Step 2: Assess Risks and Impacts

Header Photo Credit: Pixabay_Pexels

Key Points

With the passage of an increasing number of mandatory human rights due diligence laws, such as those prompted by the EU’s Corporate Sustainability Due Diligence Directive, companies have new legal obligations to assess and address risk and abuses in their supply chains.

As one aspect of an effective supply chain risk assessment, companies should understand their full supply chain and be aware of practices of first, second, third, and other tier suppliers, in upstream supply chains, as well as practices of agents, vendors, or contractors.

Any company-led risk and impact assessment process should begin with a thorough examination of a company’s internal processes and practices and the ways in which it may be causing—or is at risk of causing—labor abuses.

Company activities can exacerbate risks of labor abuses, and may also contribute to social conflicts, resulting from, for example, wealth imbalances, unequal distribution of royalties, land-access issues, increased presence of security forces and involvement of illicit actors.

Supply-chain mapping must identify where risks of labor abuses lie.

Workers are key resources in establishing systems to address risk. Workers’ unique insights and experiences must be considered as primary sources of information.

The following Key Topics further explain how a company can conduct a risk assessment:
 

Key Topics

• Gather Assessment Information on Risk of Labor Abusers

  

• Identify Risks

  

• Integrate Worker Feedback

  

• Systematize Data Collection

  

• Migrant Worker Tools and Resources

  

Examples in Action

• Technology to Survey Migrant Workers

  

  Companies and civil society groups are increasingly turning to digital platforms as a tool to communicate with migrant workers. Some applications provide workers with peer-to-peer information-sharing and information regarding support services.

  Read more about Technology to Empower Migrant Workers

• Examples of platforms that also facilitate communication with migrant workers include: 

  

  Worker Connect is a communications platform from TechSoup.* It allows workers to anonymously share feedback with companies, provides workers with information on labor laws, and gives labor due diligence professionals information to identify and address code of conduct risks and violations.

  Read more about ILAB’s Global Trace Protocol Project Works Toward Cotton Supply Chain Accountability

• The Role of Media in Raising Awareness of Foreign Labor Abuses 

  

  Global media outlets have generated headlines with their reporting on foreign labor abuses in a variety of activities, including in agriculture in Mexico, on fishing vessels throughout Southeast Asia, in India’s brick kilns, in cobalt mining in the Democratic Republic of the Congo, in construction work in the Middle East, and in mica mining, among others.

  Read more about The Role of Media in Raising Awareness of Child Labor and Forced Labor

• Hewlett-Packard Enterprise's (HPE) Approach to Assessing Risks Through Its Supply Chain Responsibility Program

  

  Since 2001, Hewlett-Packard Enterprise (HPE), a large U.S. multinational information technology company, has sought to retain a stable, high-quality supply chain with trusted partners through its Supply Chain Responsibility program.

  Read more about Hewlett-Packard Enterprise's (HPE) Approach to Assessing Risks Through Its Supply Chain Responsibility Program

• USG Efforts to Trace Exploitation in Seafood Supply Chains

  

  Forced and child labor are used to catch, farm and process fish and seafood around the world. Connections with illegal, unreported, and unregulated (IUU) fishing and the isolated nature of work in distant-water fishing present challenges to criminal and civil labor law enforcement.

  Read more about USG Efforts to Trace Exploitation in Seafood Supply Chains

• Ethical Recruitment Agencies

  

  There are a number of migrant worker recruitment agencies that aim to capitalize on growing private sector demand for labor standard compliant migrant worker recruitment, which in turn reduces exploitation in the overseas labor recruitment sector. 

  Read more about Ethical Recruitment Agencies

Further Resources

1. Better Buying. About Purchasing Practices. [Online, accessed February 18, 2022]; available from https://betterbuying.org/about-purchasing-practices/. 

2. https://www.fairrecruitmenthub.org/sites/default/files/2022-03/wcms_817166.pdf.

3. Development Finance Corporation. Environmental and Social Policy and Procedures. January 2020; available from https://www.dfc.gov/sites/default/files/media/documents/DFC_ESPP_012020.pdf.

4. http://helpwanted.verite.org/helpwanted/toolkit.

5. Business & Human Rights Resource Centre, Business, Conflict & Peace Portal; available from http://www.business-humanrights.org/ConflictPeacePortal/Home. 

6. Internal Displacement Monitoring Centre. Global Report on Internal Displacement 2021; available from https://www.internal-displacement.org/global-report/grid2021/.

7. "Perspectives on Information Management in Sustainable Supply Chains." https://www.bsr.org/en/our-insights/report-view/perspectives-on-information-management-in-sustainable-supply-chains in MLA format BSR. Business for Social Responsibility, n.d. Web. 8 Jan. 2023.