Embedding Modern Slavery Risk Assessment in Your Procurement Processes: A Pragmatic Approach

Modern slavery remains a critical issue that your business cannot afford to overlook. Even if you're not required to follow the legal compliance, it should be something that every procurement professionals sees as their responsibility. Every procurement professional should ensure that thier supply chains are free from exploitation and abuse. Integrating modern slavery risk assessment into procurement processes is not just a compliance requirement but a moral imperative.

Here's a pragmatic guide to actively embedding modern slavery risk assessment into your existing procurement framework.

1. Integrate Risk Assessment into Sourcing

a. Supplier Due Diligence: Begin by incorporating modern slavery risk assessments during the supplier sourcing phase. This involves conducting thorough due diligence on potential suppliers, focusing on their labour practices, workforce demographics, and regions of operation. Utilise publicly available data (start with the Global Slavery Index and/ or other third-party information) to gather comprehensive information.

b. Risk Mapping: Develop a risk map to identify high-risk areas within your supply chain. This involves analysing geographic, sector-specific, and supplier-specific risks. By understanding where the highest risks lie, you can prioritise your efforts and allocate resources more effectively.

2. Enhance Contract Management with Modern Slavery Clauses

a. Contractual Obligations: Embed specific clauses in supplier contracts that address modern slavery. These clauses should mandate compliance with your organisation's labour requirements, all relevant labour laws and international standards. Additionally, it's advisable to ensure that your suppliers provide you regular periodic reports on their labour practices (staff members and contract labour) and allow for deep-dive assessments or third-party audits.

b. Training and Awareness: Provide training to your contract managers on the importance of modern slavery risk assessment and how to effectively negotiate and enforce these clauses. This ensures that all parties understand the significance of these requirements and are committed to upholding them.

3. Integrate into Supplier Performance Management

a. Continuous Monitoring: Modern slavery risk assessment should be an ongoing process. Regularly monitor supplier performance through periodic supplier performance sessions and assessments, and feedback from your staff members or their personnel. Utilise tools like worker voice apps and anonymous reporting mechanisms to gather real-time data on labour conditions.

b. Performance Metrics: Incorporate modern slavery risk indicators into your supplier performance scorecards. These indicators should include compliance with labour laws, results of third-party audits, and feedback from (your and potentially their) staff surveys. Regularly review these metrics to identify any potential issues and take corrective action promptly. We strongly believe in "what get measured, gets done", ensuring that you're capturing potential non-compliance and introduce actions to remediate/ eliminate these.

4. Embed into Transactional Purchase to Pay Processes

a. Purchase Order (PO) Checks: Implement a checklist for modern slavery risk assessment as part of the purchase order process. This can be a simple confirmation - at PO confirmation stage - that the supplier complies with the required labour standards.

b. Payment Holds: Establish protocols to hold payments if there are any red flags related to modern slavery. This ensures that suppliers are held accountable and encourages them to address any issues promptly.

5. Leverage ESG Custodian for Better Oversight

a. Supply Chain Transparency Tools: Utilising ESG Custodian offers end-to-end supply chain transparency and traceability. Our ESG Custodian solution uses 25+ metrics to identify if a supplier has a modern slavery risk. It provides the ability for you to map your entire supply chain, identify high-risk areas, and monitor ongoing supplier compliance with modern slavery standards.

b. ESG Custodian: Embed ESG Custodian to identify patterns and anomalies in your supply chain that may indicate modern slavery risks. Our platform analyses organisational and transactional data, supplier performance metrics, and actively allows you to take actions, ensuring you can proactively address potential issues before they escalate.

Your Next Steps...

Embedding ESG Custodian in your organisation enables you to truly embed modern slavery risk assessment into your core procurement processes. Modern Slavery is a continuous and evolving effort. This article provides some pragmatic practices into sourcing, contract management, supplier performance management, and transactional processes, allowing you to create a robust framework that not only mitigates risk but also promotes ethical and sustainable business practices.

As a procurement professional, you have the power to drive significant change and ensure that your (global) supply chains are free from modern slavery. By taking these pragmatic steps, you can build more resilient, transparent, and ethical supply chains that reflect your commitment to human rights and social responsibility.

About the Author

Micha Veen is the founder of Unique Excellence, a consultancy specialising in sustainable supply chains. With over 20 years of global experience, Micha has guided numerous organisations toward ethical and sustainable growth through tailored procurement and supply chain strategies. His expertise includes supply chain innovation, ESG solutions (incl. ESG Custodian), and embedding modern slavery risk assessments in procurement processes. Connect with Micha on LinkedIn to learn more about creating resilient and ethical supply chains.