Slave labor is in the news. There are well known companies that do not like the attention they are receiving:
Supreme Court Denies Nestle, Cargill, ADM Appeal in Slave Labor Case (Wall Street Journal)
Leading social compliance organizations are asking participating companies to report on their efforts to make sure that they are not procuring goods produced by slave labor in their corporate social responsibility reports. And 2015 saw “an unparalleled spike in legislative and enforcement efforts.” More recently, President Obama signed into law a bill containing a provision that officially bans imports of goods made by forced labor.
What can companies do about this? Well some big companies are throwing people at the problem. In a Wall Street Journal article, Jackie Sturm, vice president of global supply chain management at Intel, explained that educating and training suppliers requires a significant commitment in time, resources and patience. Intel has two dozen people dedicated to the task plus dozens more who assist in the effort.
Multinational companies will have to spend time with suppliers on this issue, but new content solutions have emerged that could ease the effort. Dunn & Bradstreet has recently introduced their Human Trafficking Risk Index. What this analytic solution does is look at the likelihood that supplier’s in a company’s supply base may have a problem with human trafficking. Companies can then do an audit of at risk suppliers.
Multinational companies can have thousands of Tier 1 suppliers, and in the extended multi-tier supply chain it could be hundreds to thousands of upstream suppliers. Clearly solutions are needed to allow companies to cost effectively monitor their extended supply chain.
The D&B solution marries U.S. Department of State data and International Labor Organization data with proprietary data from the D&B global corporate database. Category managers can use SIC codes and their vendor master lists to assign a score for that region and commodity. That score is based on areas and industries where human trafficking is known to be a problem. For example, mica – widely used in cosmetics – that originates from mines in India, is a known problem area. But part of the D&B analysis is based on their global database of 250 million business records, which can be used to map parent companies and that companies’ subsidiaries. This helps to insure that all divisions of a company that an organization is procuring from are run ethically.
When it comes to supply chain risk management, content solutions are an important part of the equation. Some leading companies are building risk management cockpits that proactively pull in content from a variety of sources – D&B financials, different types of insurance company risk data, Ecovadis for social compliance, and innovative content from companies like riskmethods and Elementum that can’t be quickly or easily explained. D&B’s Human Trafficking Risk Index is the latest entry into this field, but it won’t be the last.