavery
is the UK's Modern Slavery Act, which came into effect in March 2015 and
is the first legislative act of its kind in Europe. Its clause 54, Transparency
in Supply Chain Provisions (amendment effective October 2015) legally
obliges company management to examine every link of their supply
chains, not just their immediate suppliers, and provide evidence of their
findings. Companies that meet the minimum turnover threshold (£36 million)
must produce annual reports on their efforts to identify and prevent modern
slavery in their supply chains.10
The Modern Slavery Act is a step forward from its US predecessor, the
California Transparency in Supply Chains Act (CTSCA), which requires
companies to disclose evidence of modern slavery in their supply chains
and any efforts made to eliminate it, but does not actually oblige them to
take action. In late 2014, the Federal Business Supply Chain Transparency
on Trafficking and Slavery Bill was introduced into the US Congress. If
passed, this bill would impose requirements similar to the CTSCA, on the
federal level 11
BRAND AND RETAILER EFFORT
Some brands are taking steps to uncover and eradicate modern slavery
in supply chains without waiting for government pressure. A good example
of that is Patagonia, an outdoor apparel brand that has always prided itself
on its ethical sourcing and manufacturing practices. A social responsibility
audit of the brand's Taiwanese suppliers conducted in 2011 revealed that
the fabric mills used labor brokers who charged migrant workers exorbitant
fees for job placement, essentially forcing them into indentured servitude.
To address this, Patagonia developed new Migrant Worker Employment
Standards (implemented in 2014), conducted awareness training for its
employees, and carried out numerous social responsibility audits of its raw
material suppliers. The brand's efforts were lauded by the International
Labour Organisation.12
GRASSROOTS INITIATIVES
There are hundreds of associations, foundations and NGOs working to raise
awareness and abolish modern slavery, some of the best-known ones being
Walk Free, Free the Slaves, and Made In A Free World. However, it is not
uncommon for consumers to directly demand that manufacturers ensure
that their products are slavery-free. In the aftermath of the CP Foods
prawn scandal, a number of online petitions took off through websites like
FairFoods, SumOfUs and Change.org. Petition signatories demanded that
retailers pay living wages to Thai fishermen, end exploitation in the Thai fish
and seafood industry, and join Project Issara, a Thai-based initiative to end
modern slavery.
“
It is not
uncommon
for consumers to
directly demand
that manufacturers
ensure that their
products are
slavery-free.”
www.AsiaInspection.com - © 2015 6
A year later, consumer pressure keeps mounting. In August 2015, four citizens
of California filed a class action suit against Nestlé, with allegations
of the use of slave labor in the production of their cat food, which,
indeed, uses fish sourced from Thailand. "It’s a fact that the thousands
of purchasers of its top-selling pet food products would not have bought
this brand had they known the truth - that hundreds of individuals are
enslaved, beaten or even murdered in the production of its pet food," said
the plaintiffs' lawyer.13
These examples support the findings of the surveys quoted in this report.
Consumers do feel strongly about involvement of slavery in the products
they use, and they are willing to put the financial and social pressure
on the manufacturers and retailers to change the status quo.
Importance of Slavery-Free Supply Chains
The examples above make it obvious that awareness of the abuse of
human rights in supply chains has been increasing. Its pace might not
yet be enough to end modern slavery tomorrow, but it is sufficient to make
major brands wary of the consequences that unscrupulous or negligent
treatment of supply chains can bring. Failure to ensure social responsibility
in supply chains can cause disastrous brand value destruction, class actions
lawsuits, and under the new UK legislation, fines and jail time.14
Andrew Forrest, Chairman of the Walk Free Foundation, believes that the
majority of companies do not wish to exploit people, but at the same time
are reluctant to look too closely at their supply chains for fear of discovering
slavery and suffering the resulting reputational damage.15
Yet for companies
today, lack of awareness of what goes on in their supply chains is
sooner an aggravating factor than a mitigating one. Major brands find
themselves under increasing pressure – from "above" in the form of tightening
legislation and from "below" in the form of consumers, who wish to be
more aware of the products they buy, and demand that the businesses
they patronize ensure such awareness.
That said, eliminating modern slavery from global supply chains is a
tremendous challenge. Major brands' supply chains are long and complex,
crossing multiple borders and involving numerous subcontractors. In a
survey by SCM World, only 17% of companies said they had good
visibility in their tier 3 and 4 suppliers – while the sourcing chains
of global corporations can extend to many more tiers still.16
Ensuring
transparency and traceability is particularly difficult in low-cost destinations,
which are often rife with corruption. Investigations into a brand's supply
chain should be conducted on-site, by auditors familiar with the country
and the industry, and with a system in place to ensure that bribery is not
an option.
www.AsiaInspection.com - © 2015 7
How AI Can Help – Comprehensive Ethical Audits
AsiaInspection offers a range of tailored Ethical Audit Programs that help its
clients ensure that every link of their supply chain meets international standards
for social and ethical compliance, as well as the clients' in-house policies on
worker rights and labor safety. As more and more companies recognize the
importance of social responsibility, there is growing demand from brands and
retailers who are looking to secure their global supply chains. The demand for
AsiaInspection’s ethical audit programs increased by 65% in the first quarter
of 2015, and the upward trend remains strong.
Ethical audits can be conducted to meet client’s specific requirements, in
addition to our Best-in-Class Audit Protocol, as well as several internationally
recognized standards for social and ethical compliance.
AsiaInspection’s Ethical Audit Programs cover the following sections:
•	 Forced labor
•	 Child and young labor
•	 Working hours and wages
•	 Labor practices
•	 Hygiene, health and safety
•	 Waste Management
BEST-IN-CLASS
Although there are many well-known standards that clients can follow,
AsiaInspection has formulated its own Best-in-Class Audit Protocol, which
uses the best of existing initiatives, combined with the most effective practices
that we have learned from performing 10,000 ethical audits each year.
We use a standardized process for onsite audits that aims to provide accurate
and reliable information, culminating in a Corrective Action Plan that gives
clients and suppliers the opportunity to address any minor, major or critical
issues. We conduct workshops to educate suppliers on best practices and
help them achieve compliance. By giving all workers access to anonymous
feedback channels, we gather the most objective information about their
working conditions. Interviewees are cross-checked, and follow-up interviews
are held in case of any perceived inconsistencies.
To ensure manufacturing actually occurs at an approved factory, and not at an
unauthorized subcontractor facility, EthicalAudit Programs are often combined
with onsite product inspections. During its audits, AsiaInspection now tracks
the GPS coordinates of a factory, which are included in the report.
AUDITS TO INTERNATIONAL STANDARDS
AsiaInspection employs trained and professionally certified auditors that
can perform audits according to all of the globally recognized social audits
standards and protocols, including:
www.AsiaInspection.com - © 2015 8
•	 SA8000 – one of the world's first social certification standards, and the
most internationally recognized. Unlike many other standards, SA8000
involves the top-level management in the certification process by setting
out the structures and procedures that companies must adopt. Companies
that achieve SA8000 certification are universally lauded as the best of
their class in social responsibility. AsiaInspection ethical audit programs
adhere to internationally recognized SA8000 standards for social and
ethical compliance.
•	 SMETA – a compilation of best practices in ethical audits, established by
Sedex. SMETA is not a standard or a certification process, but a set of
protocols for high-quality ethical audits, which use ETI standards and local
laws. This protocol is more supplier-oriented.
•	 ETI – an internationally recognized code of labor practice founded on
the standards of the International Labour Organisation. ETI defines best
practice in ethical trade and respects local laws.
These global standards do not vary from country to country, and are applicable
for all industries.
The facts and figures of recent years point to the fact that ethical and social
accountability are no longer a matter of philosophy – but a real business
need. By ensuring the transparency and integrity of your supply chain, you
protect your brand and reputation and create unmistakable value for your
stakeholders. Given the vast size and geography of today's corporate supply
chains, professional ethical audits are the best way to inspect and verify the
compliance of your suppliers.
Feel free to contact us to discuss a program that suits your needs.
www.AsiaInspection.com - © 2015 9
NOTES
1.	 U.N. International Labor Organization Global Estimate of Forced Labor 2012 - http://www.ilo.org/
washington/WCMS_182004/lang--en/index.htm
2.	 Walk Free Global Slavery Index 2014 - http://www.globalslaveryindex.org/findings/
3.	 US Department of State Trafficking in Persons Report 2015 - http://www.state.gov/j/tip/rls/tiprpt/2015/
4.	 Tackling Modern Slavery in Supply Chains - https://www.walkfree.org/business/
5.	 Revealed:Asian slave labour producing prawns for supermarkets in US, UK - http://www.theguardian.
com/global-development/2014/jun/10/supermarket-prawns-thailand-produced-slave-labour
6.	 Revealed: how the Thai fishing industry trafficks, imprisons and enslaves - http://www.theguardian.
com/global-development/2015/jul/20/thai-fishing-industry-implicated-enslavement-deaths-rohingya
7.	 More than 2,000 enslaved fishermen rescued in 6 months - http://www.washingtonpost.com/
business/more-than-2000-enslaved-fishermen-rescued-in-6-months/2015/09/17/503e04a0-5d01-
11e5-8475-781cc9851652_story.html
8.	 http://slaveryfootprint.org/
9.	 Modern Slavery Awareness Prompts Consumers To Switch Brands: Survey - http://www.lse.co.uk/
AllNews.asp?code=c2yx3igq
10.	What does the Modern Slavery Act mean for brand protection? – Segura Systems Whitepaper http://
inbound.segurasystems.com/what-the-modern-slavery-act-means-for-brand-protection
11.	 Recent developments in US legislation on modern slavery - http://www.lexology.com/library/detail.
aspx?g=f9b4675d-c785-4ac1-9d3d-7ed6346fb1cb
12.	The Unacceptably High Cost of Labor - http://www.thecleanestline.com/2015/06/the-unacceptably-
high-cost-of-labor-a-new-migrant-worker-standard-from-patagonia.html
13.	Nestlé Accused of Putting Fish From Slave Labor in Cat Food - http://www.bloomberg.com/news/
articles/2015-08-27/Nestlé-accused-of-putting-fish-from-slave-labor-in-cat-food
14.	Human Rights as a Business and Reputational Risk - https://www.dlapiper.com/en/us/insights/
publications/2015/07/human-rights-as-a-business-and-reputational-risk/
15.	The Modern Slavery Bill: A Step in the Right Direction - http://www.huffingtonpost.com/andrew-
forrest/the-modern-slavery-bill-a_b_7010494.html
16.	http://blogs.wsj.com/riskandcompliance/2015/09/03/slave-labor-concerns-give-companies-more-
supply-chain-worries/
About AsiaInspection
AI is a global leading quality control and compliance service provider
that partners with brands, retailers and importers around the world to
secure, manage, and optimize their supply chain.
AI performs SupplierAudits Programs, Product Inspections, and Laboratory
Testing. Clients from over 100 countries worldwide benefit from web-
based mobile friendly account management, fast scheduling, and highly
competitive all-inclusive pricing: $309 for Product Inspections and $629
for Factory Audits.
AI guarantees on-site arrival within 48 hours of booking, and a same-day
inspection report available online.
With over 800 inspectors and auditors classified by product range,
account managers speaking over 20 languages, and service coverage
of 77 countries, AsiaInspection is Your Eyes in the Factory™.
Connect with us
sales@asiainspection.com
www.AsiaInspection.com

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Will Consumer Awareness Put an End to Modern Slavery?

  • 1. Will Consumer Awareness Put an End to Modern Slavery? At AI, our extensive experience providing Ethical Audit Programs for some of the world’s largest brands and retailers has given us unique insights into ensuring ethical supply chains worldwide.
  • 2. www.AsiaInspection.com - © 2015 2 “ Modern slavery is still widespread and today's consumers are unwittingly benefiting from cheaply priced goods.” How Much Is the Value of Man? Slavery is illegal worldwide since the last country banned it in 2007. However, modern slavery is still widespread and today's consumers are unwittingly benefiting from cheaply priced goods available as a direct result of this harrowing practice. While awareness of the extent of the problem is still very low, the sea change is starting. Recent lawsuits against major companies, including Nestlé, have been brought about by consumers themselves, throwing modern slavery into sharp relief. The UK’s recent Modern Slavery Act, which legally obliges companies to examine their entire supply chain for breaches, serves to add legal emphasis to the issue. Modern day consumers are an increasingly powerful force that drives businesses to become more socially accountable. Consumers are taking companies to court demanding full disclosure of their supply chains, and they are willing to pay a premium for slave-free products. In this landscape of growing awareness, brands, retailers and manufacturers can no longer ignore their responsibilities to their workers, regardless of how far down the supply chain they might be. Modern-Day Slavery – Facts and Figures Slavery is often viewed as the dark stain on the developed world’s history, when the trans-Atlantic slave trade of the 18th and 19th centuries was at its peak. Those horrendous times ended with the abolition of slave trade over the course of many years, most famously in the US after its 1861 Civil War. In reality, slavery is still rampant today. Modern slavery comes in many forms: human trafficking, forced labor, indentured servitude, debt bondage, and child labor. MODERN-DAY SLAVERY FIGURES 26% of the world's enslaved population are children. 78% of slaves worldwide are victims of forced labor in industries that are not related to sex. Top 3 slavery-prevalent countries INDIA 14MILLION CHINA 3.2 MILLION PAKISTAN 2.1 MILLION Today, the number of people enslaved worldwide is estimated anywhere between 21 and 36 million, 26% of which are children under the age of 18.1 Almost 50%, a staggering 14 million people, are enslaved in India. Find out how many slaves work for you 
  • 3. www.AsiaInspection.com - © 2015 3 China and Pakistan hold second and third place, with 3.2 million and 2.1 million respectively. Overall, the "top ten" of slavery-prevalent countries account for over 70% of the global total.2 A common misconception is that modern slavery and human trafficking are primarily limited to the sex industry, but as many as 78% of slaves worldwide are victims of forced labor in industries that are not related to sex. According to analysis by the labor rights NGO Verité, industries with the highest risk of slavery include textile and apparel manufacturing, fishing, construction, and mining.3 In pursuing lower priced inputs, brands and businesses have constructed vast global supply chains that extend to locations where the governments cannot be relied upon to enforce labor laws and uphold human rights.4 As a result, a high percentage of products used by a modern consumer can be potentially traced to modern slavery, several tiers into its production process. Thai Fishing Industry – a Grave Example The next time you go to the supermarket, look at the seafood in the frozen food department; a large percentage is sourced from Southeast Asia. The Thai seafood export business is worth some $7.3 billion a year. It’s also an industry that relies on forced labor. Thailand has been in the spotlight as a major modern slavery offender, ever since an investigation conducted in 2014 revealed that Charoen Pokphand (CP) Foods, the world’s largest supplier of prawns (shrimps), buys fishmeal for its prawn farms from companies that use slave labor on their fishing boats. Escaped victims reported the horrific conditions in which they were forced to work unpaid, including 20-hour work days, being kept in chains, sold on to other boat owners, being regularly beaten and tortured, and many brutally murdered.5 At the time of this reveal, major retailers issued statements saying that it was against their policies to buy from suppliers who did not comply with national standards and international laws, and voicing their strong concerns about the involvement of slave labor in the products they bought from CP Foods. At the same time, many of them admitted that they did not investigate the full extent of their supply chain or change suppliers. Most recently, Rohingya refugees from Myanmar have been providing a new source of slave labor for the fishing trade. Thousands of these refugees end up in so-called "jungle camps" controlled by human traffickers. Those unable to pay the ransom are sold to boat captains, worked to complete exhaustion and killed once considered useless.6 A number of such trafficking camps had been discovered and shut down in Thailand, and more recently, in Indonesia. This year, over 2,000 men from Myanmar, Cambodia and Laos have been liberated and sent home. Some of them had spent more than a decade enslaved on Thai fishing boats.7 “ This year, over 2,000 menfromMyanmar, Cambodia and Laos have been liberated and sent home. Some of them had spent more than a decade enslaved on Thai fishing boats.”
  • 4. www.AsiaInspection.com - © 2015 4 Investigations of this sort are becoming more frequent, gradually dragging the extent of modern slavery into spotlight. But the progress remains slow, and products of slave labor are still being passed down the supply chain – from small boats and fisheries, to larger companies, to exporters like CP Foods, to global retail chains, and ultimately to the consumer. Consumer Awareness – Gaining Momentum As more cases of modern-day slavery come into view and are put under investigation, consumers are adding increased pressure to companies, demanding more transparency in their supply chains. More and more modern consumers want to know the full story behind the products they buy, and whether or not their purchase indirectly facilitates unethical practices and violations of human rights. It is undeniable that consumers have real power to demand transparency and compliance of the brands – but once they are aware of the problems. Increasing the level of such awareness is among the top priorities of numerous anti-slavery initiatives and NGOs. A particularly interesting project, launched by the Made In A Free World initiative in 2011 under the name of Slavery Footprint,8 offers consumers an estimate of how many slaves work for them, based on their lifestyle and purchasing habits. The idea is to sound a wake- up call to the harsh truth – any modern consumer is almost certainly benefiting from slave labor. Consumer surveys show that the majority of consumers would change their purchasing decision depending on whether or not a certain product involved slavery or exploitation. In the UK and the US, 66% of consumers would stop buying such a product, and more than half would agree to pay more for slavery-free goods (up to 10% premium in the US, up to 50% premium in the UK). The sentiment was even stronger in shoppers of high-end brands; 86% of consumers in the UK and and 70% in the US would take action to ensure that their purchase did not involve exploitation. In the medium-range brand sector, this number was around 75%.9 MODERN-DAY SLAVERY CONSUMER AWARENESS + 66% of UK and US consumers would stop buying a product involving slavery or exploitation. 50% of consumers would agree to pay more for slavery-free goods. $ NO SLAVE
  • 5. www.AsiaInspection.com - © 2015 5 Progress So Far LEGISLATION The most recent development in legislation aimed at combating modern slavery is the UK's Modern Slavery Act, which came into effect in March 2015 and is the first legislative act of its kind in Europe. Its clause 54, Transparency in Supply Chain Provisions (amendment effective October 2015) legally obliges company management to examine every link of their supply chains, not just their immediate suppliers, and provide evidence of their findings. Companies that meet the minimum turnover threshold (£36 million) must produce annual reports on their efforts to identify and prevent modern slavery in their supply chains.10 The Modern Slavery Act is a step forward from its US predecessor, the California Transparency in Supply Chains Act (CTSCA), which requires companies to disclose evidence of modern slavery in their supply chains and any efforts made to eliminate it, but does not actually oblige them to take action. In late 2014, the Federal Business Supply Chain Transparency on Trafficking and Slavery Bill was introduced into the US Congress. If passed, this bill would impose requirements similar to the CTSCA, on the federal level 11 BRAND AND RETAILER EFFORT Some brands are taking steps to uncover and eradicate modern slavery in supply chains without waiting for government pressure. A good example of that is Patagonia, an outdoor apparel brand that has always prided itself on its ethical sourcing and manufacturing practices. A social responsibility audit of the brand's Taiwanese suppliers conducted in 2011 revealed that the fabric mills used labor brokers who charged migrant workers exorbitant fees for job placement, essentially forcing them into indentured servitude. To address this, Patagonia developed new Migrant Worker Employment Standards (implemented in 2014), conducted awareness training for its employees, and carried out numerous social responsibility audits of its raw material suppliers. The brand's efforts were lauded by the International Labour Organisation.12 GRASSROOTS INITIATIVES There are hundreds of associations, foundations and NGOs working to raise awareness and abolish modern slavery, some of the best-known ones being Walk Free, Free the Slaves, and Made In A Free World. However, it is not uncommon for consumers to directly demand that manufacturers ensure that their products are slavery-free. In the aftermath of the CP Foods prawn scandal, a number of online petitions took off through websites like FairFoods, SumOfUs and Change.org. Petition signatories demanded that retailers pay living wages to Thai fishermen, end exploitation in the Thai fish and seafood industry, and join Project Issara, a Thai-based initiative to end modern slavery. “ It is not uncommon for consumers to directly demand that manufacturers ensure that their products are slavery-free.”
  • 6. www.AsiaInspection.com - © 2015 6 A year later, consumer pressure keeps mounting. In August 2015, four citizens of California filed a class action suit against Nestlé, with allegations of the use of slave labor in the production of their cat food, which, indeed, uses fish sourced from Thailand. "It’s a fact that the thousands of purchasers of its top-selling pet food products would not have bought this brand had they known the truth - that hundreds of individuals are enslaved, beaten or even murdered in the production of its pet food," said the plaintiffs' lawyer.13 These examples support the findings of the surveys quoted in this report. Consumers do feel strongly about involvement of slavery in the products they use, and they are willing to put the financial and social pressure on the manufacturers and retailers to change the status quo. Importance of Slavery-Free Supply Chains The examples above make it obvious that awareness of the abuse of human rights in supply chains has been increasing. Its pace might not yet be enough to end modern slavery tomorrow, but it is sufficient to make major brands wary of the consequences that unscrupulous or negligent treatment of supply chains can bring. Failure to ensure social responsibility in supply chains can cause disastrous brand value destruction, class actions lawsuits, and under the new UK legislation, fines and jail time.14 Andrew Forrest, Chairman of the Walk Free Foundation, believes that the majority of companies do not wish to exploit people, but at the same time are reluctant to look too closely at their supply chains for fear of discovering slavery and suffering the resulting reputational damage.15 Yet for companies today, lack of awareness of what goes on in their supply chains is sooner an aggravating factor than a mitigating one. Major brands find themselves under increasing pressure – from "above" in the form of tightening legislation and from "below" in the form of consumers, who wish to be more aware of the products they buy, and demand that the businesses they patronize ensure such awareness. That said, eliminating modern slavery from global supply chains is a tremendous challenge. Major brands' supply chains are long and complex, crossing multiple borders and involving numerous subcontractors. In a survey by SCM World, only 17% of companies said they had good visibility in their tier 3 and 4 suppliers – while the sourcing chains of global corporations can extend to many more tiers still.16 Ensuring transparency and traceability is particularly difficult in low-cost destinations, which are often rife with corruption. Investigations into a brand's supply chain should be conducted on-site, by auditors familiar with the country and the industry, and with a system in place to ensure that bribery is not an option.
  • 7. www.AsiaInspection.com - © 2015 7 How AI Can Help – Comprehensive Ethical Audits AsiaInspection offers a range of tailored Ethical Audit Programs that help its clients ensure that every link of their supply chain meets international standards for social and ethical compliance, as well as the clients' in-house policies on worker rights and labor safety. As more and more companies recognize the importance of social responsibility, there is growing demand from brands and retailers who are looking to secure their global supply chains. The demand for AsiaInspection’s ethical audit programs increased by 65% in the first quarter of 2015, and the upward trend remains strong. Ethical audits can be conducted to meet client’s specific requirements, in addition to our Best-in-Class Audit Protocol, as well as several internationally recognized standards for social and ethical compliance. AsiaInspection’s Ethical Audit Programs cover the following sections: • Forced labor • Child and young labor • Working hours and wages • Labor practices • Hygiene, health and safety • Waste Management BEST-IN-CLASS Although there are many well-known standards that clients can follow, AsiaInspection has formulated its own Best-in-Class Audit Protocol, which uses the best of existing initiatives, combined with the most effective practices that we have learned from performing 10,000 ethical audits each year. We use a standardized process for onsite audits that aims to provide accurate and reliable information, culminating in a Corrective Action Plan that gives clients and suppliers the opportunity to address any minor, major or critical issues. We conduct workshops to educate suppliers on best practices and help them achieve compliance. By giving all workers access to anonymous feedback channels, we gather the most objective information about their working conditions. Interviewees are cross-checked, and follow-up interviews are held in case of any perceived inconsistencies. To ensure manufacturing actually occurs at an approved factory, and not at an unauthorized subcontractor facility, EthicalAudit Programs are often combined with onsite product inspections. During its audits, AsiaInspection now tracks the GPS coordinates of a factory, which are included in the report. AUDITS TO INTERNATIONAL STANDARDS AsiaInspection employs trained and professionally certified auditors that can perform audits according to all of the globally recognized social audits standards and protocols, including:
  • 8. www.AsiaInspection.com - © 2015 8 • SA8000 – one of the world's first social certification standards, and the most internationally recognized. Unlike many other standards, SA8000 involves the top-level management in the certification process by setting out the structures and procedures that companies must adopt. Companies that achieve SA8000 certification are universally lauded as the best of their class in social responsibility. AsiaInspection ethical audit programs adhere to internationally recognized SA8000 standards for social and ethical compliance. • SMETA – a compilation of best practices in ethical audits, established by Sedex. SMETA is not a standard or a certification process, but a set of protocols for high-quality ethical audits, which use ETI standards and local laws. This protocol is more supplier-oriented. • ETI – an internationally recognized code of labor practice founded on the standards of the International Labour Organisation. ETI defines best practice in ethical trade and respects local laws. These global standards do not vary from country to country, and are applicable for all industries. The facts and figures of recent years point to the fact that ethical and social accountability are no longer a matter of philosophy – but a real business need. By ensuring the transparency and integrity of your supply chain, you protect your brand and reputation and create unmistakable value for your stakeholders. Given the vast size and geography of today's corporate supply chains, professional ethical audits are the best way to inspect and verify the compliance of your suppliers. Feel free to contact us to discuss a program that suits your needs.
  • 9. www.AsiaInspection.com - © 2015 9 NOTES 1. U.N. International Labor Organization Global Estimate of Forced Labor 2012 - http://www.ilo.org/ washington/WCMS_182004/lang--en/index.htm 2. Walk Free Global Slavery Index 2014 - http://www.globalslaveryindex.org/findings/ 3. US Department of State Trafficking in Persons Report 2015 - http://www.state.gov/j/tip/rls/tiprpt/2015/ 4. Tackling Modern Slavery in Supply Chains - https://www.walkfree.org/business/ 5. Revealed:Asian slave labour producing prawns for supermarkets in US, UK - http://www.theguardian. com/global-development/2014/jun/10/supermarket-prawns-thailand-produced-slave-labour 6. Revealed: how the Thai fishing industry trafficks, imprisons and enslaves - http://www.theguardian. com/global-development/2015/jul/20/thai-fishing-industry-implicated-enslavement-deaths-rohingya 7. More than 2,000 enslaved fishermen rescued in 6 months - http://www.washingtonpost.com/ business/more-than-2000-enslaved-fishermen-rescued-in-6-months/2015/09/17/503e04a0-5d01- 11e5-8475-781cc9851652_story.html 8. http://slaveryfootprint.org/ 9. Modern Slavery Awareness Prompts Consumers To Switch Brands: Survey - http://www.lse.co.uk/ AllNews.asp?code=c2yx3igq 10. What does the Modern Slavery Act mean for brand protection? – Segura Systems Whitepaper http:// inbound.segurasystems.com/what-the-modern-slavery-act-means-for-brand-protection 11. Recent developments in US legislation on modern slavery - http://www.lexology.com/library/detail. aspx?g=f9b4675d-c785-4ac1-9d3d-7ed6346fb1cb 12. The Unacceptably High Cost of Labor - http://www.thecleanestline.com/2015/06/the-unacceptably- high-cost-of-labor-a-new-migrant-worker-standard-from-patagonia.html 13. Nestlé Accused of Putting Fish From Slave Labor in Cat Food - http://www.bloomberg.com/news/ articles/2015-08-27/Nestlé-accused-of-putting-fish-from-slave-labor-in-cat-food 14. Human Rights as a Business and Reputational Risk - https://www.dlapiper.com/en/us/insights/ publications/2015/07/human-rights-as-a-business-and-reputational-risk/ 15. The Modern Slavery Bill: A Step in the Right Direction - http://www.huffingtonpost.com/andrew- forrest/the-modern-slavery-bill-a_b_7010494.html 16. http://blogs.wsj.com/riskandcompliance/2015/09/03/slave-labor-concerns-give-companies-more- supply-chain-worries/ About AsiaInspection AI is a global leading quality control and compliance service provider that partners with brands, retailers and importers around the world to secure, manage, and optimize their supply chain. AI performs SupplierAudits Programs, Product Inspections, and Laboratory Testing. Clients from over 100 countries worldwide benefit from web- based mobile friendly account management, fast scheduling, and highly competitive all-inclusive pricing: $309 for Product Inspections and $629 for Factory Audits. AI guarantees on-site arrival within 48 hours of booking, and a same-day inspection report available online. With over 800 inspectors and auditors classified by product range, account managers speaking over 20 languages, and service coverage of 77 countries, AsiaInspection is Your Eyes in the Factory™. Connect with us sales@asiainspection.com www.AsiaInspection.com