Forced Labor in Supply Chains: The Problem Persists

“The addition of 11 Chinese companies to a U.S. trade blacklist of entities Washington says are linked to human-rights abuses of the Uighur minority group in Xinjiang is entangling major brands and likely to further a reordering of supply chains that feed American consumers,” write Dan Strumpf and Liza Lin in the Wall Street Journal. Here’s more from the article:

U.S. authorities on Monday [July 20] punished the suppliers—which include textile makers and component suppliers that sell products to major Western firms—by blocking them from buying U.S. technology without a license. Among those to have done business with the targeted manufacturers are Apple Inc. and clothing marquees Ralph Lauren Corp. and Tommy Hilfiger, according to a report this year by the Australian Strategic Policy Institute, a think tank based in Canberra.

The blacklistings illustrate the growing risks to U.S. companies with extensive and often opaque supply chains in China.

Earlier this month, also reported by the Wall Street Journal, U.S. Customs and Border Protection seized “nearly 13 tons of hair from a Chinese manufacturer [that] was part of a broader agency effort to clamp down on imports suspected of originating from forced labor in China’s Xinjiang region, where Muslims have faced mass detentions.”

“If we find out that you are knowingly importing goods into the United States using forced labor, there will be prosecutions,” Assistant Secretary of State Robert Destro said earlier this month.

How many slaves are in your supply chain?

I first asked that question in May 2013 following the collapse of a garment factory in Bangladesh that killed more than 1,100 workers and injured thousands of others. Three years later I wrote a follow-up post (“Still Don’t Know How Many Slaves Are In Your Supply Chain?”) that highlighted how laws aimed at solving the problem — such as the UK’s Modern Slavery Act and the California Transparency in Supply Chains Act of 2010 (TISCA) — were failing to make an impact due to poor compliance and enforcement.

And here we are now, more than 7 years after my first post on this topic, and the problem of forced labor in supply chains persists.

How many slaves are in your supply chain? Not knowing the answer is a symptom of poor supply chain visibility.

As I wrote in Can You Have Supply Chain Visibility Without Responsibility?, you can’t aspire to have end-to-end supply chain visibility, which is what every manufacturer and retailer wants in order to become more agile and responsive, without also accepting end-to-end responsibility. The scope of end-to-end supply chain visibility must go beyond the status of orders, shipments, and inventory — it must also include having timely, accurate, and complete visibility to labor, safety, environmental, and legal practices across the entire supply chain.

And as I wrote back in 2013: If you want to create socially responsible supply chains, you have to develop a more granular and detailed understanding of your supply chains. You have to improve the way you communicate and collaborate with your suppliers, especially lower-tiered ones. And most importantly, you can’t outsource the responsibility; the buck ultimately stops with you, the brand owner. You have to see and walk your supply chain, from start to finish, with your own eyes and feet.