Businesses must be more aware of human trafficking risks

Companies face more scrutiny, greater reputational risk than ever

International businesses face a great deal of risk, especially up and down their supply chains. Compliance with labor laws, trade restrictions and more give legal departments a lot to consider as they advise business departments on risk and reward. But, increasingly, there is one area that is becoming the focus of great scrutiny and growing risk: human trafficking.

One state that has taken the lead in regulating human trafficking is California, which passed The Transparency Act. It has been in effect for two years now, and companies with revenue more than $100 million that do business in the state have been the subject of a yearly report on their compliance in relation to human trafficking.

Many companies already have supply chain related black marks on their records, such as Apple, which has faced a firestorm of controversy surrounding its manufacturing plants in China. Because of this reputational risk, many companies have opted to investigate their supply chains more closely and to implement strict codes of conduct up and down the chain.

According to The Wall Street Journal, human trafficking concerns have led supermarket giant Safeway to reexamine its supply chain. It implemented a policy of thoroughly checking its suppliers and validating their policies and procedures. The company has thousands of suppliers across the globe, and certain areas of the world require closer examination than others. In addition, supply chains are constantly in flux, so the company must take steps to ensure that it keeps up to date with any and all changes.

Human trafficking is a real and serious problem in the world, and one that is now becoming a real concern for big businesses. With laws like the one in California bringing the issue to light and companies investing time and money in dealing with the problem, it may someday become a thing of the past.


For related stories, check out the following:

Supply chain management’s impact on corporate reputation

Former Siemens executives face more bribery charges

Apple updates compliance figures on supply chain partners


Senior Editor and Community Manager

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Rich Steeves

Richard P. Steeves is Senior Editor and Community Manager of InsideCounsel magazine, where he covers the intellectual property and compliance beats. Rich earned a B.A....

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