While there is a recognition that human rights abuses exist in supply chains, the focus now should be to encourage trust in remediation measures. Ian Welsh reflects on Innovation Forum’s recent ethical trade and human rights events.
What was clear from the recent Innovation Forum conferences is that, inevitably, the coronavirus pandemic is impacting everything, but is really bringing critical human rights issues to the fore. What’s going to be interesting is which businesses emerge in good shape. The companies that have been doing the right thing with their operations and supply chains will surely be best placed to take advantage of economic upturn when it comes.
There was a clear consensus during that for business to do that, transparency must be a watchword. Trust is essential and transparency is how to achieve this. There were many conversations where transparency was discussed as the effective entry point into addressing and driving systemic change. And, technology can really help companies seek out and disclose operations and supply chain data. But, there’s a caveat: disclosure for disclosure’s sake is a fool’s errand. So, it’s about identifying and disclosing material data.
From crises come innovation and auditing does seem to be one area where there are some interesting technological advances. But remote auditing, for example, raises risks around transparency and of a shift backwards to a tick-box audit process. On the other hand, there appears to be a dash to the realisation that using technology can also really help audit information sharing.
It’s important to not lose sight of the fact that a sign of progress is finding more incidences of human rights abuses, as they are there without a doubt. For example, Samsung has recently identified human rights abuses in a Malaysian supply chain.
The way that that business had been transparent about the problem and got to grips with remediation was one of the reasons for Samsung’s second place ranking in the recently published Know the Chain benchmark on the IT sector.
Environmental issues have typically had more attention than human rights issues. However, there is a movement towards trying to bring the issues together. Climate change is potentially the biggest human rights issue around, and those likely to be most affected are those least able to cope with the challenges.
Another clear point that emerged was that accountability is an ever-more important issue. Companies need to establish who is accountable for human rights within the business and support that individual with the resources necessary.
Siloes remain and all too often there is still a disconnect between whoever is responsible for supply chain ethics and sustainability and those involved in the economic drivers in the business, in procurement or other company profit centres. Companies in turn must be held to account – and that’s a clear role of government that too often is lacking.
Resource allocation, and how to gauge the right level of engagement with suppliers is also a key challenge. Finding the level that is beyond simple compliance – and is the most impactful with the available resources – is not easy to gauge.
It’s important to keep a close eye on the legislative landscape. While changes may not impact a business right now, depending where it is in the value chain it could well be that customers will be asking for compliance down the line.
In many cases there is not a need for new rules or regulations, simply enforcement of existing rules. And undoubtedly the shift to due diligence on human rights from a disclosure approach is essential to shift the dial.
Technology is the key to so much of the necessary engagement, and its impact potential is huge. But there are significant hurdles to overcome. Collecting data that is relevant and comparable is vital and ability of suppliers to do so is also an essential consideration. Perhaps, then, it is here where the real potential for business to get ahead lies, particularly as the acute impacts of Covid-19 ease.