INTRODUCTION
Modern slavery has emerged as a focus of political mobilization and domestic regulation, but its interpretation in corporate practice remains unclear. While each of the purported component practices within modern slavery (for example, slavery, trafficking, and forced labor) are separately defined under international law, there is no coherent and internationally sanctioned definition of “modern slavery” (Bunting and Quirk Reference Bunting and Quirk2017). Nonetheless, recent laws require companies to report on their efforts to curb modern slavery within their supply chains. Such laws—including the United Kingdom’s 2015 Modern Slavery Act, California’s 2010 Transparency in Supply Chains Act, and Australia’s 2018 Modern Slavery Act—have been widely criticized for only mandating disclosure of corporate efforts to conduct supply chain due diligence and imposing very few (if any) penalties for noncompliance (see LeBaron and Rühmkorf Reference LeBaron and Rühmkorf2017a, Reference LeBaron and Rühmkorf2017b; Nolan and Bott Reference Nolan and Bott2018; Phillips, LeBaron, and Wallin Reference Phillips, LeBaron and Wallin2018). Yet scholars have not explored the important role of these new laws in shaping how ill-defined norms around modern slavery are being interpreted in practice.
This article examines how legal norms around modern slavery are being outlined in supply chain legislation and then translated by management professionals. I argue that by analyzing supply chain governance as an infrastructure or “network that facilitates the flow of goods, people, or ideas and allow for their exchange over space,” we can better understand the “technopolitics” behind supply chain regulations (Larkin Reference Larkin2013, 328). Technopolitics refers to the set of knowledge practices, administrative techniques, and relations of power that underlie governance (Larkin Reference Larkin2013; Johns Reference Johns2017; Sullivan Reference Sullivan2017). I track the implementation of recent supply chain laws by following the “chain of translation,” whereby information is transformed from qualitative, unstructured data replete with contestations over the determination of modern slavery on the ground, to quantitative indicators and scorecards of modern slavery risks, and, finally, to companies’ statements that summarize efforts to eradicate modern slavery in their supply chains. According to Bruno Latour (Reference Latour1999, 24–79, cited in de Goede Reference De Goede2017, 4), a “chain of translation” is “the set of practices whereby objects are identified, collected, registered, transferred, and interpreted” in various contexts. Latour understands the chain of translation to be a dynamic process of continuous circulation, referral, and contestation (de Goede Reference De Goede2017, 6). Translating supply chain information from one realm to another “changes the information itself: its technical appearance, the meaning it is inscribed with, the elements it is associated with, and the effects it is able to have” (de Goede and Sullivan Reference De Goede and Sullivan2016, 79). Thus, this process produces new meanings as information gets reformulated, distilled, and transformed.
With regard to recent modern slavery legislation, the chain of translation hinges upon the important role of third-party service providers, which are serving as key translators as they transform modern slavery from qualitative, unstructured data into quantitative metrics. Given the vague reporting requirements in supply chain legislation, companies have significant discretion as to how to measure and report on risks of modern slavery. As a result, third-party service providers—and, in particular, platforms—are playing a critical role in providing guidance on this issue. Platforms are business models that create value by facilitating exchanges of information and creating networks of users. One of the world’s largest collaborative platforms for sharing responsible sourcing data on supply chains is the Supplier Ethical Data Exchange (Sedex), a not-for-profit organization founded fifteen years ago which includes over fifty thousand buyer and supplier members in 150 countries and works across thirty-five industry sectors.Footnote 1 Sedex itself is not an auditor but, rather, a platform for the sharing of audit data and the developer of a commonly used social audit framework.
In this article, I demonstrate how the platform Sedex is providing critical guidance on how to measure and interpret risks of modern slavery in compliance with recent supply chain laws. By doing so, Sedex is filling a vacuum left by governments, which have passed vague legislation that lacks enforcement power and have failed to provide clear guidance on its interpretation and implementation. While Sedex is serving an important function in interpreting ill-defined legal norms around modern slavery and facilitating the implementation of supply chain laws, there are potential costs to Sedex’s expansive role. Sedex is translating modern slavery into a management problem largely based on quantitative metrics such as indicators and risk scorecards (Crane Reference Crane, Bunting and Quirk2017). While the appeal of metrics lies in their ability to translate social phenomena into a numerical representation that is transparent, easy to understand, and comparable across actors, these quantitative tools could potentially promote a box-ticking approach to compliance that entails superficial or cosmetic changes without any substantive effects on behavior. Furthermore, technical experts—mostly business professionals from the United Kingdom rather than legal experts—are playing a critical role in the platform’s decision-making, its design of measurement tools, and its interpretation of legal norms. While Sedex offers limited opportunities for public consultation, there needs to be more transparency as to the methodology behind its metrics to allow for critique and continuous improvement. In addition, Sedex should provide further opportunities for comment by parties underrepresented in its governance, including workers and unions.
This article contributes to existing literature in three areas: interdisciplinary scholarship on the intersection of business and human rights; sociolegal studies of the vernacularization of human rights as well as the use of indicators in global governance; and emerging literature on the implications of digital platform-based businesses on law and regulation. With regard to the intersection of business and human rights, I demonstrate the performative effect of recent domestic supply chain disclosure laws on modern slavery. Rather than focusing on the legal consequences (or lack thereof) that stem from recent legislation, I demonstrate how these laws are having important political effects that have as yet been underexplored and overlooked in the literature. In particular, I argue that these laws are cementing a particular definition of modern slavery despite the contentious and ambiguous nature of these legal norms under international law.
By following the chain of translation that leads to the development of supply chain disclosure statements, I track how legal norms around modern slavery are being translated into management practice (Crane Reference Crane, Bunting and Quirk2017). In so doing, I draw from sociolegal studies of the vernacularization of human rights and the use of indicators in global governance as well as from science and technology studies of infrastructure and translation. By analyzing the governance of global supply chains as a kind of infrastructure, I focus on the set of knowledge practices and relations of power that underlie supply chain laws and the disclosure statements produced in compliance with those laws. My article examines these statements as part of a chain of translation across a variety of domains and analyzes how human rights risks underlying the concept of modern slavery are being “vernacularized” into a management problem (see Merry Reference Merry2006; Goodale and Merry Reference Goodale and Merry2007). Vernacularization refers to the process by which norms are adapted to local meanings and existing cultural values and practices (Merry Reference Merry2006). As third-party service providers help companies identify risks in their supply chains, they are converting legal norms around modern slavery into quantitative indicators and numerical risk scorecards. These metrics imbue a technocratic rationality into decision-making and offer the public an impression of truth and objectivity while masking underlying power relations (see Davis et al. Reference Davis2012; Merry, Davis, and Kingsbury Reference Merry, Davis and Kingsbury2015; Merry Reference Merry2016).
A closer examination at the translators of modern slavery reveals the important role of platforms. Recent scholarship has examined the ways in which platforms (such as Amazon, Uber, and Paypal) are transforming the economy (see Parker, van Alstyne, and Choudary Reference Parker, van Alstyne and Choudary2016) as well as the intersection between platforms and regulation (see, for example, Lobel Reference Lobel2016; Cohen Reference Cohen2017). My case study of Sedex explores a new area of analysis—how platforms are translating human rights norms into practice. Sedex provides tools for tens of thousands of companies to perform risk assessments and due diligence with regard to potential risks of slavery in their supply chains. This platform is playing a critical role in the translation of modern slavery into management practice. As platforms such as Sedex facilitate information exchange, they are also determining who has access to such information, how to interpret human rights norms, and how to measure compliance with those norms.
The remainder of this article proceeds as follows. I first describe how the definition of modern slavery remains ambiguous under international law despite its emergence as a popular global cause. I then discuss the limitations of recent efforts to address modern slavery in global supply chains through mandated domestic disclosure laws. Finally, I apply an infrastructural analysis to supply chain governance and uncover the set of practices that underlie supply chain regulations around modern slavery. In order to analyze the vernacularization of modern slavery into a management problem, I track the development of supply chain disclosures through a chain of translation. I then demonstrate how the platform Sedex is serving an important function with respect to the interpretation of legal norms and the implementation of supply chain laws. Yet I argue that there are potential costs to Sedex’s expansive role, including the promotion of a box-ticking approach to compliance that is largely based on quantitative indicators and risk scorecards, whose methodology is not transparent to the public. I conclude by calling for Sedex to provide more transparency as to the methodology behind its metrics and further opportunities for comment by parties underrepresented in its governance. I also recommend that governments offer more guidance on the interpretation and implementation of recent disclosure laws.
THE AMBIGUOUS LEGAL DEFINITION OF MODERN SLAVERY
Political mobilization against the use of modern slavery (or what is sometimes called “contemporary forms of slavery”) has risen over the last two decades, as non-governmental organizations (NGOs) and governments have been working together to address this issue. NGOs such as Free the Slaves and the Walk Free Foundation have launched global anti-slavery campaigns, while states have invested tremendous resources and passed legislation devoted to its eradication (Chuang Reference Chuang2014, Reference Chuang2015a). Part of the appeal behind the cause of slavery arises from “the fact that it is perceived as being relatively ‘safe’ from a political and ideological standpoint” and is “chiefly focused upon a small number of ‘aberrant’ and ‘exceptional’ cases … concentrated within the ‘irregular’ margins of the global economy and within so-called ‘backward’ corners of the Global South” (Bunting and Quirk Reference Bunting and Quirk2017, 7). Yet the popularity of this cause has overshadowed the contentious debate over its definition as well as the unintended consequences of applying the label of slavery to a variety of practices that range in degree of exploitation.
Given the sensationalist iconography of slavery and the rhetorical force behind this cause, multiple issues have been defined as modern slavery in order to draw political support, public awareness, and institutional investment to diverse practices across the globe (Bunting and Quirk Reference Bunting and Quirk2017, 6). Modern slavery has come to encompass different forms of exploitation and vulnerability, including human trafficking, forced labor, bonded labor, early and forced marriage, and child labor, which involve divergent and sometimes competing priorities and agendas. Despite the popularity around this cause, the underlying issues behind modern slavery remain poorly understood, stemming largely from its ambiguous legal definition (Bunting and Quirk Reference Bunting and Quirk2017). The same can be said for trafficking, one of the practices commonly defined as modern slavery. Janie Chuang (Reference Chuang2014, 610) argues that “the definitional muddle has resulted in indiscriminate conflation of legal concepts, heated battles over how best to address the problem, and an expanding crowd of actors fervently seeking to abolish any conduct deemed ‘trafficking.’” Efforts to expand the broad, undefined category of modern slavery (as well as trafficking) have led to “exploitation creep” (610).
Although the prohibition against slavery has the status of a jus cogens norm under international law, there is considerable debate over the definition of modern slavery.Footnote 2 While each of the component practices that may be included under modern slavery are defined within international law, the broad concept is not covered under a separate legal framework.Footnote 3 As a result, some advocates have pushed for a flexible interpretation that is overinclusive. This approach, however, risks diluting the norm of slavery and undermining its status as jus cogens (Chuang Reference Chuang2015b).
In the absence of an international law definition of modern slavery, scholars and practitioners drafted the Bellagio–Harvard Guidelines on the Legal Parameters of Slavery in 2012. The guidelines begin with the narrow definition of slavery found in the 1926 Slavery Convention (1), which defines it as “the status or condition of a person over whom any or all of the powers attaching to the right of ownership are exercised.” The guidelines then attempt to define contemporary slavery by redefining possession as the control of a person “in such a way as to significantly deprive that person of his or her individual liberty, with the intent of exploitation through the use, management, purchase, sale, profit, transfer or disposal of that person” (Allain Reference Allain2012; Bellagio-Harvard Guidelines 2012, 2). Thus, this understanding of modern slavery highlights the loss of individual liberty and free movement experienced by slaves.
The popularity of modern slavery as a single, cohesive, and global cause continues despite the debate over its legal definition, which has led to several unintended consequences. When recent regulation and political campaigns target modern slavery as an exceptional evil, they promote a hierarchical model of human rights violations. As a result, slavery is treated as an issue of extreme urgency and immorality, while “lesser” violations are deprioritized (Bunting and Quirk Reference Bunting and Quirk2017, 9). This rhetorical strategy is frequently used by organizations in the global North to garner funding and support behind a particular issue, which is framed as part of the overarching cause of modern slavery. Some scholars have argued that such a strategy provides ideological support for policies that actually protect the interests of powerful global elites rather than those who are suffering from neoliberal economic reforms (O’Connell Davidson Reference O’Connell Davidson2015). According to Mike Dottridge (Reference Dottridge2014), former director of the world’s oldest monitor of forced labor, Anti-Slavery International, which is based in London,
apart from questions of legal terminology … the use of the term “modern slavery” has potentially damaging consequences for the very people whom a new law is supposed to protect. The prime problem is that the term implies a degree of exploitation that is so extreme as to fall outside the ordinary world of work. It also implies that such exploitation cannot be solved by any of the techniques that have been traditionally used to combat work place abuse.
Governments have nonetheless embraced the concept of modern slavery in recent supply chain disclosure legislation, which is driving the interpretation of this vaguely defined concept in management practice.
RECENT SUPPLY CHAIN DISCLOSURE LAWS ON MODERN SLAVERY
Recent modern slavery disclosure laws are part of a broader attempt to address corporate human rights violations in supply chains through a variety of legal mechanisms. An overlapping web of intergovernmental standards has attempted to regulate corporate human rights activity abroad (Kinley and Tadaki Reference Kinley and Tadaki2004; Ruggie Reference Ruggie2007). Existing intergovernmental standards include the Organisation for Economic Co-operation and Development’s Guidelines for Multinational Enterprises (2011), the International Labour Organization’s (ILO) Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (1977), the Voluntary Principles on Security and Human Rights (2000), the UN Global Compact (2000), and the International Organization for Standardization’s 26000 standard. The most recent international mechanism is the UN Guiding Principles on Business and Human Rights (2011), which were unanimously endorsed by the UN Human Rights Council in 2011. While these standards have been influential in developing new norms and setting expectations for companies, they have the status of voluntary soft law and thus feature weak monitoring and enforcement mechanisms. Given the limitations of existing international legal mechanisms, domestic legislation has emerged as a supplementary method for regulating the extraterritorial human rights abuses of corporations and promoting corporate accountability. These laws build on existing international legal frameworks (particularly UN and ILO conventions) that define prohibited practices, such as those that are frequently included in the concept of modern slavery.
Over the past eight years, a variety of jurisdictions have passed or proposed domestic regulations that mandate disclosure on corporate supply chains.Footnote 4 While a subset of these laws is directed at the use of conflict minerals (for example, section 1502 of the US Dodd-Frank Act (2010) and the European Union’s Council Regulation 2017/821 [2017]), I will focus on the laws that address the use of slavery, forced labor, and human trafficking within supply chains. The first law passed in this area is the California Transparency in Supply Chains Act (2010). This law, which took effect on January 1, 2012, applies to retail sellers and manufacturers doing business in California that have annual gross receipts exceeding one hundred million dollars. It requires applicable companies to disclose their efforts to ensure that their supply chains are free from slavery and human trafficking. Companies must report on relevant activities on their websites, including supply chain verifications, audits, and training. The California Transparency in Supply Chains Act has served as a model for recent UK and Australian legislation on supply chain transparency—the United Kingdom’s Modern Slavery Act (2015) and Australia’s Modern Slavery Act (2018). Draft modern slavery bills are also under consideration in Canada and Hong Kong.
While there are minor differences between the California, UK, and Australian laws, all three have been criticized for their lack of specificity and legal force (LeBaron and Rühmkorf Reference LeBaron and Rühmkorf2017a, Reference LeBaron and Rühmkorf2017b; Nolan and Bott Reference Nolan and Bott2018).Footnote 5 For instance, the laws do not prohibit companies from engaging in slavery practices, as firms are only required to disclose their efforts (if any) to eradicate slavery in their supply chains. The laws also currently fail to provide detailed guidance. By only setting general requirements on what should be reported, these disclosure regimes have resulted in a broad diversity of statements (ranging from vague one-page statements to twenty-page detailed reports) that are difficult to assess and compare (CORE 2017; Craig Reference Craig2017; Ergon Associates 2017). In addition, most statements do not trace the entirety of corporate supply chains (with the majority failing to go beyond the first tier) and provide little detail of slavery risks beyond simply describing corporate products and services and making general commitments to slavery-free supply chains (Business and Human Rights Resource Centre 2017; Know the Chain 2018). Finally, and most importantly, the laws do not impose financial or legal penalties if companies fail to comply with their disclosure requirements. They instead rely on the use of public pressure from NGOs, investors, and consumers to shape corporate behavior, which thus far has not proven to be successful (Phillips, LeBaron, and Wallin Reference Phillips, LeBaron and Wallin2018).
While scholars have primarily critiqued recent modern slavery laws for their lack of effectiveness, I instead focus on the performative effect of the laws on the definition and interpretation of modern slavery in corporate practice. The three laws range in their level of detail as to how they define slavery, although gaps in interpretation continue to exist. The California Transparency in Supply Chains Act (2010) lies at one end of the spectrum, given its vague allusion to “slavery and human trafficking,” which are defined as “crimes under state, federal, and international law.” The bill provides no additional guidance as to what should be included in the definition of slavery. The United Kingdom’s Modern Slavery Act (2015) goes a step further by defining modern slavery as including the two offences of “slavery, servitude and forced or compulsory labor” and “human trafficking.” The UK government released guidance on the bill, which refers to international law definitions of forced or compulsory labor and child labor as well as the United Kingdom’s domestic law definition of human trafficking. Under a section entitled “behavior constituting modern slavery,” the guidance states:
Identifying potential victims of modern slavery can be a challenge because the crime can manifest itself in many different ways. There is a spectrum of abuse and it is not always clear at what point, for example, poor working practices and lack of health and safety awareness seep into instances of human trafficking, slavery or forced labor in a work environment…. There will be cases of exploitation that, whilst being poor labor conditions, nevertheless do not meet the threshold for modern slavery – for example, someone may choose to work for less than the national minimum wage, or in undesirable or unsafe conditions, perhaps for long work hours, without being forced or deceived. Such practices may not amount to modern slavery if the employee can leave freely and easily without threat to themselves or their family. (UK Home Office 2017, 18–19)
With regard to child labor, the guidance affirms the difficulty of determining whether the practice connotes modern slavery:
Children can be particularly vulnerable to exploitation, but child labor will not always constitute modern slavery. It will still be necessary to determine whether, based on the facts of the case, the children in question are being exploited in such a way as to constitute slavery, servitude and forced or compulsory labor or human trafficking. For example, it is possible for children to undertake some “light work” which would not necessarily constitute modern slavery…. Children do have particular vulnerabilities which should be considered when determining whether modern slavery is taking place. (18)
The determination of whether modern slavery is taking place in the context of child labor and other practices is thus left to companies, which may seek the guidance of third parties such as NGOs and service providers.
Australia’s Modern Slavery Act (2018) defines modern slavery as including eight types of serious exploitation: trafficking in persons, slavery, servitude, forced marriage, forced labor, debt bondage, the worst forms of child labor, and deceptive recruiting for labor or services. In March 2019, the Australian government released a draft guidance document on the Modern Slavery Act for public consultation (Australian Department of Home Affairs 2018). The guidance provides explanatory information concerning the definition of modern slavery, including case studies and examples for each type of serious exploitation and a list of broadly defined risk indicators. While Australia certainly provides more detailed guidance than the California and UK governments, the suggested indicators are very general, and uncertainties remain as to the interpretation of modern slavery. For instance, companies are still left to navigate the line between serious exploitation that would constitute modern slavery and dangerous conditions that would not qualify as modern slavery (for example, practices like substandard working conditions or underpayment of workers).
Therefore, the current laws leave critical gaps in interpretation particularly in the context of supply chains. The line between coercion and severe exploitation is not always clear, nor is the line between voluntary and coercive child labor. It is also difficult to distinguish between direct coercion and involuntary labor that stems from extreme poverty and a lack of alternative livelihood. As emphasized above, governments such as that of the United Kingdom do not provide enough guidance as to how to determine whether an exploitative practice meets the threshold of modern slavery. Without sufficient statutory guidance, police and local authorities lack the tools they need to effectively respond to modern slavery. Moreover, companies (often with critical assistance from their third-party service providers) have discretion to interpret modern slavery when drafting statements on their supply chains.
THE VERNACULARIZATION OF MODERN SLAVERY INTO CORPORATE PRACTICE
In order to understand how recent disclosure laws are being implemented and are shaping how modern slavery is translated into practice, it is helpful to first analyze the governance of global supply chains as a kind of infrastructure. I argue that by doing so we can better understand the “technopolitics” behind recent supply chain regulations and the process through which global supply chain governance is assembled (Larkin Reference Larkin2013, 328). The technopolitics of regulations refers to the set of knowledge practices, administrative techniques, and relations of power that underlie governance (Larkin Reference Larkin2013; Johns Reference Johns2017; Sullivan Reference Sullivan2017). Through an infrastructural approach, I focus on the materiality and political instrumentality of laws by examining the practices, networks, and techniques through which governance unfolds. Moreover, this article shines light on the seemingly invisible actors (for example, experts and third-party service providers) who are operating in the background but may be wielding significant power in shaping how legal norms are interpreted and supply chain governance operates in practice.
When applying an infrastructural approach to supply chain governance and analyzing the technopolitics of regulations, I particularly examine the role of experts and the use of technologies in the design and implementation of laws. Experts apply practices of accounting, management techniques, and financial instruments to conduct human rights due diligence across supply chains, maintain webs of relational contracts between suppliers, and mediate exchanges among people and objects across vast distances. There is also a datafication of supply chain governance as auditors rely on data analytics, performance indicators, and other statistical tools to conduct supply chain mapping and risk assessments. Such techniques display governmentality by serving as a technology of power that constitutes populations and makes individuals calculable and therefore governable (Foucault Reference Foucault, Burchell, Gordon and Miller1991; see also Davis et al. Reference Davis2012; Merry, Davis, and Kingsbury Reference Merry, Davis and Kingsbury2015; Merry Reference Merry2016).
An important question in the study of infrastructure is determining who has the power to shape its regulatory functions. In the case of supply chain governance, third-party service providers are serving an important role by providing tools for companies to perform risk assessments and due diligence in compliance with recent laws. It is perhaps not surprising that one of the most influential third-party service providers in this arena—Sedex—is itself an infrastructure, one that is seemingly invisible and operates in the background. According to Susan Leigh Star (Reference Star1999, 382), new infrastructures are always built on top of previous infrastructures. Later in this article, I will discuss the infrastructure of Sedex (one of the world’s largest collaborative platforms for sharing responsible sourcing data on supply chains) and its use of indicators, data analysis, and risk management tools to translate modern slavery into management practice.
Before delving into a case study of Sedex, I first analyze the process by which human rights norms surrounding modern slavery are being vernacularized, or adapted to local meanings (Merry Reference Merry2006), in the context of management practice. Examining human rights as both discourse and social practice, scholars have studied the process of producing and translating norms as well as the ways in which they become meaningful on the ground (Merry Reference Merry2006). They have also analyzed human rights as a disciplinary knowledge practice and have uncovered the technocratic and instrumental approach used by human rights practitioners (Riles Reference Riles2006). Extending anthropological studies of human rights as a social practice, my article analyzes the translation of modern slavery norms by business professionals (Goodale and Merry Reference Goodale and Merry2007). What is particularly unique about this case is that the legal norms around modern slavery are undefined under international law and remain ambiguous within recent legislative definitions. In the absence of clear guidance from governments, the interpretation of modern slavery is left to corporations to determine how they apply it to their supply chains. In the following section, I track the implementation of supply chain laws by following the “chain of translation” from the gathering of on-the-ground qualitative information, to the transformation of this raw data into quantitative metrics developed by third-party service providers and used by auditors, and, finally, to its distillation into polished disclosure statements posted by companies. I then analyze the critical role of one particularly influential third-party service provider—the platform Sedex—which is serving as a key translator as it shapes how modern slavery is being measured and interpreted in corporate practice.
A Chain of Translation
While scholars have studied supply chain laws by narrowly focusing on the disclosure statements issued by companies, I argue that we should more broadly examine the laws by analyzing the set of practices that feed into these statements. In the words of Latour (Reference Latour1999), we have to study the “chain of translation” as information about supply chains is reformulated, distilled, and transformed across actors and realms. Information changes and is reinterpreted as it moves through the chain of translation. My analysis examines the process by which supply chain information is transformed from qualitative, unstructured data replete with contestations over the determination of modern slavery on the ground, to quantitative indicators and scorecards of modern slavery risks, and, finally, to compnanies’ disclosure statements that summarize efforts to eradicate modern slavery in their supply chains. In other words, I follow the series of translations by which undefined norms around modern slavery are interpreted in practice.
Step 1: The Gathering of On-the-Ground Raw Data
The chain of translation begins on the ground with the gathering of raw data on potential instances of modern slavery within supply chains. Corporations frequently outsource this process to private parties such as auditors and consulting firms, which conduct human rights risk assessments for companies in compliance with recent laws. These third-party auditors wade through the ambiguities of how modern slavery is defined within international law and recent domestic laws and then interpret those legal norms on behalf of companies (which are, in effect, outsourcing their compliance obligations) (Blair, Williams, and Lin Reference Blair, Williams and Lin2008; LeBaron and Lister Reference LeBaron and Lister2015; Short, Toffel, and Hugill Reference Short, Toffel and Hugill2016).
The gathering of on-the-ground information on potential instances of modern slavery is a challenging process given the hidden nature of the abuses as well as various methodological obstacles. Third-party auditors and consultants struggle to gather data on such a sensitive issue. Workers may be afraid to talk openly with auditors about the risks of modern slavery for fear of jeopardizing their safety or suffering reprisals from their employers (Sedex 2014). There also may be a stigma attached to the issue as workers may not perceive themselves to be victims of modern slavery or want to be labeled as such. In addition, abuses are often hidden and characterized by deception (Sedex 2014). They may occur in locations where auditors have limited access to workers, who often operate several tiers down the supply chain and are thus out of scope of typical risk assessments.
As auditors attempt to engage with workers and interpret results, an additional challenge is cultural. According to a report on measuring forced labor by Verité (2016, 10–11), a consulting firm on labor in supply chains with over seventeen years of experience, it is difficult to access cultures and societies where there is mistrust of strangers and outsiders. This is particularly true with respect to women and children, who are more vulnerable to these violations yet are more restricted from having contact with strangers. Verité’s own researchers have struggled to establish trust and rapport with respondents while they conduct fieldwork and admit to the limitations of their own mixed-methods approach (8).
Another set of reasons for the difficulty of uncovering modern slavery on the ground is methodological, stemming from auditors’ limited tools and skills. Auditors may lack the experience, procedures, and knowledge to discover instances of human trafficking or forced labor (Sedex 2014). Most auditors lack the tools to measure these complex human rights violations, which can take many forms and depend on the existence of multiple factors of exploitation. The challenges of measuring modern slavery are highlighted by the existence of a recent data initiative on modern slavery at the ILO. In 2015 and 2016, the ILO (2015) organized four expert workshops on measuring modern slavery, including such tasks as harmonizing definitions, developing a measurement approach, using proxy indicators, and relying on both quantitative and qualitative methods.
The process of gathering raw data on modern slavery is thus fraught with politics and contestations over whether observations in fact qualify as violations. Auditors have significant discretion as they negotiate the indistinct line between coercion and severe exploitation, which requires an understanding of consent to work as well as the complicating factors of poverty and a lack of alternative livelihoods (Verité 2016, 12–13). This is particularly challenging when operating in politically, economically, and socially unstable environments. Auditors often need to triangulate data from desk research, interviews, qualitative surveys, and expert consultations.
Step 2: The Transformation of Qualitative Raw Data into Quantitative Metrics
As part of the second step in the chain of translation, auditors convert raw qualitative data on modern slavery into quantitative metrics such as indicators and risk scorecards. These metrics appear as objective facts while overlooking the analytical and methodological challenges that auditors face when gathering the original qualitative data. In this section, I will describe a selection of the most widely used tools that auditors and companies rely on when converting on-the-ground information on modern slavery to quantitative metrics. These tools include forced labor operational indicators as well as forced labor indicator reports that calculate composite risk scores for companies to use when reporting on modern slavery. Both sets of tools have been developed by the collaborative platform Sedex, which I will discuss in more detail in the next section.
When conducting human rights due diligence on behalf of companies, many auditors rely on a methodology called the Sedex Members Ethical Trade Audit (SMETA), which is one of the most widely used ethical auditing tools in the world, with nearly 20,000 SMETA audits uploaded every year onto the Sedex platform (Sedex 2017c). The SMETA auditing protocol covers four areas: labor standards, health and safety, the environment, and business ethics. In order to help auditors spot the signs of actual, likely, or possible cases of forced labor (one of the components of modern slavery), Sedex (2017a) produces a supplement to SMETA called the Guidance on Operational Practice and Indicators of Forced Labor. Many social auditors use this guidance to convert on-the-ground information on possible instances of modern slavery to quantifiable risks and then to communicate those risks to businesses (which later summarize those risks in their disclosure statements).
While Sedex’s guidance describes the difficulty of identifying situations of forced labor since they occur on a spectrum of exploitation, it goes on to provide auditors with a set of tools for assessing potential risks. Most notably, it offers a set of sixty operational indicators categorized into three areas of risk: definite, strong, and possible indicators of forced labor.Footnote 6 For instance, definite indicators of forced labor include: employer employs coercive recruitment practices; undocumented migrant workers have been subjected to threats of being returned to their home country; and workers cannot leave employment until they have worked to pay off debts owed to the employer. Strong indicators include: worker contract misrepresents employment relationship; workers are subjected to physically abusive or humiliating forms of discipline; and movements are controlled outside the workplace by agents of their employers. Finally, possible indicators include: the presence of multiple labor brokers and agents from recruitment to employment; workers are uninformed or misinformed about terms of employment; and workers show signs of either psychological or physical abuse.
The guidance states that one can “pinpoint” where forced labor may be occurring by looking at the indicators, both independently and in combination, of actual, likely, or possible situations of forced labor (Sedex 2017b). Yet auditors clearly need to use their judgment when making this determination. For example, how do they distinguish between the strong indicator of a physically abusive disciplining environment and the possible indicator of workers showing signs of physical abuse? While the guidance states that “multiple factors need to be in place to definitively identify a situation as forced labor,” there is no publicly available formula as to how many strong/possible indicators in each category warrant a determination of forced labor (Sedex 2017a, 24).
Once auditors report on the forced labor indicators, the next step is for companies to compile and summarize audit data from multiple supplier sites. By serving as a platform for exchanging audit data among buyers and suppliers, Sedex has access to composite data and is thereby able to produce forced labor indicator reports. The audience of these reports is companies, which extract information from the reports when they summarize their modern slavery risks in disclosure statements. Sedex produces three kinds of reports: (1) the supplier performance against indicators report (which provides a detailed, site-specific report for use in a company’s day-to-day supply chain management); (2) the supply chain summary report (which provides a high-level overview of the likelihood of forced labor being present in a company’s supply chain); and (3) the country benchmarking report (which provides an overview of a company’s supply chain, enabling it to benchmark the performance of its sites by country) (Sedex 2017b). These reports compute a numerical “forced labor risk score” (up to the hundredths decimal place), which allows for standardization across suppliers and countries. While Sedex states that the forced labor risk score is based on a weighted calculation of the number of indicators identified at specific sites and their strength (definite, strong, or possible), it does not provide a detailed methodology to the public of how this calculation is made.
Step 3: The Conversion of Quantitative Metrics into Polished Disclosure Statements
The final step in the chain of translation is converting quantitative indicators and risk scorecards into a polished corporate disclosure statement. Recent legislation recommends that these statements feature certain information about a company’s supply chain. For instance, according to section 54, clause 5 of the UK Modern Slavery Act (2015), a statement “may include” information on:
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a. the organization’s structure, its business and its supply chains;
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b. its policies in relation to slavery and human trafficking;
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c. its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
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d. the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
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e. its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate; and
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f. the training and capacity building about slavery and human trafficking available to its staff.
Despite this standardized list, corporate statements often include generic language that lacks substantive and meaningful information (Business and Human Rights Resource Centre 2016, 13; 2018, 3).
Corporate disclosures represent a translation of quantitative metrics on modern slavery risks into polished statements, often with few details on actual risks of modern slavery. As noted above, the UK Modern Slavery Act (2015) suggests that organizations report information about their “effectiveness in ensuring that slavery and human trafficking is not taking place in [their] business or supply chains, measured against such performance indicators as [they consider] appropriate.” However, performance indicators are the item least well addressed by Modern Slavery Act statements (Ergon Associates 2017, 8). According to a 2017–18 study of Modern Slavery Act statements, about 25 percent of organizations referenced a due diligence standard, with Sedex’s Guidance on Operational Practice and Indicators of Forced Labor (2017a) among the top two standards cited (Bayer et al. Reference Bayer, Hudson, Margherita and Culbreth2018, 32–33). Other than mentioning their use of Sedex’s forced labor indicators, most companies do not disclose the data behind the indicators, the extent to which they are weighted, or how companies translate the metrics into conclusions about modern slavery risks. They simply use a box-ticking approach and state that risks to modern slavery are low without providing supporting evidence (Business and Human Rights Resource Centre 2016, 13). They also do not discuss potential challenges of measuring or defining modern slavery that their auditors may face when gathering supply chain information on the ground.
In addition, many statements include identical wording and the use of pro forma language, which suggests that companies may be outsourcing their statements to consultants and using templates rather than creating unique statements based on comprehensive due diligence (Business and Human Rights Resource Centre 2016, 13). This is even the case for the Financial Times Stock Exchange 100 companies that have the financial resources to conduct meaningful due diligence (13).Footnote 7 One reason for the use of generic language in disclosures is that corporate lawyers are risk averse and are advising companies not to provide detailed information about actual supply chain risks (14). Because there is no penalty attached to noncompliance or disclosing a generic statement, companies have little incentive to provide details of due diligence. The companies that have provided the most detailed and informative statements were produced by the larger, multinational, consumer-facing companies, which often have complex international supply chains and, therefore, the most exposure to modern slavery risks (Ergon Associates 2017). Most of these corporations are also publicly listed so they face greater scrutiny as a result of media scandals or NGO campaigns and “may well be responding to increasing investor interest in human rights due diligence” (Lake et al. Reference Lake2015, 34–35; Ergon Associates 2017, 4; 2018, 6).
Public disclosure of statements enables their collation, interpretation, and ranking by a variety of actors. The Business and Human Rights Centre has created the Modern Slavery Act Registry, a free online registry that compiles all of the modern slavery statements under the UK and California laws that have been published on corporate websites. The United Kingdom also announced its plans to create a publicly available central registry of modern slavery statements (UK Home Office 2019a, 10). A central registry enables the public, academics, and NGOs to compare and rank statements (Know the Chain 2018). NGO benchmarks also strive to encourage a “race to the top,” whereby companies feel reputational pressure to improve their behavior. Socially responsible investors and pension funds may also use disclosures when engaging companies to improve their social, environmental, and human rights performance.
An additional innovative use for disclosures has been as evidence for consumer protection litigation. Class action lawsuits have been filed in the United States against several companies, including Costco, Hershey, Mars, and Nestlé, based on their disclosures under the California Transparency in Supply Chains Act.Footnote 8 The lawsuits allege that the companies falsely represented that they forbid modern slavery in their supply chains, even though they in fact sold products tainted by modern slavery. Such practices would violate consumer protection and unfair competition statutes under California law. Although most of the cases have been dismissed, litigation continues and may still inflict reputational damage on the companies. In addition, the threat of litigation may be driving companies to be more risk averse in their reporting and to focus on their due diligence procedures rather than disclosing actual risks of slavery.
Overall, it remains to be seen how effective NGO, media, or consumer pressure will be on driving improvements in corporate behavior. According to a recent report analyzing statements under the UK Modern Slavery Act (2015), “there is still a wide gap that distinguishes a few leading companies from the laggards that make up the majority” (Business and Human Rights Resource Centre 2017, 1). Most companies are producing weak statements, with only 19 percent of companies in full compliance with the UK Modern Slavery Act (Business and Human Rights Resource Centre 2018, 22).Footnote 9 One report concludes that three years since the passage of the act, “the quality of reporting in terms of content, scope and detail has remained the same with no appreciable change in quality” (Ergon Associates 2018, 2). While statements are getting longer, they are not necessarily becoming more informative.
The Role of Sedex as a Third-Party Service Provider
When examining the chain of translation behind recent supply chain laws (from on-the-ground gathering of qualitative information to its transformation into quantitative metrics to the preparation of corporate disclosure statements that are interpreted and ranked by NGOs), it is important to analyze the critical role of one particular actor—third-party service providers. These firms provide the tools for companies and their auditors to carry out step 2 of the translation process—the transformation of raw qualitative data into quantitative metrics. They also serve as a platform for the sharing of auditing information across buyers and suppliers.
The third-party service provider referenced most frequently in recent disclosure statements under the UK Modern Slavery Act is Sedex (Bayer et al. Reference Bayer, Hudson, Margherita and Culbreth2018, 39). Sedex is a platform for sharing responsible sourcing data on supply chains. Like other platforms, it creates value by facilitating exchanges of information and creating networks of users. Sedex also operates as a kind of infrastructure with respect to supply chain governance. As I mentioned earlier, infrastructures are frequently built on top of previous infrastructures (Star Reference Star1999, 382). In this case, the infrastructure of supply chain governance is relying on an underlying, often hidden infrastructure that facilitates the translation and implementation of recent modern slavery laws. Sedex acts as an infrastructure by serving as an agent of governance that enables the flow of data, services, practices, and ideas across buyers and suppliers.
While Sedex operates in the background, it is playing an important function in interpreting legal norms and shaping supply chain governance. Platform-based businesses such as Sedex are transforming the legal landscape by reducing transaction costs between buyers and suppliers, generating a strong data network, reducing barriers to entry, and offering economies of scale (see Lobel Reference Lobel2016; Parker, van Alstyne, and Choudary Reference Parker, van Alstyne and Choudary2016; Cohen Reference Cohen2017). Their digital platforms enable increased access to information through the application of advanced technology and data analysis capabilities. Platforms are already reshaping such areas as work, finance, entertainment, social interaction, and the consumption of goods and services (Cohen Reference Cohen2017, 137). While scholars have written about the role of platforms in “disrupting previously accepted legal categories and regulatory goals” (Lobel Reference Lobel2016, 143), existing scholarship is largely based on for-profit examples of platform business models (for example, Google, Amazon, Uber, Facebook, and Airbnb). This case study of the not-for-profit Sedex uncovers another important function of platforms—their role in translating human rights norms into practice. As Sedex facilitates an efficient sharing of audit information among buyers and suppliers, it also creates a network of users to which it offers a range of exclusive, proprietary tools. Most notably, these tools include a normative framework for social auditing, including guidance and standardized tools for measuring and reporting on modern slavery in compliance with recent laws.
Sedex operates one of the world’s largest platforms for sharing responsible sourcing data on supply chains.Footnote 10 Founded in 2004 as a not-for-profit organization based in London, its stated mission is “making it simpler to do business that’s good for everyone.”Footnote 11 More specifically, Sedex strives “to advance [its] mission to reduce complexity, increase collaboration and help [its] members build their value chains, simply and sustainably” (Sedex 2016a, 3). Its fifty thousand buyer and supplier members in 150 countries pay a membership fee to Sedex in order to access its platform and related tools.Footnote 12 Sedex’s collaborative platform (called Sedex Advance) offers a range of tools to assist members in complying with modern slavery legislation by helping them identify, measure, and manage risks in their supply chains. Such aforementioned tools include SMETA, which is one of the most widely used social auditing formats; a supplement to SMETA called the Guidance on Operational Practice and Indicators of Forced Labor (Sedex 2017a); and its forced labor indicator reports. Members also have access to risk analysis tools developed by the global risk consulting firm Verisk Maplecroft.
Sedex was originally founded to tackle duplication and audit fatigue in the supply chain through information exchange. Suppliers would frequently face thirty to forty requests for audits, questionnaires, and certifications every year from a variety of companies seeking to do business with them.Footnote 13 This overwhelming number of requests can result in audit fatigue for suppliers, which may lack the financial resources and time to comply. Sedex’s platform allows suppliers to share one set of data with multiple customers, thereby pooling auditing resources and harmonizing standards among companies. Suppliers that join Sedex are first asked to complete a questionnaire on their labor, health and safety, environmental, and business ethics policies and practices. This information is then shared with multiple buyers and third-party auditors.Footnote 14 Suppliers benefit since they do not have to undergo discrete audits for each customer, thereby saving themselves time and resources. By serving as a mechanism for sharing audit data, the Sedex platform incentivizes suppliers to become members so that they can not only share information with multiple buyers but also link their data to other underlying suppliers.
There are also important advantages for buyers to become members of Sedex. By becoming a member, companies can share information on audits and thereby reduce costs. Buyers gain access to Sedex’s forced labor indicator reports, which compile and summarize audit data from multiple supplier sites for companies to use when reporting on modern slavery. These reports also compute a numerical forced labor risk score based on a weighted calculation of the number of indicators identified at specific sites and their strength. In addition to accessing these reports and using the Sedex data management system, buyer companies can network and engage with other Sedex members as well as participate in Sedex’s governance and working groups.
Implications of Sedex’s Role
While Sedex is providing critical guidance to companies as they implement recent supply chain laws, there are potential risks associated with Sedex’s expansive role including the possible promotion of superficial compliance through an overreliance on quantitative indicators and the dominance of business interests without sufficient citizen engagement. While analyzing these concerns in the context of Sedex, I will also discuss related problems within the broader social auditing regime. Although Sedex itself is not an auditor but, rather, a platform for the sharing of audit data and the developer of a commonly used social audit framework (SMETA), concerns around Sedex’s role are commonly associated with the social auditing regime.
Sedex’s framework (including its SMETA auditing tool, Guidance on Operational Practice and Forced Labor Indicators, and its forced labor indicator reports), as well as the social auditing regime more broadly, largely relies on quantitative metrics such as indicators and risk scorecards. However, scholars have observed that the data produced by the metrics used in social audits “obscures more than it reveals about environmental and social problems within supply chains” (LeBaron and Lister Reference LeBaron and Lister2015, 916). The appeal of metrics lies in their ability to simplify complex concepts such as modern slavery and translate them into a numerical representation that is transparent, easy to understand, and comparable across actors. Quantitative tools can offer a number of apparent benefits: they can measure accountability to standards and norms; assess compliance with policies; and evaluate performance with respect to stated objectives. Indicators rely on numbers, which command scientific authority and offer the public an impression of truth and objectivity.
Yet, according to recent scholarship on the role of indicators in shaping global governance, these tools imbue a technocratic rationality into decision-making that masks underlying power relations as well as the methodologies in producing the metrics (see Davis et al. Reference Davis2012; Merry, Davis, and Kingsbury Reference Merry, Davis and Kingsbury2015; Merry Reference Merry2016). In fact, there are trade-offs and assumptions that are made when using quantitative tools that are frequently hidden from the public. For instance, as auditors are tasked with evaluating the performance of a supplier site against labor standards, they exercise discretion when weighing how many and which indicators need to be present before identifying potential risks of forced labor and instances of noncompliance with the applicable standard or code (Sedex 2017c, 40). Moreover, the use of indicators can produce a box-ticking approach to compliance, which entails superficial or cosmetic changes without any substantive effects on behavior. If not supplemented with qualitative contextual data, the use of indicators can also distort the meaning of human rights norms when converting them into numbers (Rosga and Satterthwaite Reference Rosga and Satterthwaite2009).
A related critique of the social auditing regime is that it does not advance the various social objectives (for example, improving labor conditions and environmental compliance) that it was originally intended to promote (Locke Reference Locke2013). For example, Genevieve LeBaron, Jane Lister, and Peter Dauvergne (Reference LeBaron, Lister, Dauvergne, Claire Cutler and Dietz2017a, Reference LeBaron, Lister and Dauvergne2017b) argue that the audit regime disproportionately benefits the multinational corporations (MNCs) that utilize auditing to protect their business interests. MNCs, they argue, are merely shaping the various auditing standards in ways that legitimate and protect their business. Relatedly, scholars have argued that auditors do not properly engage with workers and that their findings, therefore, are tainted by the role of management (O’Rourke Reference O’Rourke2000, Reference O’Rourke2003). The lack of worker engagement has resulted in what Jill Esbenshade (Reference Esbenshade2001, 99) calls “the social accountability contract,” which forms strictly between employers, their contractors, governments, and NGOs but excludes the workers themselves. While the social accountability contract aims to protect workers, it fails to empower them as participants in the monitoring system. These critiques resonate with concerns over the potential dominance of business interests within Sedex’s leadership and the limited opportunities for public participation (especially by workers and unions), which I further discuss below.
Because indicators rely on numerically rendered data, technical experts can exercise considerable power over decision-making and the interpretation of legal norms. In the case of Sedex (which is exercising authority over how to interpret norms around modern slavery and how to measure compliance with those norms), technical experts—mostly business professionals from the United Kingdom rather than social scientists or legal experts—are playing a critical role in the platform’s decision-making, its design of measurement tools, and its interpretation of legal norms. While their specialized knowledge and political neutrality can be a benefit for policy making, it is difficult for stakeholders to challenge the power of experts and their methodology and assumptions in producing indicators. While limited opportunities exist for public and NGO participation in Sedex’s governance, there needs to be more transparency as to the methodology behind its metrics to allow for critique and continuous improvement.
Sedex’s leadership, including its Executive Team and Board of Directors, consists primarily of business professionals from the United Kingdom. Its Executive Team includes business leaders with experience in management, information technology, finance, communications, human resources, and business development. Since Sedex is headquartered in London, most of the executives come from the United Kingdom (with the exception of the managing director for Asia, who comes from China, the director of finance, who is from South Africa, and the director of corporate affairs, who is from Australia). Sedex’s Board of Directors also consists mostly of business professionals, who have experience in retail, the food sector, the apparel industry, and sustainability consulting, and are mostly from the United Kingdom (with the exception of one board member from Bangladesh and one from Australia). While the board includes executives who work on ethical sourcing (for example, the head of global ethical policy at BBC Worldwide) and one who has a joint degree in law and business (but, otherwise, no legal experience), there are currently no lawyers on the board or executive team who could provide legal expertise as to the interpretation of modern slavery norms. Moreover, Sedex’s leadership does not include social scientists or any nonbusiness actors who could offer unique perspectives on human rights and supply chain issues.
Yet Sedex does offer limited opportunities for public consultation through its Stakeholder Board and Stakeholder Forum, which include a limited number of NGOs and other non-Sedex members. The Stakeholder Board is tasked with developing recommendations to support the mission and objectives of the organization; representing the interests of all stakeholders; and nominating board representatives.Footnote 15 It includes twelve organizations, including sustainability consulting firms, industry groups, supply chain technology firms, a global certification scheme for labor providers and recruiters, a global risk analytics firm, and two international multi-stakeholder initiatives (the Carbon Disclosure Project and the UN Global Compact). The Sedex Stakeholder Forum (SSF) brings together leaders and practitioners from across the ethical trade and responsible sourcing industry to discuss the challenges they face and solve problems collaboratively (Sedex 2016a, 5). Members of the SSF also provide guidance and direction to Sedex staff and help them develop products and services that will most benefit Sedex members. Participation in the SSF is available to Sedex members, audit companies, and nonmember associates, who can include representatives from NGOs and trade associations that must pay a fee for membership based on income level.Footnote 16 Nonmember associates must be approved by Sedex and need to “demonstrate that their activities are consistent and aligned with those of the SSF” (Sedex 2016b, 8). According to the SSF’s terms of reference, “[c]onsultancy companies, other similar service providers and subject matter experts will be invited to provide specific subject matter expertise and input to workstreams as needed but are not eligible to be full participative members” (4). Furthermore, the number of non-Sedex members in the SSF is capped at 20 percent of the total SSF membership.
While Sedex’s governance structure provides limited opportunities for participation by NGOs and other non-Sedex members, there is a lack of transparency as to the methodology for producing Sedex’s forced labor risk scores and deciding how many strong/possible indicators should warrant a determination of forced labor. As a result, it is difficult for the public to understand and critique Sedex’s compliance tools, which then run the risk of promoting business interests rather than public interests. Given the technical nature of indicators and other metrics, experts should naturally play a role in their design. However, there is a risk that the management professionals that dominate Sedex’s leadership may exercise significant influence over decision-making, exhibit conflicts of interest, and leave little room for public contestation. Ensuring citizen participation is especially critical in the use of indicators, whose scientific authority makes them less open to being challenged by external parties.
CONCLUSION
This article has examined how ill-defined legal norms around modern slavery are being outlined in supply chain legislation and then interpreted by management professionals. Building on an infrastructural analysis of supply chain governance, I have uncovered the set of practices that underlie supply chain regulations around modern slavery. I have followed the chain of translation by which supply chain information is transformed from qualitative, unstructured data replete with contestations over the determination of modern slavery on the ground, to quantitative indicators and scorecards of modern slavery risks, and, finally, to companies’ statements that summarize efforts to eradicate modern slavery in their supply chains. As part of this analysis, I have focused on the critical role of Sedex, a platform for sharing responsible sourcing data. While Sedex is not an auditor and is not governed by lawyers, it is nonetheless playing an important role by interpreting human rights norms and facilitating the implementation of recent supply chain disclosure laws.
By serving as a governance authority with respect to the interpretation of legal norms and the implementation of supply chain laws, Sedex is filling a vacuum left by governments as they have failed to offer adequate guidance on vague legislation. Yet Sedex’s expansive role carries potential costs, including the promotion of superficial compliance through an overreliance on quantitative indicators and the dominance of business interests without sufficient citizen engagement. While Sedex’s governance structure provides limited opportunities for participation by NGOs and academics, there is a lack of transparency as to the methodology behind Sedex’s indicators and risk scorecards.
In order to avoid capture by technical experts and the promotion of industry interests at the expense of public interests, Sedex should provide more transparency as to its metrics and how they should be used. In addition, it should adopt an evolutionary approach to the design of its compliance tools, which would allow for periodic review and revision of its indicators by interested parties. Metrics should be incrementally revised and updated to reflect lessons learned and the changing expectations of stakeholders as well as to provide further opportunities for comment by parties underrepresented in Sedex’s governance (including workers and unions). Such an approach has been used by the Global Reporting Initiative, a nonprofit organization that has produced several generations of corporate sustainability indicators based on multi-stakeholder engagement.Footnote 17
Given the vagueness in recent supply chain legislation and the often generic statements produced by companies, governments need to provide more guidance on the interpretation and implementation of the laws. Australia has begun making an effort in this regard by providing explanatory information concerning the definition of modern slavery as well as case studies and examples for each type of modern slavery. The United Kingdom is also focused on improving the poor quality of modern slavery statements. In response to an independent review of its legislation released in 2019 (UK Home Office 2019b), the UK government agreed to revise its statutory guidance in 2020 and include a template of the information that organizations are expected to provide on each of the six areas cited in section 54 of the act (UK Home Office 2019a, 8). While the proposed guidance and template would promote standardization across statements, governments should also require companies to report on the performance indicators that they use and the data behind those metrics. Such information should include how business decisions are informed by the indicators and how companies translate metrics into conclusions about their modern slavery risks. Furthermore, companies should be required to provide detailed information on the issues that matter most, such as their supply chain due diligence process and risk assessment outcomes, which are currently underreported or reported with minimal detail (Ergon Associates 2018, 13). This would better enable stakeholders to evaluate and compare corporate performance. Finally, governments should consider legislating financial penalties for non-compliance and investing resources to enforcement. In the absence of such measures, third-party service providers such as Sedex will continue to exercise considerable authority in the interpretation and implementation of modern slavery legislation.
