In the framework of global commerce, paragons of responsibility and ethics are not created in isolation. They are forged out of a collective dedication to transparency and a supply system that respects human dignity. The issue of forced human labor has remained an egregious stain on the fabric of international supply chains, compelling the global business community to seek genuine and lasting solutions. One angle presenting itself as a lever for change is the robust promotion of small, diverse businesses within these networks.

The Advocates for Transparency

Small businesses, particularly those which richly embody diversity, are placed uniquely at the forefront of the charge for a more transparent supply paradigm. Unlike their larger, more established counterparts, smaller businesses often operate without the layers of corporate bureaucracy that sometimes impede swift, comprehensive change. Consequently, they can act with the agility and decisiveness that larger corporations strive to emulate.

Navigating Red Tape

Conversely, small businesses face substantial challenges in establishing these initiatives. Regulatory compliance, technology investment, and the sheer balance of operating a small firm while pioneering significant changes can represent a heavy burden. Yet, these very challenges also serve as a catalyst, a wellspring from which innovative solutions are born, and a distinct competitive edge rooted in agility and adaptability emerges.

Fostering Economic Sustainability and Inclusion

The emphasis on integrating small diverse businesses into the global supply chain is not solely a matter of ethics; it's also a strategic economic imperative. By diversifying suppliers, companies mitigate risks associated with reliance on a single source or region and enhance their adaptability to global market fluctuations, which seem to be a "when" rather than "if" occurrence. Furthermore, this strategy fosters economic growth and sustainability in under-served communities, amplifying their voices and enabling them to stake a claim in the global marketplace. This approach not only cultivates a more resilient supply chain but also contributes to a more equitable and inclusive economic landscape.

Leveraging Technology for Greater Impact

In this digital era, technology plays a pivotal role in amplifying the reach and enhancing the efficiency of small, diverse businesses. From blockchain for ensuring transparency and traceability in the supply chain, to AI and machine learning for optimizing logistics and reducing costs, technology empowers these businesses to compete on a global scale. By adopting these technologies, small businesses can break down barriers to entry, increase their market visibility, and position themselves as indispensable links within the supply chain.

The drive towards supply chain transparency and inclusivity is multifaceted, requiring the collective effort of all stakeholders. Small diverse businesses, with their unique positioning and innovative approaches, are critical to this endeavor. By supporting these businesses, we pave the way for a supply chain that is not only ethical and transparent but also robust, dynamic, and inclusive.

The Collaborative Combat Against Forced Labor

Collaboration between small diverse suppliers and their larger counterparts is a beacon of light in the drive to rid supply chains of forced human labor, human trafficking, and the despicable industry of child sex exploitation that is tied to human trafficking worldwide. By synergizing value chains with enterprises that offer myriad perspectives, innovative methods for monitoring and vetting labor and manufacturing processes can be developed and implemented. Transparency here is cultivated not merely as an isolated corporate value but as a shared endeavor towards a communal vision of an ethical global economy.

“Modern slavery permeates every aspect of our society. It is woven through our clothes, lights up our electronics, and seasons our food. At its core, modern slavery is a manifestation of extreme inequality. It is a mirror held to power, reflecting who in any given society has it and who does not. Nowhere is this paradox more present than in our global economy through transnational supply chains,” said Founding Director of Walk Free, Grace Forrest.

Top 5 Industries with Ties to Forced Human Labor and Human Trafficking:

Consumer Electronics

Garments

Processed Food Products

Solar Panels

Other Textiles

The Global Slavery Index report highlights the role played by G20 nations in fueling forced labor within global supply chains, including state-imposed forced labor. The G20 accounts for over half of all people living in modern slavery and imports US$468 billion of at-risk products annually. The United States was by far the biggest importer of at-risk products (US$169.6 billion). Electronics remained the highest value at-risk product (US$243.6 billion), followed by garments (US$147.9 billion), palm oil (US$19.7 billion), solar panels (US$14.8 billion), and textiles (US$12.7 billion).

The report revealed six G20 nations are among the countries with the largest number of people in modern slavery, India (11 million), China (5.8 million), Russia (1.9 million), Indonesia (1.8 million), Türkiye (1.3 million) and the United States (1.1 million).

FLETF and The UFLPA Entity List - A Brief Background

The US' Forced Labor Enforcement Task Force (FLETF), tasked by the Department of Homeland Security (DHS) is a Task Force of inter-agency partners that are dedicated to monitoring the enforcement of the prohibition on importing goods made wholly or in part with forced labor into the United States. Forced labor includes the use of forced, convict, and indentured labor, including forced or indentured child labor.

The Uyghur Forced Labor Prevention Act, also known as the UFLPA, directs the FLETF to develop a strategy for supporting enforcement of the prohibition on the importation of goods into the United States manufactured wholly or in part with forced labor in the People's Republic of China, especially from the Xinjiang Uyghur Autonomous Region, or Xinjiang.

Ending forced labor is a moral, economic, and national security imperative. DHS and its FLETF partners remain steadfast in their duty to address the global challenge of prohibiting the importation of goods mined, produced, or manufactured wholly or in part with forced labor. Combating trade in goods produced with forced labor, including government-sponsored forced labor or convict labor, protects against unfair competition for compliant U.S. and international manufacturers and promotes American values of free and fair trade, the rule of law, and respect for human dignity.

Forced Human Labor and Human Trafficking in the Printer Hardware and Printer Cartridge Industry

A Chinese company called Ninestar was added to the UFLPA List last June by the FLETF, the body that enforces the US’ ban on importing goods made using forced labour in China and the Xinjiang Uyghur Autonomous Region in particular. Ninestar is one of the largest global manufacturers of remanufactured inkjet and toner cartridges, and their own OEM brand of printer hardware and consumables.

The FLETF claimed Ninestar was “working with the government of Xinjiang to recruit, transport, transfer, harbor or receive forced labor or Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups out of Xinjiang”.

An immediate embargo was executed, banning the import of any goods produced by the firm from entering the United States. However Ninestar products are still being sold online by e-commerce giants like Amazon and Newegg.

Ninestar is also the parent company for Lexmark, and has had ties with other OEM manufacturers like Xerox.

Late last summer, rather than follow the laid out path for Administrative Relief outlined by FLETF for removal off of the UFLPA List, Ninestar instead decided to sue the United States government in the Court of International Trade (CIT). This case has monumental implications when it comes to FLETF and their ability to actively monitor and prohibit products from entering the United States that have been produced through use of forced human labor and human trafficking. If Ninestar wins its case and achieves their removal from the UFLPA list, it will open up a floodgate of other companies facing the same charges by using the CIT to perpetuate the same outcome as Ninestar.

While it is imperative that the US government not fail, in a recent hearing in late February 2024, "The decision was based on an allegation from an informant, the judge said, as well as “[Chinese] government documents, Ninestar’s company documents, and media reports that corroborate that Ninestar is participating in the PRC [People’s Republic of China] government’s ‘poverty alleviation’ programs transferring laborers from ‘remote and underdeveloped areas’ to its facilities”.

The Practical Path Forward

Tangible steps for companies to enlist the aid of smaller suppliers in eradicating forced labor include stringent auditing, proactive dialogue on labor standards, and financial reciprocity that ensures the resources necessary for compliance. Here, technology plays a crucial role, with platforms for data sharing, remote monitoring, and collaborative learning facilitating robust and seamless integration of diverse, small suppliers into the ethical supply chain they aim to uphold.

While the most prevalent risks in supply chain are labor shortages, natural disasters, demand planning and cybersecurity, we cannot ignore ESG and must integrate ESG policies into supplier risk management too. In today's world, the call for corporate accountability is louder than ever. Companies must be prepared to track and share their ESG initiatives, not just to align with their organizational goals, but to satisfy the growing interest in non-financial metrics from stakeholders. More than ever, the focus is shifting towards a business's social, human, and environmental impact, indicating a broader purpose than just profit. Stakeholders now require detailed and measurable data in these areas to make informed strategic decisions.

According to an article by Deloitte, "To move from pledge to action, businesses must be functionally set up to respond to, and deal with, ESG-related opportunities, challenges and risks. At a practical level, this requires an operating model that facilitates visibility, accountability and collaboration among departments, across a clear governance structure."

Despite the growing awareness that we need to recognize and control threats to ESG, we can't ignore the vast possibilities opened up by the global shift to not just be more intentionally sustainable - but also be a more socially responsible and ethical global community. ESG uncovers chances to pinpoint and seize new avenues for value generation for organizations, while at the same time ensuring that we are being conscious of where we are sourcing our products from, but more importantly who is manufacturing them to we can truly have a more transparent supply chain.

Empowering Through Education and Resources

Central to forging an ethical supply chain that interweaves the strengths of small, diverse businesses is the empowerment through education and accessible resources. Initiatives that focus on equipping these enterprises with knowledge on compliance, ethical labor practices, and sustainability principles are paramount. Workshops, webinars, and mentorship programs foster a culture of informed decision-making and strategic planning among these businesses. Furthermore, providing tools and funding opportunities specifically designed to enhance operational standards and practices can significantly bolster their capabilities to meet—and exceed—ethical supply chain requirements.

Resources for Companies Looking to Eradicate Forced Human Labor and Human Trafficking from their Supply Chain

Responsible Sourcing Tool - RST's goal is to provide information and tools to support companies, federal contractors, federal procurement professionals, advocates, investors, consumers, and others in their efforts to prevent and address human trafficking, including forced labor, in global supply chains.

Walk Free - Through a combination of direct implementation, grassroots community engagement, and working in partnership with faiths, businesses, academics, NGOs, and governments around the world, Walk Free works to address slavery and dismantle its core drivers.

FRDM - FRDM's software uses your basic supplier data to map, monitor, and mitigate human rights & climate risks in your supply chain, allowing you to run a responsible and compliant supply chain in line with your company’s values.

The Mekong Club - The Mekong Club works with the private sector to bring about sustainable practices against modern slavery across the globe. Through these efforts, our mission is to inspire and engage the private sector to work together towards creating a slave-free world.

The Blue Campaign - Located within the DHS Center for Countering Human Trafficking, Blue Campaign leverages partnerships with the private sector, Non-Governmental Organizations (NGO), law enforcement, and state/local authorities to maximize national public engagement on anti-human trafficking efforts. Blue Campaign’s educational awareness objectives consists of two foundational elements, prevention of human trafficking and protection of exploited persons.

Building Community and Networking Opportunities

Another critical aspect in supporting the integration of small, diverse businesses into a transparent supply chain is creating robust networks and communities. Industry events, online forums, and collaborative projects offer platforms for these businesses to connect, share insights, and forge strategic partnerships. These interactions not only facilitate knowledge exchange but also stimulate innovation and co-creation of solutions to common challenges, including those related to labor practices and supply chain transparency. By nurturing a sense of community, stakeholders can create a concerted effort towards a shared goal of ethical sourcing and labor fairness.

Not sure where to start? Then check out the The Sustainable Purchasing Leadership Council. The SPLC is a global community of purchasers, suppliers, advocates, and experts dedicated to driving positive impact through the power of procurement. SPLC Members get access to their member community, a one-stop shop that consolidates guidance, case studies, webinars, contract language, tools, access to SPLC's Supplier Network and organizational resources relevant to each product and service category.

By focusing on empowerment, education, and community-building, the pathway towards a transparent and ethical supply chain becomes clearer. These efforts, combined with the strategic use of technology and collaboration, lay down the foundation for a global economy that champions diversity, integrity, and sustainability at every level of operation.

Leveraging Technology for Transparency and Efficiency

In the quest for ethical supply chains, technology emerges as a key ally, offering tools that transform aspirations into tangible realities. Advanced technologies like blockchain create immutable records of transactions, significantly reducing the opacity that often accompanies the movement of goods. Similarly, artificial intelligence (AI) and machine learning (ML) algorithms can predict supply chain disruptions and optimize operations for efficiency, while ensuring compliance with labor standards. These technological advancements not only streamline processes but also provide a level of surveillance that is both non-intrusive and effective.

The Role of Digital Platforms in Enhancing Visibility

Digital platforms have become indispensable in fostering transparency across the supply chain. Through such platforms, small, diverse businesses gain the visibility necessary to attract partnerships with larger entities, while also offering a transparent view into their operations. These platforms serve as bridges, connecting various stakeholders and facilitating the seamless flow of information. They allow for real-time monitoring of labor conditions, environmental impact assessments, and the tracking of products from origin to end-user.

Check out the below solutions providers below that help organizations reduce risks in supply chain, while optimizing spend using AI and analytics:

Scoutbee's AI-driven Intelligence Platform helps organizations identify and mitigate potential supplier risks with real-time insights.

Supplier.io believes that when supplier diversity and sustainability are treated as a priority instead of an add-on, we can build stronger businesses that better serve their communities and the planet.

EcoVadis' methodology is built on international sustainability standards, and their Sustainability Scorecard illustrates performance across 21 indicators in four themes: (1) Environment, (2) Labor & Human Rights, (3) Ethics and (4) Sustainable Procurement.

Call to Action: Towards an Ethical Future

The transformation towards an ethical supply chain is a collective journey that requires the commitment of every stakeholder involved. From small, diverse businesses to multinational corporations, from technology providers to regulators, and from consumers to activists, every participant plays a crucial role. By fostering collaboration, prioritizing education and community building, leveraging technology for greater transparency, and committing to sustainable innovations, we can create a supply chain that is not just efficient and transparent but also fair and sustainable.

The struggle against forced labor in the supply chain is an ongoing battle that requires sustained vigilance and innovative strategies. In the burgeoning community of stakeholders dedicated to this cause, diverse small businesses are not just mere participants but heralds of a new era in commercial ethics. Their vibrancy, their commitment, and their agility position them as potent agents of change, vital in dawning a future where transparency is the norm, and forced labor is relegated to the past.

The path forward is clear. By actively promoting the participation of small, diverse businesses in global supply chains, the potential for systemic change is immense. It is through concerted effort, shared goals, and mutual respect that we can achieve a global supply landscape that upholds the highest standards of ethics and integrity. This is more than a vision for the future; it is a blueprint for action that begins today.