Why COVID-19 is an opportunity to reduce modern slavery

26 June 2020: The pandemic increases the risk of modern slavery practices across supply chains, but it could be a chance to do more to eliminate it.

A crisis such as the COVID 19 pandemic demands an instant response, but it also provides an opportunity to effect change for the better once the immediate crisis is over.

This opportunity has been recognised by leaders of over 150 businesses and civil society organisations, including ICAEW's CEO, Michael Izza. In a letter coordinated by the UN Global Compact Network UK and UKSSD, they asked the UK government to use the Sustainable Development Goals (SDGs) to create a socially just and green recovery from the Covid-19 pandemic.

As Izza explained: "The SDGs are an important framework to ensure governments and businesses are pursuing the long-term public interest…As chartered accountants, we think it's vital businesses look beyond profit and have a wider social purpose "

ICAEW members are in a unique position to help businesses and organisations recover from the immediate crisis in a variety of ways. The challenge is to look beyond the bottom line and to consider the wider social good.

Modern slavery and human trafficking are social evils, and preventing them must be in the public interest. Inevitably, the immediate response to the COVID 19 pandemic by many organisations may inadvertently have led to an increase in their occurrence. 

Disruption to supply chains, changes in demand for certain goods (whether up or down), travel restrictions and falls in consumer demand because of lockdown have all played a part. The increase in demand for PPE, for example, has meant factory workers in Malaysian plants producing surgical gloves are being asked to work ever longer hours at reduced pay rates and forbidden to leave their compounds. 

Falls in demand from European consumers for fresh flowers has led to thousands of Kenyan workers being laid off. With a similar decline in tourism, alternative sources of employment are scarce. Children may be forced into work or prostitution to help their families survive. 

UK travel restrictions have led to a shortage of seasonal workers to pick the harvest. This may lead to vulnerable people in the UK, being exploited to fill the shortfall. It is worth remembering that before the COVID 19 crisis, there were several prosecutions for modern slavery involving fruit pickers in the UK. 

But rather than shrug our shoulders and assume that things will get better when the recovery starts now is the time to be proactive. Many countries, including the UK, already have legislation that requires organisations to review their supply chains for the risk of modern slavery and human trafficking. Unfortunately, many organisations may obey the letter of the law but little more. 

A review of the UK's Section 54 Transparency in Supply Chains Statements, for example, shows that while all include a commitment to eradicating slavery, few give concrete details of what they have done or will do. Some only look at their immediate suppliers (Tier 1) rather than the entire supply chain and some do not indicate whether the policies have been approved by senior management. 

Some organisations do not publish a statement at all or not annually. The legislation should be toughened or extended to improve compliance, but more is needed.

The crisis has forced many organisations to review their supply chain, particularly concerning location, over-reliance on one supplier, using 'just in case' not 'just in time' as the basis for their purchasing policy and an over-emphasis on the cheapest and quickest. This means now is the ideal time for any such review to help create a socially just recovery. To do this organisations should:

• review their supply chains to assess any new risk of slavery or human trafficking;
• discuss their expectations regarding working conditions, employment terms, remuneration including limitations on overtime, recruitment policies, with all their suppliers throughout the supply chain, including indirect suppliers or contractors;
• make it clear that a condition of any future contract is proof of fair and decent employment conditions in compliance with the law (both in the country of the supplier and the purchaser); and 
• review employment conditions regularly to ensure compliance (to include visits once travel restrictions have been lifted). 

Organisations should not, however, use the crisis as an excuse not to honour past contracts (as has happened in the garment industry with high street chains cancelling orders) or to exact even more onerous terms. Purchasers may feel they have the upper hand as suppliers will be desperate for any contracts but reducing prices or delivery times may mean that existing employees or new recruits are forced to work longer hours for less pay. 

It may seem that this primarily relates to the retail, manufacturing, hospitality, or agricultural sectors. However, it also applies to the finance industry, including accountants. Accountancy firms not only advise businesses but buy coffee, computers, employ or sub-contract cleaners, security and purchase promotional items themselves. All of these are areas where there is a risk of modern slavery. Consumers and investors have a role to play too in holding organisations to account. If we want a change for the better, then we all have a role to play, and we should act sooner rather than later, or the next crisis may be worse.