The threat of slavery or unethical behaviour in a firm’s supply chain is not receiving the attention it should, particularly by those who work in crisis management.
Firms are judged by the company they keep, and if they employ or work with partners who are guilty of such practises, this represents a massive potential hit to an organisation’s reputation. Crisis managers are currently so obsessed with all things cyber that this major risk is being left unattended.
Companies or partners that form part of a firm’s supply chain need to adhere to its own high ethical standards, but this can be hard to police.
A few years ago, I was brought in to help extricate a client from an ethical crisis. One of their premium brands is a very well-known set of children’s toys. These they had made in China, only to discover that the manufacturers had swapped out the agreed paint, brought in a cheaper brand, which contained high levels of lead and used this in the manufacturing process. Young children put toys in their mouth and quite often chew! Parents are pretty resistant to their little darlings sucking on lead.
The company had agreed with the Chinese makers which lead-free paint should be used and even installed detectors in the factory that checked for lead contamination. These were left to gather dust. The brand went on to feature in the New York Times for all the wrong reasons.
International food supply chains provide employment for many millions of people around the world, but unfortunately too often workers toil in dreadful conditions and many of them are children. I saw this at first hand while living in Asia. A colleague working at an NGO was tasked with visiting shrimp farmers to check that ethical standards were being maintained. He knew that children were part of the work force, but whenever he visited, word had got out and no children were to be seen.
The ongoing challenges in seafood supply chains are just one example, but can also be found in clothing, automotive and many other sectors.
Global slavery index
There is sometimes a sense that these problems are taking place half a world away and while they are to be deplored seem too complicated and too distant to deal with. That is, of course, no excuse and guess what? The problem may be closer to home than you think.
According to the 2018 Global Slavery Index by human rights group Walk Free Foundation, the UK may be home to as many as 136,000 slaves – trapped in forced labour and sexual exploitation.
Under Britain’s 2015 Modern Slavery Act, all businesses with a turnover of more than £36m ($48m) must produce an annual statement outlining actions they have taken to combat slavery in their supply chains. But campaigners claim that many of these statements are short on detail and lack transparency.
Supply chain survey
Last month the Chartered Institute of Procurement & Supply (CIPS) conducted a survey of 897 UK supply chain managers and found that almost a third (31%) did not think their business was taking the necessary steps to tackle the issue.
The survey also found little appetite among businesses when it came to introducing anti-slavery policies. Since the introduction of the UK Modern Slavery Act, only a quarter (23%) of companies that the Act applies to have undertaken site inspections to check for evidence of any slavery or human trafficking, this is up (just) from a low base of 22% last year.
Money and guidance for tackling this issue is claimed to be in short supply. Cath Hill, CIPS Group Director, commenting on the report said: ‘Supply chain professionals cannot win the fight against modern slavery on their own. Both the Government and the wider business community need to provide substantially more guidance and resources to equip procurement professionals with the tools they need to rid UK supply chains of this terrible crime.’
To be clear, it’s not the job of Business Continuity or Crisis Management to seek out unethical behaviour, though obviously if they become aware of such practises within their company’s supply chain then this information will need to be escalated to relevant executives within their organisation and quite possibly to the police. It is, however, the job of BC and CM departments to have plans in place should this issue arise.
And don’t think ‘it couldn’t happen to me’, it could. Just consider how many people and firms partner with Oxfam, a once gold-plated charity organisation now mired in scandal. A report in The (London) Times alleged aid workers within Oxfam paid for sex while on a mission to help those affected by the 2010 Haiti earthquake.
Sources gave the newspaper an account of ‘serious sexual misconduct by a group of male aid workers’. It’s alleged they threw parties with prostitutes some of whom were as young as fourteen. Paying for sex is banned under Oxfam’s code of conduct and is against UN guidelines for aid workers.
In response to the allegations, Oxfam agreed to stop bidding for UK government funding, and the charity’s chief executive, Mark Goldring, has said he will step aside at the end of the year.
A BBC headline ran as follows: Oxfam faces £16m of cuts after Haiti sex scandal. What nobody wants is their firm to replace the name Oxfam in a similar scandal in the future.
Currently, crisis mangers expend a huge amount of time and mental effort putting plans and protocols in place to deal with data-breaches, cyber-attacks, ransomware, malware and the rest of the unlovely cyber-assortment.
There’s a good reason for this: global regulators take a dim view of a company that loses client data and can now impose hefty fines. In the EU, the new General Data Protection Regulation (GDPR) means that for a serious data breach firms could be hit with fines of up to 20 million euros ($23 million) or 4 per cent of global turnover, whichever is higher. All of which comes with a serious reputational impact.
Many of our clients now deploy playbooks to fight crises as well as having a one size fits all Business Continuity Plan (BCP). These are typically terror and cyber playbooks which act as a hand rail for those tasked with overcoming such crises. Perhaps it’s time to start looking at an anti-slavery playbook. And of course, if you have a playbook or plan then it has to be tested in the white heat of a simulation exercise to see whether it’s fit for purpose, what holes it may contain, and how it can be improved.
While we need to maintain a gimlet-eye on cyber and terror and a host of other potential problems we crisis managers must face, now is the time to broaden our horizons and address the very real risk of unethical behaviour. It represents one of the biggest existential threats to a company’s well-being. Why is it being allowed to fly under the radar?