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Businesses need to do more to involve workers in their supply chains governance

Prof. Alexander Trautrims blogs on the findings of the research analysing supply chain governance in complex supply chains.

Published: 6th December 2022

Mitigating modern slavery in supply chains across borders and layers of suppliers - usually called supply chain tiers - can be difficult.

Nevertheless, workers and modern slavery incidents in these supply chains are ultimately connected to the lead-buyer firms, which are increasingly held responsible for their actions (or lack of actions) against modern slavery in their supply chains. The activities of managing these activities to control and mitigate modern slavery risks in the supply chain are summarised as supply chain governance.

In the project on addressing modern slavery in long and complex supply chains, funded by the Modern Slavery PEC, we investigated the supply chain governance activities of UK-based utilities and industrial companies, a sector that has received very little research attention in comparison to other sectors such as apparel or farming. Although utilities and industrial companies have long and often complex supply chains, they also tend to operate in a more stable environment with the opportunity to build more long-term relationships with suppliers, in contrast with other sectors, where trends and seasons lead to volatility and transactional relationships.

Our study utilised data that these utilities companies submit to the Workforce Disclosure Initiative’s (WDI) survey (run by ShareAction), complemented by a literature review, focus groups with business practitioners and sector experts, and a workshop with survivors of modern slavery. As companies submit to the WDI survey voluntarily and agreed to their participation in the focus group, we can assume a positive sampling bias and that companies in our study are amongst the more actively engaged companies against modern slavery.

What we found in our study was that companies rely largely on a power-based supply chain governance approach. They were good in auditing all their tier 1 suppliers (and a few to tier 2), get their suppliers to sign their codes of conduct, and have board-level sign-off for their modern slavery statements. However, we found very little evidence of a shift towards worker-driven supply chain governance – the equitable inclusion of workers in supply chain governance activities – which in academic literature is seen as the gold standard of supply chain governance against modern slavery. This worker-driven governance approach is currently not facilitated in modern slavery responses, and companies and policymakers will need to find ways how the inclusion of workers in supply chains can be encouraged and facilitated, particularly when the modern slavery risk is further upstream in the supply chain.

We also found that specialists with modern slavery knowledge in the companies were often siloed in their roles without empowered inclusion in commercial decisions, despite their knowledge, due diligence and awareness of modern slavery risk hot spots in their supply chains. Instead, they spent much of their time on compliance-oriented activities and reporting. Connecting this knowledge and expertise in businesses to commercial decisions is a crucial move in organisational practice that needs to happen.

"We found very little evidence of a shift towards worker-driven supply chain governance"

Prof Alexander Trautrims

Naturally, businesses are doing great at compliance activities, as they have existing processes in place from managing other risks in their supply chains. But these processes are usually focused on protecting the organisation, and not on protecting workers. It is encouraging that businesses are doing well in covering these activities, and the next step must be structurally towards addressing modern slavery risks and the underpinning forces that foster its occurrence.

Prof Alexander Traitrims is an Associate Professor in Supply Chain and Operations Management at Nottingham University Business School and leads the Business and Economies Programme at the University of Nottingham’s Rights Lab. You can follow him on Twitter at @UnchainedSupply.