Modern Slavery: The Dilemma of Internal Accountability and Resource Allocation
This is the third in a series of blogs by our Global Modern Slavery Team dealing with how companies can get ahead of the curve of the changing legal landscape addressing the role of business and its connection to modern slavery.
In our experience, issues of modern slavery often become a business concern because the media has brought attention to a specific human rights issue for a particular industry. In turn, someone at a company in that industry reads about the issue and then raises it internally. More and more of our clients are starting to worry about how they can avoid the associated reputational risks of being connected with this global crime.
However, when the need (or aspiration) to assess the impacts of modern slavery and human rights arises, the next issue companies face is marshaling internal resources to be ready to assess the multi-faceted issue of how modern slavery may impact its operations and what impact any avoidance measures may have on how the company does business. As noted in our second blog in this series, the expectations on business are changing irrespective of laws. Companies facing compliance with one or more modern slavery laws that do not begin to internally organize themselves and look at how they interact with modern slavery and other human rights issues may find themselves in a position of catch up - or worse, defense mode - as reputations are impacted and societal and investor pressures increase.
Ownership of a human rights strategy within a company is not always clear. Often HR, the Board or a separate CSR or sustainability function struggle to combine their thinking into a coherent strategy. Effective strategies can only be driven by action at the board level and upper management. However, it is also important to build a cross-functional team that can develop a strategy that blends engagement, compliance behavior and reward, and procurement with an understanding of a company’s human rights impacts and vulnerabilities. In our experience, in compiling the right team, organizations should (depending on their size) consider including:
Members of upper management to understand and guide overall company strategy
Operational team leads
Compliance to guide risk tolerance and assessment
Procurement for understanding supplier engagement and contracting
Environmental, safety and sustainability experts
Human resources, which can guide policy development
Marketing (or corporate communications manager) to help inform how a company presents itself to its stakeholders and to have a disaster plan ready to implement
CSR to help inform and integrate with operations
Legal, both external and in-house (likely in-house employment/health and safety and/or corporate counsel or counsel that supports compliance, procurement and labor/employment although many companies have in-house counsel for human rights)
All team members should buy-in and express a commitment to understanding human rights in the context of the company’s values and international human rights principles. If it’s best for a company, a smaller group could be composed to assess strategy and then be expanded, as needed, to include, build on and integrate with the other functions. Note however that the global human rights legal framework has failed to contain the crime of modern slavery. It is illegal everywhere, but is growing everywhere. This is, in part, why the emerging style of legal architecture is placing responsibility on the private sector. This trend will continue as more jurisdictions pass similar laws.
Once a team is identified, conducting an internal capability assessment - identifying and assessing quality and capability of existing resources and any gaps – is an important next step. What a company does not know is as important to understand as what it does know for establishing the next phase of activity. Stay tuned for our next blog: Developing an International Human Rights Strategy.