Exploitation 'rampant' in NZ supply chains, research suggests

Thursday, 15 June 2023

New research has painted a bleak picture of New Zealand businesses’ attitudes towards exploitation and slavery in their international supply chains.

Half of the 200 businesses surveyed for the World Vision reportRisky Business: A Modern Slavery Risk Profile of New Zealand Businesses did not know where their products were being made, who was making them or whether modern slavery was involved.

The report found the New Zealand retail market was probably flooded with goods made under questionable circumstances. Nearly all businesses surveyed were found to be purchasing products or services likely to be made using child labour or forced labour.

Electronics, textiles and even food and beverages goods were at risk of being made using child labour or forced labour.

Almost three-quarters of businesses said they had no initiatives in place to address modern slavery, and nearly half did not know where their products came from beyond their direct suppliers.

A third were found to have little or no understanding of modern slavery risks within their supply chains.

Kantar Public surveyed 214 businesses of different sizes and from a range of different industries to get this information.

World Vision said the research provided baseline figures on the proportion of businesses that might be using high-risk services or products.

World Vision New Zealand head of advocacy and justice, Rebekah Armstrong, said modern slavery reporting obligations by businesses needed to be written into law to stamp out exploitation.

“Most Kiwi businesses have not taken any steps to address modern slavery in their supply chains and what’s even worse is that New Zealand doesn’t have a law in place to require them to do so,” Armstrong said.

“It’s the 21st century and we should all have zero tolerance for slavery. It’s time New Zealand led from the front and introduced legislation to guide our business community to do the right thing and protect the hard-working people who make the products we buy every day.”

Armstrong said New Zealand businesses lacked understanding of the true extent of the risk of modern slavery in their supply chains.

She said it was disappointing to learn that only a third of businesses had taken any steps to address modern slavery.

New Zealand lags behind Australia, Britain, Canada and several European nations, which have already introduced supply chain transparency regulation and laws to address modern slavery.

Modern slavery legislation was introduced in Australia in 2018, and seven years ago in Britain.

An estimated 50 million people are said to be trapped in slavery worldwide, about 30 million working in supply chains, with most believed to be in the major manufacturing countries of India, Bangladesh and China.

World Vision is urging Government to advance its modern slavery bill to Parliament ahead of the October election.

In March 2021, more than 100 businesses signed an open letter in favour of modern slavery legislation, and in December Workplace Relations and Safety Minister Michael Wood said the Government expected to introduce a modern slavery bill before the end of its current term.

Two-thirds of businesses surveyed said they felt they did not have sufficient influence to drive their suppliers to address modern slavery.

The survey found that just one in every five businesses felt they had a lot of visibility of their supply chain.

And, on average, small businesses were found to be as likely to source products at high risk of modern slavery as medium to large businesses.

Without knowing what was happening in their supply chains, New Zealand businesses could be an unwitting part of enslaving people, Armstrong said.

She said modern slavery reporting obligations would be beneficial for organisations that sourced and manufactured high-risk products, including garments, electronics, footwear, toys, textiles and furniture, from high-risk producing countries.

“There’s a real gap in New Zealand companies’ understanding of their supply chains or products and services they are using that are implicated with child or forced labour modern slavery,” Armstrong said.

“Without legislation, it is very unlikely that New Zealand companies will front foot this and put in practices that do protect from and mitigate modern slavery in supply chains, and this is concerning because New Zealand is lagging behind so many other countries in terms of the way we do business.

“Understanding your supply chain and addressing modern slavery is such an expected way of doing business today.”

Earlier research by World Vision found that New Zealand imported about $3 billion worth of products at risk of being involved in modern slavery every year.

Mindful Fashion chief executive Jacinta FitzGerald said the textile and fashion industry was one of the worst offenders when it came to modern slavery – she put it down to supply chains being long and complex, and therefore difficult for retailers and brands to properly track.

She said exploitation in the industry had become more rampant over the past 20 years as production volumes had increased.

“There have been massive increases in the volume of production, a massive reduction in price of goods on the market and a reduction in timeline of goods coming to the market. Things are happening much more quickly yet at a much bigger scale, therefore we are seeing that corners are being cut.”

She said New Zealanders retailers she had dealt with were working to improve transparency and their processes.

“It is really complex and in some cases, factories/mills they may be working with overseas are not prepared to disclose their own suppliers and so there are road blocks very often. There is a fear with some offshore mills and suppliers that if you know who supplies them the fabric then you’ll go directly to the fabric supplier and cut them out.@