Sit down at a restaurant and you’ll be bombarded with elaborate menu descriptions of how nourishing your dish is. As fast food struggles and wellness grows, evidence is on the rise that we take food — and its impact on our well-being — very seriously indeed. But what about the well-being of those who worked to put that produce on our tables and how can your supply chain make an impact?
While choice and convenience are powerful drivers when it comes to what we buy, new research by the Fair Work Ombudsman confirms that we also care about whether the products we’re consuming are guilt free.
According to its findings, 16 per cent of people would be willing to pay up to 50 cents more for fruit and vegetables that were picked by properly paid workers, while 12 per cent would pay up to a dollar more. Forty per cent of the 1,000+ people surveyed are concerned that workers are not being paid the minimum wage or working in fair conditions. Research by Junkee shows this concern about fairness is even greater among our younger generations — and their purchasing power is on the rise.
A wider problem
Yet the scale of modern slavery remains enormous. For a long time, second and third-tier suppliers have gone without scrutiny, so unfair and abusive practices have crept in. The International Labour Organisation estimates there are almost 25 million victims of forced labour worldwide.
In many advanced economies, forced labour and wage exploitation is a prevalent but hidden horror. The Global Slavery Index 2018 reveals that there are 15,000 people experiencing modern slavery working conditions in Australia. Many local companies recognise this growing issue, including NuFarm. It is embarking on a company-wide commitment to ensure its suppliers uphold human rights and labour practices of their employees.
Leading the charge
There is a growing trend toward acknowledging the crisis of modern slavery in legislation. Australians should be proud that New South Wales recently passed the Modern Slavery Act, which requires businesses exceeding $50 million in annual revenues to slave-proof their supply chains. The United Kingdom enacted its own Modern Slavery Act in 2016. This legislation will motivate more businesses to take concrete steps towards ensuring the integrity of their extended supply chains.
Procurement with purpose
But there are other reasons to act. Research shows businesses that do good, do well. Showing you undertake procurement with purpose sets your business apart with potential employees and investors.
The good news is that keeping track of what suppliers throughout the chain are doing has become much more manageable. Technology platforms like digital procurement networks provide organisations with new-found visibility into their supply chains, enabling them to quickly and easily evaluate trading partners against huge volumes of data points.
But just as the problem itself is about people, so is the solution. Businesses must make sure boardroom tables have seats for people like chief procurement officers. These people are needed to turn the insights generated through procurement technology into meaningful action, collaborating with their c-level colleagues.
The old view of ‘what happens in the supply chain, stays in the supply chain’ simply won’t fly anymore. Those that fail to recognise this will pay the price for complacency through lost revenue opportunities, talent retention and legal action. Unless you serve what customers want with ethics baked in, it’s increasingly likely to leave a sour taste.
Henrik Smedberg, RVP SAP Ariba ANZ
This blog appeared originally as an article in The Australian on Tuesday 27 November 2018.
Tags: ethical, modern slavery, procurement, purpose, supply chain