Why is public procurement so critical in the fight to end modern slavery, forced labour and human trafficking?

Ruth Freedom Pojman and ETI's Cindy Berman reflect on the recent public sector supply chain conference.

How do you measure influence? How do you get ideas and values to stick?

Conferences on modern slavery, forced labour and human trafficking nowadays are not unusual. While some are arguably more useful than others, they all take a lot of effort to organise and then they’re over…

So how should we assess the value or impact of a one-day conference against our other efforts to prevent the criminal exploitation and abuse of workers in global supply chains? What indicators of success should we use?

The High-Level Conference to Prevent Modern Slavery, Forced Labour and Human Trafficking in Public Procurement Supply Chains held on 25th March in London aimed to achieve four things:

To drive improvements in the private sector organisations contracted by public bodies
To build a network of policy makers and procurement practitioners across governments, international, regional, local organisations and high-risk sectors
To identify common challenges and share expertise, promote learning and good practice amongst public bodies on how to manage and mitigate forced labour risks in public procurement.
To promote harmonisation of legal and policy frameworks to address forced labour in public procurement.

The conference was co-hosted by the Ethical Trading Initiative (ETI), the UK government and the Organisation for Security and Co-operation in Europe (OSCE), in partnership with the governments of Australia, Canada, New Zealand and the United States, the ILO and OECD

Key facts about the conference:

It was path-breaking - the first international conference to exclusively focus on addressing forced labour, human trafficking and modern slavery through public procurement.
Over 170 people attended - including ministers and senior government officials from eight countries, public bodies, procurement professionals, private sector companies, international organisations, trades unions, and civil society organisations. Some had little understanding of modern slavery, others were experts in the field.
It was dynamic and interactive – a mix of high-level panels, policy-level discussions and practical workshops. 99% of participants rated it as valuable, timely and strategic
It focused on four high-risk sectors – construction, health supplies, general manufacture and electronics.
It highlighted the importance of ‘getting your own house in order’ – changing the procurement systems of local, regional, municipal authorities, as well as governments and international organisations to be more ethical, responsible and transparent. It built upon years of prior work by the co-hosts of the conference in their efforts to develop legislation, policies and programmes, and importantly, the OSCE Model Guidelines on Government Measures to Prevent Trafficking for Labour Exploitation in Supply Chains
A critical driver for the conference was the Call to Action on Modern Slavery agreed a the UN General Assembly in 2016, and the high-level Commitments made by the five governments to Four Principles – including public procurement, responsible recruitment, engaging with the private sector and harmonisation.
The UK is undergoing a consultation on Social Value in Government Procurement. This, and the actions of other governments – particularly in Norway, Sweden and Finland are to be commended as they recognise the responsibility to recognise the importance of human rights and ethical social values to be embedded in public spending systems.

The documents from the conference can be found here.

What did we learn?

The public trusts governments to ensure that the money the public sector spends does not inadvertently support human trafficking or modern slavery. Government officials acknowledged that they have an opportunity and responsibility to leverage their considerable public sector buying power. Every government spends on average 15% of GDP on public procurement. That is trillions of pounds, euros and dollars.

Governments around the world can make a huge difference by ‘walking the talk’. They can model the actions and behaviour change they are demanding of companies, starting with the admission that no country or supply chain is immune from the problem, including their own. They can acknowledge that implementation of legislation and policies is difficult. They can reach out to other stakeholders to help address these complex problems more collaboratively with a view to tackling them in the long-term.

There are stories of real change: leadership shown by public authorities around the world, in different sectors and jurisdictions, shared their experiences, lessons and evidence of how changes in their public procurement systems can (and have) made a huge difference. Examples included: changing their eligibility requirements, contracting and monitoring procedures, and collaborating in purchasing consortia to reduce risks and drive improvements amongst their private sector suppliers.

What proposals were made?

A set of recommendations were proposed by conference participants that can be found in the Executive Summary of the Report. They include:

Governments should harmonise their laws, policies and regulations to meet international standards.

There is a strong basis for harmonised action and collective leadership: the Sustainable Development Goals - particularly 8.7, the UN Call to Action on Modern Slavery, the Four Principles Commitments made by the governments of Australia, Canada, New Zealand, the UK and USA, the OSCE, OECD, G20, G7, and others can make a huge difference in tackling these hidden, complex and challenging issues.

BUT we need to address the gap between policy and implementation.

Policies should be sensitive to sector-specific needs. Procurement contract provisions must be monitored and enforced.

Governments should have a zero-tolerance for non-action on forced labour, rather than a zero-tolerance approach to modern slavery and human trafficking that may drive practices underground.

This includes a focus on outcomes of actions for workers rather than activities themselves, and importantly access to remedy.

Company Codes of conduct are important because they give businesses a tool to support change. However, they cannot drive change on their own and must be complemented with other strategies, actions and partnerships.

Collaboration is key:

between the public and private sector
between procurement officials and other parts of the business
between procurement officials and modern slavery policy experts
within the private sector – recognising business models need to change
with trade unions and civil society organisations that represent the needs and interests of vulnerable workers

Transparency and open data sharingon best practices and expertise should be promoted across sectors, between businesses, civil society and government. Framework agreements in specific sectors could set common standards, including data sharing, which could be valuable in driving change up and down the supply chain.

Public buyers need to be more proactive in examining supply chains. Relevant procurement specialists need to be adequately trained on supply chain issues.

Price matters. Social value should be taken into account in the award of government contracts and the amount a company spends on due diligence in their supply chains.

More focus is needed on SMEs. They can be small but work on large contracts, or work at the lower end of supply chains.

Compliance requirements should be harmonized. New models should be explored to build common approaches to contracting with financial incentives and pressures to comply with requirements. This should reduce time and cost burdens, promote collaboration, and prevent duplication of compliance requirements (e.g. audits from every customer).

Procurement officials should have a zero-tolerance approach to inaction on forced labour, but be conscious of not driving practices underground. This includes a focus on remediation and outcomes for victims and at-risk vulnerable workers.

Cross-government procurement guidance and practical tools are needed to develop ethical and outcome-based procurement systems.

Businesses and clients should be encouraged to deliver and participate in training on modern slavery so they can better support procurement teams and other actors along the supply chain

What’s next?

Home Office Minister responsible for Modern Slavery, Victoria Atkins MP said at the conference, “We have an unparalleled opportunity to leverage this purchasing power to improve the standards in business and the outcomes for workers. We are doing more to leverage UK Government procurement spend and take responsibility for the conditions in our supply chains, but we need the global public and private sector to do the same if we are to succeed”.

There is a moment now for concerted action, and some great examples of leadership and action that are making a difference.

There is now a critical mass of international organisations, governments, public bodies, regional and local authorities, companies, civil society organisations, trade unions, media, academics and individuals taking action on this issue.

This is one of the key priorities for ETI’s work on modern slavery. We think it’s essential that efforts on modern slavery are not only taken by well-known brands and retailers. We need a level playing field to tackle these issues all the way along the supply chain – from the top down and the bottom up. We’re engaged in many parts of the world, in many sectors, working in partnership with businesses, governments, international organisations, trade unions, media and NGOs. We offer advice, training and support to public bodies and private sector suppliers that know they need to take action but need help.

Read the report to learn more about the conference.