“The challenge in verifying supply chains is the sheer magnitude of the task.” —David Arkless, ManpowerGroup
“I think that mandatory ESG compliance requirements are important, but often I’ve found that voluntary compliance results in bigger and bolder compliance programs as companies are able to take ownership of their programs.” —Jean Baderschneider, ExxonMobil
“I’m an optimist by nature, and I believe that if we fast-forward 20 years we won’t be meeting at the BSR Conference to discuss human trafficking in the supply chain because it will no longer be an issue.” —Faris Natour, BSR
Natour kicked off the session by focusing on BSR’s 20th anniversary theme: Everything has changed, and yet nothing has changed. He argued that the theme is especially relevant to human trafficking because in the last 20 years, more effort has been focused on human trafficking than ever before, yet the scale of human trafficking is also larger than at any other time in history.
Baderschneider then reviewed the scale of human trafficking. Research shows that 21 million people are currently held in slavery, including 4.5 million sex trafficking victims, 14 million forced labor victims, and 2.5 million state-imposed forced labor victims. Given the significant number of trafficked individuals, it is no surprise that human trafficking has a global reach, with every country impacted by sex trafficking and more than 70 countries producing goods with slaves. Baderschneider then focused on the industry’s profits, citing studies that suggest that human trafficking is a US$200 billion industry.
Arkless then addressed the causes of human trafficking, including criminal activities and governments that ignore trafficked citizens. He first focused on the criminal activities that drive human trafficking, citing organizations such as cartels and snakehead smuggling gangs that use people as commodities. Arkless then turned his attention to the governments that benefit from human trafficking through remittances of internationally trafficked victims, which in some cases approach 10 to 12 percent of their GDP. Finally, Baderschneider added that poverty and lack of opportunity are key supply-side drivers of human trafficking.
After reviewing the scale and root causes of human trafficking, Natour turned the conversation to the corporate responsibility to respect human rights. Citing the Guiding Principles on Business and Human Rights, Natour asked the presenters how their companies ensure they are not infringing on human rights when it comes to slavery in the supply chain.
ExxonMobil, operating in more than 190 countries with a deep and complex supply chain, focuses on leadership, strong business principles, and auditing and engaging suppliers. Baderschneider highlighted the importance of fostering a corporate culture focused on creating opportunities for positive influence and applying strong business principles. The greatest impact, however, is at the supply chain level, where ExxonMobil has added language to all contracts to give the company the right to audit suppliers. Each year, the company conducts 90 third-party audits and engages suppliers from the bidding phase through the end of the relationship. ExxonMobil has yet to incorporate human trafficking as part of its audit process but plans to do so in the future.
For the ManpowerGroup the story is slightly different. As the world’s largest employer, the company’s focus is at the human resources level. The company partnered with the UN to minimize trafficking through agencies and has trained its human resources staff to be able to identify fraudulent documents to ensure the company isn’t complicit in human trafficking.
Natour then turned the conversation to government relations and the question of whether business should use its leverage to influence government action on human trafficking. Baderschneider responded by highlighting that in her experience, when companies provide economic benefits, offer skills training, and contribute to a robust industry, business has a greater ability to influence government. Arkless countered by saying that it isn’t business’s responsibility to fill government’s obligations and that the ideal role of companies is to stand for their principles and find solutions within their corporations.
Before turning to audience questions, Natour asked Baderschneider how she raises awareness internally on human trafficking. At ExxonMobil, Baderschneider uses both formal and informal approaches, including annual training and on-going conversations and engagements on human trafficking throughout the corporation.
Next, Timothy Smith, Senior Vice President and Director of Environmental, Social, and Governance Shareowner Engagement at Walden Asset Management, asked panelists to explain the business case for focusing on eradicating human trafficking. Baderschneider began by highlighting the moral imperative, calling human trafficking a crime against humanity. She went on to explain that ExxonMobil’s success depends upon having an engaged employee base and that trafficked victims present significant risks to the company. Arkless followed up by highlighting that in trying to get board-level support for his counter-trafficking initiatives, he was able to show that engaging employees on human trafficking resulted in increased employee loyalty that could be translated into more than US$100 million in cost savings (if employee attrition were reduced by 0.5 percent globally). The reality is that eradicating human trafficking in the supply chain isn’t just the right thing to do, it is also good for business.