Following news reports of the risk of abuse within its supply chains, Nestlé commissioned Verité, a human rights organisation, to conduct an investigation into six of its production sites in Thailand. As instructed, Verité conducted a three month assessment into the risk of forced labour and trafficking within the recruitment, hiring, employment and living conditions of foreign migrant workers in Nestlé’s supply chain. The investigation was targeted specifically at the vessel-to-market place shrimp and fishmeal supply chain.

Verité found that there were in fact indicators of forced labour, trafficking and child labour within Nestlé’s supply chain. These indicators included deceptive recruitment practices, little or no employment protections for workers, restriction on the freedom of movement of workers and instances of both verbal and physical abuse.

Whilst Nestlé has publicly accepted the findings of the Report, Verité stresses that this is not a problem unique to Nestlé’s supply chain but rather, many of the problems highlighted in the Report are “systemic in nature” within the vulnerable migrant worker communities in Thailand. As such, part of the recommendations by Verité are aimed at encouraging governments to do more to tackle these systematic issues such as reviewing local legislation and regulation.

At a company level, however, what exactly can be done to prevent forced labour within supply chains, particularly where, as was the case here, supply chains are complex international structures with limited visibility? This is a question that many board rooms will be grappling with in 2016 following the enactment of the Modern Slavery Act earlier this year, which requires companies operating within the UK with an annual turnover of more than £36 million to publish a statement for each financial year setting out the steps it has taken to prevent slavery or forced labour in its business and supply chains or disclosing whether it has not taken any such steps. The first statements are due for financial years ending on or after 31 March 2016.

Verité makes a number of recommendations for Nestlé in its Report which we consider are likely to be useful for all companies considering what they can do to eradicate or prevent slavery or forced labour within their businesses or supply chains:

  • Ensure full visibility of supply chains.
  • Carry out a full risk assessment of supply chains.
  • Adopt a clear slavery and forced labour prevention policy and implementation program.
  • Set immediate, mid and long term goals for reducing any vulnerability to slavery or forced labour in collaboration with internal stakeholders.
  • Provide internal training on company policy.
  • Incorporate human rights performance criteria (KPIs) into screening and due-diligence processes for suppliers.
  • Provide supplier communication programs in order to ensure that the company’s policy is understood.
  • Adopt independent risk-based performance monitoring of supplier management of human rights abuses and establish clear business consequences for supplier sub-standard performance.
  • Require suppliers to demonstrate how they manage the risk of slavery and forced labour within their own businesses and supply chains.
  • Leverage opportunities to join forces with existing initiatives or partnerships with common suppliers, NGOs or governmental initiatives.

Nestlé has promised to implement the Report’s recommendations and to provide periodic public updates on its progress in stamping out forced labour. Pretty soon, it won’t be the only one.