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Pandemic increased forced labour risks, but businesses can improve

Businesses should build on the experience of the pandemic to better safeguard against forced labour. Blog by Owain Johnstone.

Published: 18th November 2021

Around the world, the economic impacts of the Covid-19 pandemic hit the most vulnerable hardest. Reductions in wages, business closures and job losses disproportionately hurt those who were already most at risk of exploitation through forced labour.

Inevitably, the vulnerability of workers to forced labour in global supply chains increased during the pandemic, as outlined in the analysis that we in the Modern Slavery and Human Rights Policy and Evidence Centre (Modern Slavery PEC) have just published, based on a review of the latest academic evidence.

Unsurprisingly, groups such as migrant workers or those in the informal economy, particularly in low- and middle-income countries and in the lower tiers of supply chains, were most affected, though workers and supply chains in the UK were affected as well.

For businesses, struggling with the immediate impact of the pandemic, a key challenge was not being able to take the steps they normally would to prevent these risks from happening in their supply chains. Due diligence on working conditions means visiting a factory or a farm in person, talking to management and to workers, and carrying out thorough checks. During the pandemic that couldn’t happen.

Nor could governments conduct normal regulatory checks and inspections. It suddenly became much harder to detect exploitative practices at the same time as the risks of those practices were rapidly increasing.

"It suddenly became much harder to detect exploitative practices at the same time as the risks of those practices were rapidly increasing."

And the risks were near-universal. Evidence shows that there was an increased risk of forced labour both in sectors that experienced a demand spike (such as PPE production, as our research on the Malaysian medical glove industry has shown) and in sectors where demand collapsed practically overnight (such as ready-made garment manufacture). The sectors most seriously affected by the pandemic included wholesale and retail trade, construction and manufacturing, and accommodation and food services, but few were immune.

Our analysis sets out the evidence demonstrating this combination of increased risk across multiple sectors and obstacles to due diligence, alongside the commercial pressures of trying to keep a business afloat in a time of unprecedented disruption to both demand and supply. It also reinforces the link between long and complex supply chains with limited visibility to businesses, exposure to commercial disruption and the vulnerability of workers to forced labour.

Together, all this has represented a huge challenge and a wake-up call for many businesses on the robustness of their supply chains. However, in these once-in-a-lifetime challenges might lie the seeds of a more effective approach to tackling modern slavery in supply chains.

Research commissioned by the Modern Slavery PEC showed that during the pandemic businesses became more aware of the importance of visibility over their full supply chains and any risks within them. This was for obvious, operational reasons – but it also has implications for efforts to address modern slavery.

Evidence suggests that some businesses have already started working on addressing these challenges, for example by moving towards the ‘localisation’ of their supply chains, shortening them and bringing suppliers closer to home to avoid future disruption, which has the potential to also decrease modern slavery risks.

It is in every business’s interest to take stock of the supply chain vulnerabilities that Covid-19 has highlighted and, in many cases, exacerbated, and to take steps to reduce these vulnerabilities ahead of potential future crises. Better visibility over supply chains, stronger relationships with suppliers and better risk management all make the business more resilient to future shocks, while at the same time reducing the vulnerability of workers to modern slavery. More visible, resilient supply chains are better for business and better for workers.

"More visible, resilient supply chains are better for business and better for workers."

Businesses should use this crisis to become more resilient and better safeguard against forced labour in the future.

Owain Johnstone is Partnership Manager at the Modern Slavery PEC. He is one of the authors of the briefing "Impact of the Covid-19
pandemic on modern slavery"
, including a special briefing for UK business leaders.