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October 23, 2013

Resource Addresses Human Trafficking in Corporate Supply Chains
    by Robert Kropp

The Know the Chain initiative, whose investor partners include the Interfaith Center on Corporate Responsibility and the Responsible Sourcing Network, seeks to document corporate compliance with California's new law governing human trafficking. -- The first edition of the Global Slavery Index was published this month by the Australian Walk Free Foundation, and it paints a sobering portrait of the prevalence of slavery in the modern world.

The Foundation's initial report finds that over 29 million people are currently living in conditions of modern slavery. Almost half the people living in slavery are in India, while Mauritania is ranked first with the highest proportion of its population enslaved.

However, “While Asia and Africa are home to the vast majority of modern slaves, no continent is free from modern slavery,” the Foundation states. “There are as many as four thousand people enslaved in the UK and more could be done to help them and prevent others suffering their fate.”

“It would be comforting to think that slavery is a relic of history, but it remains a scar on humanity on every continent,” Nick Grono, CEO of the Walk Free Foundation, said. “We now know that just ten countries are home to over three quarters of those trapped in modern slavery. These nations must be the focus of global efforts.”

In the US, which the Index describes as a prime destination for human trafficking, very strong measures on slavery policy contribute to its relatively low ranking. Overall, an estimated 3.78% of people living in slavery are in the Americas.

A nation with such a prevalence of multinational corporations as the US, however, does face considerable risks associated with human trafficking in corporate supply chains, an issue that California's Transparency in Supply Chains Act, enacted in 2012, seeks to address. The law requires retailers and manufacturers whose global revenue exceeds $100 million to publicly disclose their polices and practices relating to human trafficking in their supply chains.

The Know the Chain initiative was recently launched to promote greater transparency and dialogue relating to human trafficking in corporate supply chains. Its members, which include the Interfaith Center on Corporate Responsibility (ICCR) and the Responsible Sourcing Network (RSN), seeks to “assist companies in building ethical and fair supply chains free of forced labor and trafficking,” the initiative stated.

Researchers including Verite identified disclosures provided by companies that meet the criteria of the law, and Sustainalytics assisted in identifying additional companies that meet the criteria. Companies with posted statements addressing at least three of the law's five criteria are awarded with a check mark in Know the Chain's database.

Verite is a US-based non-governmental organization (NGO) that has been conducting workplace audits since the 1990s to ensure that people worldwide work under safe, fair, and legal working conditions. Headquartered in the Netherlands, Sustainalytics is a leading environmental, social, and corporate governance (ESG) investment research firm.

According to Free the Slaves (FTS), 350 out of the 500 companies evaluated by Know the Chain are in compliance with California's law.

“No consumer, investor or company should be connected to slavery,” says FTS Programs Director Karen Stauss. “When companies comply with the law, it is a first step toward improving corporate behavior because it gives consumers and investors the information they need to make choices. KnowTheChain is an important contribution to that process by telling us which companies are taking that first step of transparently disclosing what they are doing.”

“We are also seeking a federal law that will build on the California law by clearly defining the full extent of the product and labor supply chains,” Strauss continued.

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