2022 Wrapped: What trends are we seeing in supplier gaps?
In 2022 we assessed close to 200 of our clients’ suppliers for modern slavery risk in their operations and supply chains using our shallow and deep dive SAQ Self Assessment Questionnaire process. Suppliers provided a diverse range of goods and services, including explosives, construction materials, plant and equipment, medical technology, packaging, ICT components, security, shipping and logistics services, industrial robots and agricultural products to name a few. The majority of companies surveyed are based in Australia, with others based in North America, the EU, Asia-Pacific, Japan, China, West Asia, South America, Africa and the Middle East.
We identified more than 1,000 improvement recommendations across 200 suppliers and together with our clients developed Corrective Action Plans (CAPs) to address issues identified in the SAQs. We continue to work with procurement teams and our clients' suppliers to support the implementation of CAPs. We were surprised to find that several of the European-based respondents (including a number of Scandinavian companies) lacked the systems and processes to effectively manage modern slavery risk, despite the maturity of business and human rights regulations in the EU.
Some of the most common issues we identified in our assessments included:
Board/SLT engagement – Limited enagagement of Boards and Senior Leadership Teams indicates a possible lack of commitment and accountability at executive levels (Takeaway: encourage and verify high-level ELT/SLT commitment and support)
Stand-alone modern slavery policies – Most respondents did not have a standalone modern slavery policy or do not reference the issue in internal codes and policies (including whistleblower policies) or supplier Codes of Conduct. (Takeaway: encourage development of a stand alone modern slavery/human rights policy and/or ensure integration with other relevant documents)
Enforcement of policies – Assumptions that signing off on contract requirements and/or supplier codes of conduct equals conformance. When asked ‘how’ modern slavery policies are being enforced responses were vague or left blank (Takeaway: a policy that is not being monitored or enforced is simply words on paper. Ensure ongoing assessment and verfication of compliance)
Lack of evidence of actions – Few respondents provided tangible (or any) evidence to substantiate actions they claim to be taking to address modern slavery risk in their operations or supply chains. (Takeaway: do not take claims at face value and request tangible proof of how risks are being managed and assessed against effectiveness indicators)
Dedicated modern slavery training – less than 5% of our clients' suppliers deliver dedicated modern slavery training to staff. Broad modern slavery information may be included in staff induction and onboarding processes, generally referencing a paragraph in the company's code of conduct. None of the suppliers are actively engaging their suppliers on modern slavery risk management opportunities (Takeaway: deliver standalone modern slavery training at least annually and enhance your suppliers' understanding of the issue also)
Remedy pathways – Very few suppliers have a formal remedy policies or processes in place to address the impact of modern slavery on victims. Grievance mechanisms are generally limited to email addresses or in-house communication and are largely inaccessible to stakeholders outside the organisation (Takeaway: encourage suppliers to review grievance mechanisms and remedy processes against the requirements of the UNGPs and ensure processes are documented and effectively communicated)
