In a global market, determining product and part origin is increasingly difficult. With a global network of international trade; complex goods with many parts and/or ingredients; and multiple layers of sub-suppliers; the supply chain is increasingly complex and difficult to track with the end-product often being far across the globe from where components were made. Even with these complexities, there is one aspect of the supply chain that we cannot let slip through the cracks -- ensuring humane treatment of labor throughout your supply chain. Unfortunately, today in multiple regions around the globe human rights violations are still commonplace. These violations can include unfair wages, poor working conditions, child labor, and slavery and manufacturers need to do their part to ensure their business does not support these inhumane practices.
Recent Human Rights Legislation & Initiatives
Many countries are proactively in the process of trying to combat human rights violations occurring across global supply chains. These initiatives display an increasing urgency legislators are taking in holding companies accountable for non-compliance. For companies, making this a key priority of focus is important with recent developments in supply chain compliance legislation.
Withhold Release Orders
As of January 13, 2021 the US Customs and Border Protection issued a Withhold Release Order (WRO) against both cotton and tomato products produced in Xinjiang due to the agency identification of forced labor indicators. You can find all US CBP Withhold Release Orders and Findings here.
Uyghur Forced Labor Disclosure Act
This bill is currently pending in the US Senate. The Uyghur Forced Labor Disclosure Act would require publicly listed US companies to audit and disclose information on manufactured goods and materials originating from the Xinjian region of China on whether they were from forced labor camps.
Uyghur Forced Labor Prevention Act
A proposal for the Uyghur Forced Labor Prevention Act was reintroduced on January 27, 2021 and is still currently pending in the US Senate. This bill would enact restrictions to goods manufactured and produced in the Xinjiang region of China, stating that all labor in the region would be considered forced labor. It would also impose required reporting for security issuers with the Securities Exchange Commission to disclose information related to the region.
Modern Slavery Act
Last year the UK announced measures to strengthen the current Modern Slavery Act (2015). Companies with budgets of £36 million (or more) are required to report on measures they’re taking to prevent modern slavery throughout their supply chain. The new strengthened initiative is tailored to bring more transparency across the public sector. These measures will also include civil penalties for non-compliance through a single enforcement body that helps protect vulnerable employees.
EU: Due Diligence Proposal
The European Union Commissioner for Justice announced in 2020 a plan to submit a due diligence proposal on human rights impacts on supply chains sometime in 2021. This proposal would require companies to take various due diligence measures across their supply chain, including checking for human rights violations. Recent pushback has moved the proposal to later this year, sometime after the summer of 2021.
Germany: Due Diligence Act
The German government has put forth and adopted a drafted “Supply Chain Act” requiring companies to conduct international supply chain due diligence of human rights violations. If fully passed it’s likely to go into full effect in 2023. With this law, German companies would be held to standards of preventing human rights & environmental abuses across their supply chain.
How can Toxnot Help?
One way to help tackle this issue is to survey your suppliers for information that specifically targets human rights topics. As always, Toxnot supports flexible and customizable survey questionnaires for your suppliers, and this functionality can be tailored to support human rights objectives or discovering issues in your supply chain. Below we discuss methodologies that users on Toxnot can use this functionality to survey their supply chain to support their respective goals.
Step 1: Create a custom questionnaire. Ask the right questions to make sure your supply chain is treating workers equitably. Here are some topics to include with sample questions to ask.
- When and how frequently are workers paid?
- Is it possible to withhold part or all the wages an employee makes?
- How is overtime identified and paid?
- What are the starting, median, and average wages?
- Do your workers have complete freedom of movement outside of the workplace when they are not working?
- Do you withhold any personal documents from a worker during the time of their contract?
- Do you utilize labor agents?
- In the past year, have any of your workers been injured during their working hours?
- How many incidents?
- What was/were the cause(s)?
- What processes do you have set in place to ensure a healthy recovery?
- Do you have clearly defined exits in the event of a fire or need for evacuation?
- Do you regularly monitor water quality and ensure cleanliness of your workplace environment?
Child Labor and Women’s Rights
- Do you verify the age of your workers? If so, how?
- How do you ensure there is no discrimination of women at your company?
- In the event of a woman reporting harassment, intimidation, or violence, what actions do you take?
- Does any labor come from troubled regions known for human rights violations?
- For more information on areas to avoid sourcing labor from, here is the 2019 International Trade Union Conference Global Rights Index
- Do you have a code of conduct?
- Do you ask each one of your employees to acknowledge they have reviewed your code of conduct?
- Do you consider human rights accountability when making purchasing decisions?
- Do your employees have free access to a human resources department?
Step 2: Send supplier surveys with your questionnaire. The Step by Step: Creating a Supplier Survey explains how you can create a survey to send to your suppliers. Once you have a survey that you are comfortable with, it is time to make a human rights focused custom questionnaire to add to your survey.
Step 3: Gather results and check for quality. While asking for these questions, you can also make your questionnaire require disclosure documentation to prove that these questions are being answered with integrity. According to the California Supply Chain Transparency Act (SB657), proof can include disclosure statements from your suppliers that state to what extent, if any, it does the following: verification, audits, certifications, accountability, and training to ensure human rights violations are not occurring. Follow-up questions, which are a Toxnot functionality, are suggested to gather greater detail on answers and can prompt suppliers for documentation or other measures of proof to support their responses.
Step 4: Take action. Evaluate the responses to find issues, but also look for inconsistencies, and request more information regarding suspicious or vague responses. If you discover human rights violations, weigh your options to correct the issue or look for alternative suppliers. If you have found violations in your supply chain, you can report them to the United Nations through the UN Code of Conduct for Multinational Corporations.
At Toxnot, we support our users in developing customized surveys such as for human rights, so don’t hesitate to ask us for assistance or get started for free on the Toxnot platform today. Together, let’s work to make sure our supply chains are safe and equitable for all of those involved.