Curbing Human Trafficking with Analytics


A new analytics solution aims to solve a major supply chain problem that most companies don't know -- or wouldn't even think -- that they have: suppliers using slavery.

The Foxconn fiasco of 2012 affecting major tech brands like Apple, Samsung, and Nokia was hardly a one-time blip on the corporate-responsibility radar. Apple's forced labor woes have continued with a recent exposť about the working conditions of iPhone assemblers at Pegatron, another of Apple's contractors in China. Meanwhile, revelations broke last month that a Tesla Motors (NASDAQ: TSLA) auto plant allegedly engaged in exploitative and abusive labor practices.

Estimates from the International Labour Organization and other organizations indicate that there are presently more than 21 million victims -- men, women, and children -- of outright slavery and similarly exploitative labor practices worldwide. Dun & Bradstreet reports in an infographic that the forced labor practices of modern slavery generate approximately $150 billion in illicit profits.

On April 13, Dun & Bradstreet unveiled its Human Trafficking Risk Index, or "HTR" for short. Helping to clarify corporate "family trees" and linkages between entities and vendors throughout the procurement process, the HTR combines data from the US State Department, the International Labor Affairs Bureau, and Dun & Bradstreet's own proprietary data from 250 million global business records to pick out evidence of forced labor at specific locations along the supply chain and assign risk factors thereto on a seven-point scale. As a result, the HTR can inform companies' global supply-chain decisions so that they can demonstrate corporate responsibility and avoid those manufacturers, contractors, or other vendors who may be using forced labor.

"[T]o test the index we looked at a major consumer products company. We looked at the entire company as a whole, and the total risk index was 1.5. But when we blew out the whole family and looked at each site individually where the company manufactured its products, four of their locations scored much higher on the index," , said Moreen Romans, Senior Director of Global Risk at Dun & Bradstreet, in a D&B report. "This company has actually had issues with unknowingly using forced labor in their supply chain, and what the index showed was that the areas where that occurred were among these four high-scoring sites on the index. Now that we have the index, companies can see these hot spots and proactive about investigating them -- rather than reactive after they find out there's a problem."

Indeed, companies may unknowingly be using forced labor in their procurement of commodities because a view into the full chain of vendors and suppliers has traditionally been difficult to attain. Now, in addition to helping companies to actively ensure ethical supply chains (and, for that matter, avoiding PR fiascos), Dun & Bradstreet's HTR data can also help companies in their compliance efforts where they face mandatory auditing in nations like the US and UK -- which have regulations imposing fines and even import/export limitations on companies who fail these audits.

For Dun & Bradstreet, HTR represents just the beginning. The company reports that its "Responsible Business Analytics" area is still emerging -- and that the HTR is but the first to market within that suite of product solutions. So far, HTR is demonstrating signs of success.

"We have already identified 17,000 just among the companies on our database alone," said Romans. "There's a lot more, but that's just our first pass at it. And that's not even looking at the smaller companies that don't think they have to worry about it."

Joe Stanganelli, Attorney & Marketer

Joe Stanganelli is founder and principal of Beacon Hill Law, a Boston-based general practice law firm.  His expertise on legal topics has been sought for several major publications, including U.S. News and World Report and Personal Real Estate Investor Magazine. 

Joe is also a communications consultant.  He has been working with social media for many years -- even in the days of local BBSs (one of which he served as Co-System Operator for), well before the term "social media" was invented.

From 2003 to 2005, Joe ran Grandpa George Productions, a New England entertainment and media production company. He has also worked as a professional actor, director, and producer.  Additionally, Joe is a produced playwright.

When he's not lawyering, marketing, or social-media-ing, Joe writes scripts, songs, and stories.

He also finds time to lose at bridge a couple of times a month.

Follow Joe on Twitter: @JoeStanganelli

Also, check out his blog .

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Re: Great use for Analytics
  • 7/25/2016 8:09:06 PM
NO RATINGS

@Seth, blurry lines, slippery slope --- however you want to describe it, excuses are not to be made in our day and age. Sure, extreme poverty exists all of the world, and I have never experienced it, so what do I know. But where do we draw the line for excuses ... child labor, selling children into prostitution, selling children into armies, terrorism ... ?

Re: Great use for Analytics
  • 7/24/2016 4:19:18 AM
NO RATINGS

It's hard to be ethical if business survival depends on a murky decision.  I've never heard of any business closing shop because it's the right thing to do. 

Also, when it comes to things such as child labor the lines become blury when a country is so deep in poverty y where it's a choice of the child working in a factory or the family going hungry. 

Re: Great use for Analytics
  • 7/22/2016 8:40:57 AM
NO RATINGS

@Seth. Yes, some small businesses just starting out look for suppliers that  are cheap and available, and don't always do due diligence. However, more than one big, established business might look the other way when these suppliers are available at low cost. They are just as guilty, maybe more so, considering that they have the resources to vet their suppliers.

Re: Great use for Analytics
  • 7/21/2016 8:59:16 PM
NO RATINGS

I've glad to see this technology being used this way.  When small business start out they often just look for the least expensive vendor without anyway to verify their labor practices.  Some business have been put under when it was discovered who was making their products. 

Re: Great use for Analytics
  • 7/19/2016 8:49:18 PM
NO RATINGS

Kq4ym writes


With cultural practices commonly different than ours it's not surprising that greed will enter the company's policies


 

Now what would be really interesting would be for someone to use analytics to cook up a database of all those companies whose policies are driven by greed ... 

..

Re: Great use for Analytics
  • 7/19/2016 11:47:13 AM
NO RATINGS

@kq4ym. Yes, it's sad that 17,000 companies have been identified. Worse, think about how many of those companies are supplying products that you buy in the US. Still worse, think how many of those companies learned their business practices from the US, particularly from the historical titans of American business who thought nothing of treating workers as peons.

Re: Great use for Analytics
  • 7/19/2016 9:09:04 AM
NO RATINGS

With cultural practices commonly different than ours it's not surprising that greed will enter the company's policies. But still it's remarkable that "We have already identified 17,000 just among the companies on our database alone." Quite a shock that so many companies are involved or at the least looking the other way.

Re: Great use for Analytics
  • 7/18/2016 6:14:11 PM
NO RATINGS

Thanks lyndon for the background information on the emerging of Dr Phil, but most of all highlighting the driving force and tenacity which interest is guarded and defended. Speak ethics but live economics.

Re: Great use for Analytics
  • 7/18/2016 5:59:30 PM
NO RATINGS

..

Rbaz writes that


... here in California there was a rash of exposure from smartphone images of animal cruelty. California being such a powerful agricultural state, the emmidiate response to stem the problem was to pass a law criminalizing capturing images without prior consent.


 

Wow, that is eerily reminiscent of Texas's False Disparagement of Perishable Food Products Act of 1995, which forbids bad-mouthing beef and other Texas food products. This led to that famous 1998 lawsuit against Oprah Winfrey (for her remark on a 1996 show that learning about the possibility of getting Mad Cow Disease "has just stopped me cold from eating another burger!").

The outcome was that Oprah prevailed against the suit (because plaintiffs failed to prove she and another defendant "deliberately and knowingly" spread false information). incidentally, it was in the course of this trial that Oprah met Dr. Phil McGraw (he was a psychological consultant to her defense team for jury selection). This led to her inviting Dr. Phil on her show for many episodes, then encouraging him to start his own show ... and the rest is history. 

For more interesting stuff on this issue: Food libel laws

..

Re: Great use for Analytics
  • 7/18/2016 5:36:48 PM
NO RATINGS

Terry, here in California there was a rash of exposure from smartphone images of animal cruelty. California being such a powerful agricultural state, the emmidiate response to stem the problem was to pass a law criminalizing capturing images without prior consent. Ethics, PR, financial interest. Which of these drive the bus in the final analysis.

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