Proceedings from The Oxford Business Poverty Conference

83 [I should say modern slavery, as a term, tends to include lots of things, in addition to what I just mentioned two minutes ago, like, for example, domestic servitude, certain types of prostitution and so forth.]

What I was particularly interested in, though, was where modern slavery fed into conventional legal industrial supply chains. So if you go into the super market in the UK, what you will find are vegetables there, and there is a chance these vegetables are produced with slave labor, with seasonal agricultural workers often from Latvia or other Eastern European countries. Eighty percent of the seasonal agricultural labor in the UK comes from Latvia and similar countries.

So, this is an interesting problem. I began by exploring some of the cases where modern day slavery exists with the hope of understanding how it can be tackled. A particularly problematic paradox came to light, which I’ve been struggling with and I’d be interested in hearing anybody’s views about it, which is this: All the major supermarkets have fantastically well-developed procurement processes and supply chain activity for auditing and certifying supplies and they put quite a bit of effort into this. They also have very well developed corporate social responsibility and business ethics policies.

They’re all pretty much interchangeable, you can’t tell much difference between the firms, but they all do things and have lots of people working on these issues at the supermarket companies. On the other hand, these terrible practices go on and they still persist. I was interested in how that could be so.

I think there is a kind of a paradox in that the same kind of organizations that are putting a lot of effort into improving supply chain behavior and so forth are also exactly the same companies which are perpetuating the economic conditions that make such exploitation almost inevitable.

One thing we know about the UK is that we have a small number of extraordinarily powerful supermarket companies which control a vast percentage of the grocery market. These firms are extraordinarily powerful. It’s an extremely competitive market these firms are involved with and this has worked incredibly well for consumers as can be demonstrated by the fact that the prices for food and other products bought in these stores have plummeted over the years.

These prices have fallen to the point where there is a basic fact that most people recognize. The things we buy at grocery stores in this country are absurdly cheap. The consequences of this are that, mapping down the supply chains, the people at the bottom of the chains are really struggling.

There’s also been systematic bad behavior by all of the supermarkets in terms of demanding, for example, certain price reductions from their suppliers. In addition, they have been demanding payments from suppliers in order that the suppliers be kept on the supermarkets’ shelves. Furthermore, the supermarket companies have been extraordinarily slow in paying their suppliers.

Indeed, this has gotten so bad in the UK that the government has set up a government regulator just to police normal contractual behavior between supermarkets and their first-tier suppliers. So, I think this raises a question for those of us interested in poverty and ethics and business, because it points out to