This section outlines due diligence steps that companies can take to eliminate forced labour in their operations and supply chains. The described due diligence steps are aligned with the UN Guiding Principles on Business and Human Rights (UNGPs). Further information on UNGPs is provided in the ‘Key Human Rights Due Diligence Frameworks’ section below or in the Introduction.
While the below steps provide guidance on forced labour in particular, it is generally more resource-efficient for companies to ‘streamline’ their human rights due diligence processes by also identifying and addressing other relevant human rights issues (e.g. child labour, discrimination, freedom of association) at the same time.
Key Human Rights Due Diligence Frameworks
Several human rights frameworks describe the due diligence steps that businesses should ideally implement to address human rights issues, including forced labour. The primary framework is the UN Guiding Principles on Business and Human Rights (UNGPs). Launched in 2011, the UNGPs offer guidance on how to implement the United Nations “Protect, Respect and Remedy” Framework, which establishes the respective responsibilities of Governments and businesses — and where they intersect.
The UNGPs set out how companies, in meeting their responsibility to respect human rights, should put in place due diligence and other related policies and process, which include:
- A publicly available policy setting out the company’s commitment to respect human rights
- Assessment of any actual or potential adverse human rights impacts with which the company may be involved across its entire value chain
- Integration of the findings from their impact assessments into relevant internal functions/processes — and the taking of effective action to manage the same
- Tracking of the effectiveness of the company’s management actions
- Reporting on how the company is addressing its actual or potential adverse impacts
- Remediation of adverse impacts that the company has caused or contributed to
Additionally, the OECD Guidelines on Multinational Enterprises define the elements of responsible business conduct, including human and labour rights.
Another important reference document is the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration), which contains the most detailed guidance on due diligence as it pertains to labour rights. These instruments, articulating principles of responsible business conduct, draw on international standards enjoying widespread consensus.
Companies can seek specific guidance on this and other issues relating to international labour standards from the ILO Helpdesk for Business. The ILO Helpdesk assists company managers and workers who want to align their policies and practices with principles of international labour standards and build good industrial relations. It has a specific section on forced labour.
Additionally, the SME Compass offers guidance on the overall human rights due diligence process by taking businesses through five key due diligence phases. The SME Compass has been developed in particular to address the needs of SMEs but is freely available and can be used by other companies as well. The tool, available in English and German, is a joint project by the German Government’s Helpdesk on Business & Human Rights and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.
Develop a Policy Commitment on Forced Labour
As per the UNGPs, a human rights policy should be:
- “Approved at the most senior level” of the company
- “Informed by relevant internal and/or external expertise”
- Specific about company’s “human rights expectations of personnel, business partners and other parties directly linked to its operations, products or services”
- “Publicly available and communicated internally and externally to all personnel, business partners and other relevant parties”
- “Reflected in operational policies and procedures necessary to embed it throughout the business”
Benchmarking initiatives such as KnowTheChain show that many companies have over the years made progress in relation to their standards and procedures on forced labour. However, their 2020/2021 findings also show that the average score for ‘Commitment and Governance’, the theme that looks specifically at a company’s commitment to addressing forced labour, across companies of all sectors, is 55 out of 100.
Although some companies publish stand-alone forced labour policies — for example, Wilmar International, Aldi South Group and Hewlett Packard — it is more common for businesses to integrate forced labour into their human rights policies with M&S, Unilever and BHP offering some examples. Where companies do not have a stand-alone human rights policy, forced labour is often addressed in other documentation, such as a business code of conduct or ethics and/or a supplier code of conduct. Colgate, Carrefour and Danone are examples of companies that integrate forced labour requirements into their supplier codes of conduct.
The ILO Combating Forced Labour Handbook for Employers and Business includes additional, detailed recommendations on forced labour policy content and applicability. Businesses may also want to check the ILO Helpdesk for Business, which provides answers to the most common questions that businesses may encounter while developing their forced labour policies — or integrating forced labour commitments into other policy documents. Examples include:
- What companies can do to prevent forced labour?
- Is it OK for a company to withhold the passports of migrant workers working in their factory?
- Is it considered forced labour when workers receive only accommodation and food?
- Does compulsory overtime constitute forced labour?
Businesses may also consider aligning their policies with relevant industry-wide or cross-industry policy commitments, for example:
- ILO, Combating Forced Labour: A Handbook for Employers and Business: This guidance provides materials and tools for employers and business to strengthen their capacity to address the risk of forced labour and human trafficking in their own operations and in global supply chains, including advice on crafting company policy on forced labour.
- UN.GIFT, Human Trafficking and Business: Good Practices to Prevent and Combat Human Trafficking: A resource developed by the UN Global Initiative to Fight Human Trafficking and other stakeholders that explains what companies can do to take action against human trafficking. The guide provides advice on what to look out for when developing a policy on human trafficking, including integrating the policy into contracts with suppliers and business partners.
- Sedex and Verité, Supplier Workbook: Chapter 1.2 “Employment is Freely Chosen” includes suggestions on what companies should include in their policies on forced labour.
- United Nations Global Compact-OHCHR, A Guide for Business: How to Develop a Human Rights Policy: This guidance provides recommendations on how to develop a human rights policy and includes extracts from companies’ policies referencing forced labour.
- SME Compass: Provides advice on how to develop a human rights strategy and formulate a policy statement.
Assess Actual and Potential Forced Labour Impacts
The UNGPs note that impact assessments:
- Will vary in complexity depending on “the size of the business enterprise, the risk of severe human rights impacts, and the nature and context of its operations”
- Should cover impacts that the company may “cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships”
- Should involve “meaningful consultation with potentially affected groups and other relevant stakeholders” in addition to other sources of information such as audits
- Should be ongoing
Impact assessments should look at both actual and potential impacts, i.e. impacts that have already manifested or could manifest. This compares to risk assessment that would only look at potential impacts and may not satisfy all of the above criteria.
The ILO Combating Forced Labour Handbook for Employers and Business includes suggestions on how to identify and assess actual and potential forced labour impacts. In particular, forced labour impact assessments should consider the following:
- Forced labour takes many forms, particularly when dealing with vulnerable groups such as migrant workers or student apprentices.
- Assessments should consider conducting off-site interviews as workers may not be comfortable talking about forced labour indicators on-site.
- There is also an increasing trend of assessing risks of forced labour and other labour rights violations through “worker voice” tools, such as technology-enabled worker surveys.
Forced labour impact assessments are most often integrated into broader human rights impact assessments (for example Unilever, Freeport-McMoRan and Ajinomoto). The assessment of forced labour risks can also be incorporated into other internal risk assessments focused on evaluating potential impacts of company operations — see, for example, Danone, Glencore and Kellogg’s.
- ILO, Combating Forced Labour: A Handbook for Employers and Business: This guidance includes a checklist for enterprise-level impact assessments, including technical advice on how to conduct assessments.
- Global Compact Network Germany, Moderne Sklaverei und Arbeitsausbeutung: A German-language guidance note addressing modern slavery and labour exploitation.
- Global Business Coalition Against Human Trafficking (GBCAT), Resources for Suppliers: A toolkit aimed at helping companies that work in corporate supply chains quickly identify areas of their business that carry the highest risk of modern slavery and develop a simple plan to prevent and address any identified risks.
- IFC, CDC Group, EBRD, DFID, Ergon Associates and Ethical Trading Initiative, Managing Risks Associated with Modern Slavery: A Good Practice Note for the Private Sector: This resource provides detailed guidance on how companies can assess the risk of modern slavery in global supply chains. It provides considerations on workplace assessments, including what to look for on-site.
- Ethical Trading Initiative, Base Code Guidance: Modern Slavery: A detailed guide for businesses on assessing the actual and potential risk of forced labour in global supply chains.
- PRI, A Guide for Investor Engagement on Labour Practices in Agricultural Supply Chains: This guidance outlines a six-principle framework to assess potential and actual forced labour impacts in agricultural supply chains.
- Danish Centre Against Human Trafficking, Managing the Risk of Hidden Forced Labour: A Guide for Companies and Employers: This resource provides a do-it-yourself quick risk assessment and checklists in assessing forced labour risks in corporate supply chains.
- US Department of Labor, List of Goods Produced by Child Labour or Forced Labor: This list details forced labour risks in various goods and commodities, which can be used as qualitative data in risk and impact assessments.
- Walk Free, Global Slavery Index: Quantitative datasets covering prevalence, vulnerability and Government response to modern slavery.
- CSR Risk Check: A tool allowing companies to check which international CSR risks (including related to forced labour) businesses are exposed to and what can be done to manage them. The tool provides tailor-made information on the local human rights situation as well as environmental, social and governance issues. It allows users to filter by product/raw material and country of origin. The tool was developed by MVO Netherland; the German version is funded and implemented by the German Government’s Helpdesk on Business & Human Rights and UPJ.
- SME Compass: The Risk Assessment Tool provides practical guidance when rating and prioritizing risks after they have been identified.
Integrate and Take Action to Address Forced Labour Impacts
As per the UNGPs, effective integration requires that:
- “Responsibility for addressing [human rights] impacts is assigned to the appropriate level and function within the business enterprise” (e.g. senior leadership, executive and board level)
- “Internal decision-making, budget allocations and oversight processes enable effective responses to such impacts”
The ILO Combating Forced Labour Handbook for Employers and Business includes detailed measures on how companies can prevent or mitigate forced labour in their operations and supply chains.
The actions and systems that a company will need to apply will vary depending on the outcomes of its risk and impact assessments. Examples of such actions include training of company employees and suppliers and multi-stakeholder initiatives.
- Training of company employees and suppliers may cover forced labour laws, company policies and procedures to uncover hidden aspects of forced labour or modern slavery. Training can be delivered in a range of formats, such as online videos, e-learns, in-person sessions or supplier round tables. Coca-Cola, for example, conducts training on human rights (including forced labour) for employees, bottlers, suppliers and auditors. Another example is PepsiCo which conducts training for suppliers on PepsiCo’s Supplier Code of Conduct, which includes the prohibition of forced labour.
- Multi-stakeholder initiatives (MSIs) can provide the necessary expertise, guidance and economies of scale to address forced labour in a responsible, sector-specific way. Such MSIs can also help companies learn from different stakeholder groups including business, Government, civil society and inter-governmental and non-governmental organizations. Aldi South and Inditex are examples of companies that are taking action on forced labour in cotton supply chains through their membership in the Better Cotton Initiative (BCI). Brother Industries Ltd and Microsoft work on the protection of workers vulnerable to forced labour through their membership of the Responsible Business Alliance. The ILO Global Business Network on Forced Labour is another MSI that advances the business case for an end to forced labour. The network is aligned with Alliance 8.7 in aiming to achieve the SDG Target 8.7 of eradicating all forced labour by 2030.
- ILO, Combating Forced Labour: A Handbook for Employers and Business: This guidance has suggestions of how companies can prevent or mitigate forced labour in their operations and supply chains.
- ILO, Global Guidelines on the Prevention of Forced Labour Through Lifelong Learning and Skills Development Approaches: This guidance on developing forced labour training modules for employees and suppliers, including awareness-raising strategies to identify forced labour risks.
- Ethical Trading Initiative, Base Code Guidance: Modern Slavery: A detailed guide on actions that businesses can take to address forced labour in global supply chains.
- Sedex and Verité, Supplier Workbook: Chapter 1.2 “Employment is Freely Chosen” includes suggestions on how companies can address forced labour in their supply chains.
- The Consumer Goods Forum (CGF), Guidance on the Priority Industry Principles for the Implementation of the CGF Social Resolution on Forced Labour: These guidance notes provide advice on the practical action steps companies may take to implement the Priority Industry Principles designed to combat forced labour.
- SME Compass: Provides advice on how to take action on human rights by embedding them in your company, creating and implementing an action plan, and conducting a supplier review and capacity building.
Track Performance on Forced Labour
As per the UNGPs, tracking should:
- “Be based on appropriate qualitative and quantitative indicators”
- “Draw on feedback from both internal and external sources, including affected stakeholders” (e.g. through grievance mechanisms)
Businesses should regularly review their approach to forced labour to see if it continues to be effective and is having the desired impact.
Audits and social monitoring are common ways to check performance in the first tier of the supply chain. Such monitoring or audits can be undertaken internally by the company or a third party contracted by the company. A common approach or first step taken by companies is to issue self-assessment questionnaires (SAQs) to suppliers, requesting information and evidence on their forced labour procedures, such as whether suppliers have implemented monitoring measures to identify groups vulnerable to forced labour. Repeated SAQs can give insight into improvements in supplier management systems and let suppliers self-report on actual or potential forced labour impacts.
Where SAQ results warrant it, companies can carry out on-the-ground (or in the context of the COVID-19 pandemic) remote suppliers audits. Common supplier audit frameworks that span most industries and include forced labour indicators include SMETA audits and SA8000 accredited audits. General Mills, for example, conducts SMETA audits of its suppliers and co-packers.
The ILO Combating Forced Labour Handbook for Employers and Business provides advice on steps to consider in conducting social audits on forced labour (see Booklet 5). In addition, Booklet 4 ‘A Checklist & Guidance for Assessing Compliance’ presents a series of questions to help compliance personnel perform better forced labour assessments. Examples of questions to include in social audits or SAQs include:
- Do workers have the freedom to terminate employment (by means of notice of reasonable length) at any time without a penalty?
- Are non-cash or “in-kind” payments used as a means to create a state of dependency of the worker on the employer?
- Is there any evidence that disciplinary sanctions require or result in an obligation to work, for example through punishment for having participated in a strike?
- Are workers forced to work more overtime hours than allowed by national law or (where relevant) collective agreement, under the menace of a penalty?
- Is there evidence that employers who engage private employment agencies have taken measures to monitor such agencies and prevent abuses related to forced labour and human trafficking?
If shortcomings are identified, corrective action plans should be developed jointly with the supplier, setting out clear targets and milestones for improvement. Progress should then be tracked regularly to completion.
Setting SMART targets on forced labour helps objectively track performance. SMART targets are those that are: specific, measurable, attainable, resourced and time-bound. Examples of indicators to be recorded and monitored include:
- Forced labour grievances recorded (number and nature)
- Audit findings on forced labour
- Progress on Corrective Action Plans
- Media reports on instances of forced labour
- Official inspection outcomes
Responsibility for data collection should be clearly allocated to relevant roles within the company and reported with a set frequency (for instance once a month).
Although both SAQs and audits are commonly used by companies in various industries, both tools have limitations in their ability to uncover hidden violations, including forced labour. Unannounced audits somewhat mitigate this problem but even these are not always effective at identifying violations given that an auditor tends to spend only limited time on-site. Furthermore, human rights violations, including forced labour, often happen further down supply chains, whereas audits often only cover ‘Tier 1’ suppliers.
New tools such as technology-enabled worker surveys/‘worker voice’ tools allow real-time monitoring and partly remedy the problems of traditional audits. An increasing number of companies complement traditional audits with ‘worker voice’ surveys (e.g. Unilever and VF Corporation), which can be easily adapted to different languages to accommodate workers’ needs.
Some companies go further and adopt ‘beyond audit’ approaches, which are built on proactive collaboration with suppliers rather than on supplier monitoring (‘carrots’ rather than ‘sticks’). Collaborating with other stakeholders, including workers’ organizations, law enforcement authorities, labour inspectorates and non-governmental organizations to proactively identify, remediate and prevent forced labour can also prove to be effective in tracking performance on forced labour. Partnering with other stakeholders to design an effective monitoring mechanism will allow companies to better track progress.
- ILO, Combating Forced Labour: A Handbook for Employers and Business: This guidance has suggestions on how companies can track performance on forced labour in their operations and supply chains.
- IFC, CDC Group, EBRD, DFID, Ergon Associates and Ethical Trading Initiative, Managing Risks Associated with Modern Slavery — A Good Practice Note for the Private Sector: This resource provides the private sector with guidance on how to monitor progress on forced labour.
- Ethical Trading Initiative, Base Code Guidance: Modern Slavery: A detailed guide for businesses on eliminating forced labour in global supply chains.
- Sedex and Verité, Supplier Workbook: Chapter 1.2 “Employment is Freely Chosen” includes suggestions on how companies can monitor forced labour in their supply chains.
- SME Compass: Provides advice on how to measure human rights performance.
Communicate Performance on Forced Labour
As per the UNGPs, regular communications of performance should:
- “Be of a form and frequency that reflect an enterprise’s human rights impacts and that are accessible to its intended audiences”
- “Provide information that is sufficient to evaluate the adequacy of an enterprise’s response to the particular human rights impact involved”
- “Not pose risks to affected stakeholders, personnel or to legitimate requirements of commercial confidentiality”
As forced labour is a severe human rights violation, companies are expected to communicate their performance on forced labour in a formal public report, which can take the form of a standalone report such as Nestlé’s Responsible Sourcing of Seafood reports. More commonly, however, an update on progress with addressing forced labour risks is included in a broader sustainability or human rights report such as Unilever’s Human Rights reports, or in an annual Communication on Progress (CoP) in implementing the Ten Principles of the UN Global Compact. Additionally, other forms of communication may include in-person meetings, online dialogues and consultation with affected stakeholders.
Mandatory reporting now requires companies in certain jurisdictions to publish annual statements on modern slavery or identify forced labour risks in their supply chains. Hewlett Packard, Intel and Tesco are among the top performers of KnowTheChain 2020/2021 Benchmark and have communicated their performance on forced labour through their mandatory reporting requirements.
The ILO Combating Forced Labour Handbook for Employers and Business provides recommendations on how companies may want to communicate their activities to wider stakeholders, including through the Global Reporting Initiative (GRI) or the UN Global Compact.
- ILO, Combating Forced Labour: A Handbook for Employers and Business: This guidance has helpful recommendations on how to report forced labour approaches and results.
- Global Reporting Initiative, GRI409: Forced or Compulsory Labor 2016: GRI sets out the reporting requirements on forced labour for companies to achieve standard 409.
- GRI-Responsible Labour Initiative (RLI), Advancing Modern Slavery Reporting to Meet Stakeholder Expectations: This toolkit provides guidance for companies on due diligence reporting and measures related to modern slavery across the value chain.
- The Social Responsibility Alliance (SRA), The Slavery & Trafficking Risk Template (STRT): Free, open-source industry standard template used to assist companies in their efforts to comply with human trafficking and modern slavery legislation and improve their supply chain-related public disclosures.
- Social Accountability International, Measure & Improve Your Labor Standards Performance: This resource includes tools to help companies implement or improve performance on labour standards, including preventing forced labour in global supply chains.
- UNGP Reporting Framework: A short series of smart questions (‘Reporting Framework’), implementation guidance for reporting companies, and assurance guidance for internal auditors and external assurance providers.
- United Nations Global Compact, Communication on Progress (CoP): The CoP ensures further strengthening of corporate transparency and accountability, allowing companies to better track progress, inspire leadership, foster goal-setting and provide learning opportunities across the Ten Principles and SDGs.
- The Sustainability Code: A framework for reporting on non-financial performance that includes 20 criteria, including on human rights and employee rights.
- SME Compass: The Practical Guide on Target Group-Oriented Communication helps to identify stakeholders and find suitable communication formats and channels.
Remedy and Grievance Mechanisms
As per the UNGPs, remedy and grievance mechanisms should include the following considerations:
- “Where business enterprises identify that they have caused or contributed to adverse impacts, they should provide for or cooperate in their remediation through legitimate processes”.
- “Operational-level grievance mechanisms for those potentially impacted by the business enterprise’s activities can be one effective means of enabling remediation when they meet certain core criteria.”
To ensure their effectiveness, grievance mechanisms should be:
- Legitimate: “enabling trust from the stakeholder groups for whose use they are intended, and being accountable for the fair conduct of grievance processes”
- Accessible: “being known to all stakeholder groups for whose use they are intended, and providing adequate assistance for those who may face particular barriers to access”
- Predictable: “providing a clear and known procedure with an indicative time frame for each stage, and clarity on the types of process and outcome available and means of monitoring implementation”
- Equitable: “seeking to ensure that aggrieved parties have reasonable access to sources of information, advice and expertise necessary to engage in a grievance process on fair, informed and respectful terms”
- Transparent: “keeping parties to a grievance informed about its progress, and providing sufficient information about the mechanism’s performance to build confidence in its effectiveness and meet any public interest at stake”
- Rights-compatible: “ensuring that outcomes and remedies accord with internationally recognized human rights”
- A source of continuous learning: “drawing on relevant measures to identify lessons for improving the mechanism and preventing future grievances and harms”
- Based on engagement and dialogue: “consulting the stakeholder groups for whose use they are intended on their design and performance, and focusing on dialogue as the means to address and resolve grievances”
Grievance mechanisms can play an important role in helping to identify and remediate forced labour issues in operations and supply chains. Grievance mechanisms should be:
- Created with input from the affected groups they are intended to help
- Available in multiple formats and languages to accommodate workers’ needs. For instance, a high prevalence of migrant labour means a mechanism will need to be available in different languages, or illiteracy may require the mechanism to be explained to workers in a format other than writing (for example a video or presentation).
In addition to conventional grievance mechanisms operated through a hotline or online system, emerging “worker voice” technology allows workers to submit grievances in real-time through text messages and without fear of reprisal.
Forced labour is a crime under national and international law and remedial actions should involve cooperation with authorities. Other forced labour-focused remedial actions can include:
- Ensuring that freed workers receive enough support to reintegrate into society in a positive way, including providing shelter and medical support
- Assisting released forced labourers in finding alternative sources of income and employment, including providing training to help with re-employment, or providing support for placement into new positions
- Cooperation with third parties to remediate forced labour, including education officials, NGOs, public health officials and other companies using the same supply chain
Companies could use the results of impact assessments to determine corrective actions, with the most severe prioritized. Some companies may decide that — as a last resort — a failure to remediate or correct the situation should result in termination of relationship with the offending supplier. Examples of companies with forced labour remediation programmes include Unilever and Marks & Spencer.
- ILO, Combating Forced Labour: A Handbook for Employers and Business: This guidance has helpful recommendations on remediation actions and grievance mechanisms for businesses.
- Global Compact Network Australia (GCNA), Effective Modern Slavery Grievance Mechanisms: Publication Series: The GCNA has produced two publications designed to support business efforts to comply with the Australian Modern Slavery Act. The Case Study Report and the associated Guidance Note provide practical advice and outline good practice steps for designing and implementing effective grievance mechanisms.
- Global Compact Network Germany, Worth Listening: Understanding and Implementing Human Rights Grievance Management: A business guide intended to assist companies in designing effective human rights grievance mechanisms, including practical advice and case studies. Also available in German.
- Ethical Trading Initiative, Access to Remedy: Practical Guidance for Companies: This guidance explains key components of the mechanisms that allow workers to submit complaints and enable businesses to provide remedy.
- Ethical Trading Initiative, Base Code Guidance: Modern Slavery: A detailed guide for businesses on eliminating forced labour in global supply chains, including Step 3 “Mitigating risk of modern slavery and remediating workers affected by modern slavery”.
- SME Compass: The Practical Guide on Grievance Management outlines how to design grievance mechanisms following the UNGP effectiveness criteria and includes examples from companies.