Recent media and non-government organization (NGO) attention has cast light on how human trafficking and modern slavery issues remain prevalent around the world. The steady rise of environmental, social, and governance (ESG) regulations has amplified the urgency of establishing sound practices to support public disclosure requirements that address forced labor, supplier transparency, and ethical business conduct concerns. These regulations are influencing and shaping global supply chain and sourcing operations by placing a greater emphasis on social responsibility, due diligence, and fair labor practices.
With an estimated 49.6 million people experiencing modern slavery worldwide, governments are implementing increasingly stringent legislation to combat forced labor and human trafficking across global supply chains. For organizations operating internationally, understanding and complying with these diverse regulatory requirements is often difficult and complicated.
“The playing field of modern slavery legislation has evolved dramatically in recent years. What started as transparency requirements has shifted toward mandatory due diligence with real penalties for noncompliance.” – Ryan Lynch, Practice Director of Sustainability with BSI Consulting
Many types of modern slavery
Understanding modern slavery begins with recognizing the diverse forms it takes across global supply chains. Forced labor encompasses any work or service performed involuntarily under threat of penalty, including physical violence, detention, or other forms of coercion. However, exploitation takes many forms that businesses must understand to conduct effective due diligence and risk assessments, including:
- Debt bondage – workers trapped in cycles of debt as a result of unfair and exorbitant labor recruitment fees, often spanning generations.
- Child exploitation – the presence of children in the workplace under specific ages, prevalent especially in agriculture and manufacturing, as well as the sale or recruitment of children for armed conflict or hazardous work.
- State-imposed and prison labor – government-mandated work or prison labor programs under coercive conditions, often without fair compensation or choice.
- Human trafficking – the recruitment, transportation, or harboring of individuals through force, fraud, or coercion for labor exploitation.
Transparency’s move toward accountability
Regulations governing corporate responsibility for modern slavery risks have undergone a significant transformation. Early legislation focused primarily on transparency and disclosure, requiring companies to publish statements about their supply chain practices. Today's regulatory frameworks demand comprehensive human rights due diligence, with meaningful financial penalties and reputational consequences for organizations that fail to demonstrate adequate risk management programs.
This shift demonstrates that transparency alone cannot eliminate forced labor from global supply chains. Modern slavery legislation now requires that businesses not only actively identify risks but also take preventive measures, remediate violations, and publicly report their efforts, with verification mechanisms to ensure compliance.
What does this mean?
Whether you are sourcing raw materials from multiple countries, manufacturing products overseas, or managing complex supplier networks, modern slavery regulations likely affect your operations. The convergence of ESG reporting requirements, supply chain transparency laws, and mandatory due diligence regulations creates both compliance obligations and reputational risks that demand immediate attention.
Organizations must now juggle varying requirements across multiple jurisdictions while implementing cohesive risk management frameworks that address forced labor comprehensively. This includes establishing thorough supplier vetting processes, conducting regular supply chain audits, training procurement teams on identifying red flags, and developing remediation protocols when violations are discovered.
Understanding these requirements will help you create sustainable supply chains that respect human rights, protect vulnerable workers, and create lasting value.
Follow our modern slavery blog series, where we break down human rights compliance regulations across different jurisdictions and what they mean for your due diligence obligations.
Read BSI Consulting's e-book From policy to practice: Eradicating modern slavery, Fighting worker exploitation throughout global supply chains.
Watch Modern slavery, risks and solutions for sustainable supply chains.
