Container Units at a port

Implications of COVID-19 for modern slavery challenges in supply chain management

This research will explore challenges faced by firms, in addressing modern slavery in corporate supply chains whilst also responding to Covid-19 disruptions. Insights into (de)prioritisation of modern slavery will provide vital evidence on whether existing progress, toward the objectives of UK Modern Slavery (2015) Act, is being undermined.

As the devastating and complex impacts of Covid-19 began to emerge across the world, it became clear that the disease did not affect all people equally. People with certain underlying health conditions, the elderly and BAME communities, were disproportionately affected and faced worse health outcomes. Social inequities amplified health inequities as many could not work from home and those in illegal forced labour do not benefit from government aid for workers.

Economic disparities too have emerged with many firms experiencing huge surges in demand, while others collapse or struggle to survive. The business impacts in turn increase the risk of exploitation of vulnerable workers. While business leaders focus on securing supplies to resume production and trade, the commercial imperatives for low-cost, rapid sourcing are prioritised. In this environment, there is a significant risk that due diligence related to modern slavery is deprioritised.

This research employs a large-scale quantitative survey of supply chain professionals and business leaders of large firms (turnover of £36 million and above) in the UK who fall under the UK Modern Slavery (2015) Act. The results identify if, and how, the new Covid-19 business landscape affects firms' commitments to tackle modern slavery in corporate supply chains. The tensions emerging from Covid-19 creates two opposing scenarios.

On the one hand, the impact of supply chain disruptions may concentrate attention on the firms' outcomes rather than a broader concern for social issues. Risks may be increased through new suppliers with where poorly analysed supply chain practices; contracting with new suppliers with logistical capacity rather than product expertise; increased subcontracting; and the furloughing of staff reducing firms' due diligence resources. In addition, in April 2020, the UK government relaxed the firms' obligations to publish modern slavery statements in response to the pandemic, potentially creating a perfect storm for de-prioritisation. Yet, on the other hand, there are opportunities.

The counter scenario is that Covid-19 has forced firms to examine their extended supply chains in more detail than they would normally to understand potential commercial vulnerabilities. In parallel, the impact of the pandemic has led to a rallying call for firms to consider the social implications of their activities on staff, workers, customers, and their communities. More active management of supply chains beyond tier one suppliers, necessitated by the Covid-19 crisis, therefore may present opportunities for firms to uncover the detail required to tackle modern slavery in a holistic, systemic, and human-centred approach.

This research explores how decision makers are responding to the inherent tensions between cost/resource pressures and social obligations. The insights will enable the start of an evidence-based dialogue with our research partners: The Ethical Trading Initiative and Fifty-Eight who work on the ground with individuals and organisations to combat modern slavery through training and education; Crown Commercial Service the buying arm for the UK's central government and wider public sector; the Home Office's Modern Slavery Unit; and the two academic partners, the University of Liverpool's Management School and the University of Nottingham's Rights Lab.

This collaboration ensures appropriate co-design of the research, effective dissemination of the results, and co-creation of evidence-based solutions and policy. The Chartered Institute of Procurement and Supply (CIPS) are an additional partner to ensure dissemination of results and recommendations through their membership of 200,000 professional buyers across the world, to engage a wider debate on how modern slavery can be tackled in parallel with other commercial pressures.

 

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