by Susan Ariel Aaronson and Ethan Wham

Executive Summary

Supply chain initiatives wed government mandates delineating the “right to know” with corporate governance and voluntary corporate social responsibility (CSR) strategies. They are an attempt by government officials (at the behest of their citizens) to mandate companies to be transparent about their supply chain practices in the hopes that firms will then act in a responsible manner. In the US and the EU, policymakers have put in place four supply chain transparency initiatives: two to ensure that a supply chain does not contain conflict minerals and two to ensure that companies divulge slave labour in their supply chain. The conflict minerals supply chain initiatives only tangentially address labour rights, but the two supply chain anti-slavery initiatives directly tackle forced labour issues.

However, the architects of the two supply chain anti-slavery initiatives were influenced by corporate response to Dodd-Frank conflict minerals. These initiatives are relatively new and hence it may be too early to assess their impact. However, the authors reviewed the findings of civil society groups, consulting firms, and researchers in order to provide an initial assessment. In general, these investigators found that these supply chain initiatives:

• are expensive for firms to implement;
• have not led the bulk of firms to report, and the ones that do make broad statements and general commitments;
• require transparency about supply chain practices but say little about how firms should behave when they find slave or trafficked labour;
• do not yet appear to have changed corporate behavior, although they have led firms to discuss how to address supply chain problems;
• can help governments and activists monitor those firms that do report but firms are not providing the right kind or sufficient information to facilitate effective monitoring; and
• can do little to empower workers.