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Supply Chain Due Diligence: Why Transparency Is Critical to Forced Labor Regulation

Forced labor is a hidden problem within every one of our shared global supply chains. Whether we want to believe it or not, it’s sadly the truth; people are coerced every day to pick, sew, mine, farm, and labor so that we have the things that we want. The root of the problem might be poverty, the climate crisis forcing migration, or caste-based discrimination. Whatever has led to someone being trapped in forced labor, the outcome is the same: their human rights have been stripped away. The majority of supply chain stakeholders don’t want this to be the case and want to find ways to stop it. Forced labor legislation is helping them do this, but transparency isn’t yet playing a big enough role in these efforts to help shift the needle in the way that we know it can. This blog takes a look at the scale of the overarching problem, the legislative landscape, why we know more can be achieved with true transparency, and highlights some example datasets that might be of help to anyone working in this field. 

Forced Labor in Supply Chains — What Is It?

When the team at Open Supply Hub is telling the story about why we exist, we often cite the egregious harms that go on within supply chains as the anchoring need for supply chain transparency and accountability. We list out some of those harms, frequently referring to issues such as forced labor, child labor, human trafficking, and bonded labor. The nuance between each of these terms is subtle but important (see Walk Free’s useful terminology guide). They all fall under the umbrella of modern slavery, which also includes issues that fall outside of the purview of Open Supply Hub, like early and forced marriage.

This blog zooms in on forced labor, which is defined by the International Labour Organization (ILO) as “all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily” (Forced Labour Convention, 1930 (No.29)).

Forced Labor — The Scale of the Problem

According to Anti-Slavery International, 63% of the 27.6 million people trapped in forced labor worldwide are exploited within the private economy. That’s 17.3 million people in privately owned supply chains (with a further 3.9 million subjected to state-imposed forced labor). That’s equivalent to the entire population of Ecuador, 1 in every 455 people globally, or enough people to fill 230 large cruise ships. Trapped and forced to make the things we all depend on every day—mining cobalt for our phones or farming cotton for our clothes. 

Forced labor often occurs in industries with a high number of informal workers or little to no regulation—including agriculture and fishing; construction, mining, quarrying, and brick kilns; market trading; and manufacturing, processing, and packaging. It disproportionately affects the most vulnerable people, such as children, people living in poverty, those experiencing caste discrimination, migrant workers, and others.

Silhouettes of a few constructions workers laboring on the foundational parts of the building in the sun making the sky light yellow

Supply Chain Due Diligence — Tackling Forced Labor with Law

The past decade has seen an acceleration in the introduction of levers to try and tackle the scale of the forced labor problem. Starting with voluntary mechanisms like Sustainable Development Goal 8, UN Guiding Principles on Business & Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct, all the way through to a swathe of mandatory legislation passed and enacted by governments around the world. This ranges from: 

  • Issue-specific legislation, such as UK’s Modern Slavery Act, the US’s Uyghur Forced Labor Prevention Act, the Dutch Child Labor Due Diligence Law, Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act, the EU’s Forced Labour Ban and India’s Bonded Labour System (Abolition) Act)
  • To broader legislation that includes forced labor—notably the EU’s Corporate Sustainability Due Diligence Directive as well as France’s Duty of Vigilance Law, and Germany’s Supply Chain Due Diligence Act. 
  • Alternative approaches like the Government of Brazil’s Cadastro de Empregadores (Register of Employers) using slave labor, widely known as the Lista Suja (Dirty List – see the list on Open Supply Hub). 

Supply Chain Transparency and Legislation

The one thing that aligns each of these government-led approaches is a reference to transparency and the disclosure of information. Whether that’s: 

  • Publicly and transparently reporting on your policies, identified risks, and mitigation measures 
  • Providing transparent documentation to overcome presumption of forced labor 
  • Providing public registers of information 

But much of this transparency doesn’t actually get to the heart of the problem—transparently saying you have a policy doesn’t mean that it’s a good policy; transparently acknowledging high risk in certain countries doesn’t mean your mitigation measures are working; or transparently adding your annual report to a government registry doesn’t stop forced labor from occurring.

As an organization founded on the power of true transparency, we hear the term used a lot. But the trick is identifying when it’s being used to truly shift the needle versus when it’s being used to just tick boxes. We often hear groups talk about being transparent with one another, but when that takes place behind closed doors and without every stakeholder group in the room, the impact of that transparency is massively reduced. Because you can be transparent with one another in many ways—that identifying forced labor is hard, that you don’t have the systems in place to truly detect it, that you’ve found 50 cases in the past year, or that your leadership team isn’t taking it seriously. But then what? You’ve shared transparently, but you don’t have the right people in the room to take the next step and drive the necessary change. 

“…if it’s not open and accessible to all, it’s not transparent. If you can’t be fact-checked by an independent third party, it’s not transparent. If a brand asks for a supplier to share information with them and them alone, which is then uploaded into a closed service provider’s database? That’s sharing data, that’s not transparency.” Natalie Grillon, CEO of Open Supply Hub 

For me, the true magic of what transparency can do lies in this definition: ‘the quality of allowing light to pass through so that objects behind can be distinctly seen’. Of course, this relates to a transparent object, but it’s also perfect for transparent supply chains. Because if we can see into them—truly see into them by openly mapping all the parts—then we can distinctly start to see the people behind them. And that’s truly what’s needed to identify, remediate, and prevent forced labor from happening: being able to see those people. How? By sharing data freely and openly to facilitate collaboration, accountability, intelligence, and investment. By giving everyone a seat at the table through a common set of information and a shared starting point. 

So What Does OS Hub Do For Supply Chain Transparency? 

Open Supply Hub is not an advocacy organization. It’s not for us to advocate for true transparency to be written into legislation—so many of our amazing peers are already doing that. What we can do, however, is show that transparently and openly mapping your supply chain is foundational to conducting effective and impactful due diligence, and to make it as easy as possible to do so. Which is, in turn, foundational for ending forced labor. Why? Because it helps:

  • Stakeholders visualize their supply chain and see where they’re sourcing from—this can help to spot where the risks of forced labor might be when you look at the map alongside geographical hotspots for migrant workers, child labor, trafficking corridors, etc.
  • Stakeholders connect with others who overlap with their supply chain to initiate collaboration—around remediation, grievance mechanisms, training, and more.
  • Civil society connect with buyers and pass on on-the-ground intelligence about what’s going on in their supply chain. What once felt daunting and risky is now an invaluable part of building the complete picture of your supply chain. 

Open Supply Hub is increasingly joining conversations about forced labor and supply chains as recognition grows that data in general, and transparent data in particular, is a core component of the solution. When we have a seat at the table, we can represent every stakeholder in supply chains and make sure that transparency truly means transparency. 

Take a look at some of the helpful resources that have emerged from these conversations: 

And here are a few data contributors whose datasets might be of use to anyone working on forced labor in global supply chains: 

Learn more about Open Supply Hub or explore other stories on the Open Supply Hub blog.

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