Modern slavery takes a variety of forms, but the most prominent, overarching sector it infiltrates is supply chains. From raw materials to the distribution of a final product, slave labour can be used to tarnish the origins of many things we consume without a second thought, from foodstuffs to electronics. But what if there was a way to blow this shady and opaque industry open and to the light of public scrutiny?
A Miracle Solution?
I must admit that the book Addressing Modern Slavery, written by Justine Nolan and Martijn Boersma, does briefly mention blockchain as a potential solution to some of the supply chain issues. I must also admit that I haven’t yet finished the book or reached that section yet, I just flicked forward through the index for another term and came across it – I did, however, at the mention of supply chains from the start, already begin conceiving blockchain as a possibility. Having just completed an internship with a software development company writing content about blockchain, including a section on supply chains (albeit not in relation to modern slavery), it did seem like a logical pathway.
There are, of course, many issues implementing it, which I will discuss below. These flaws and hurdles don’t entirely discredit discussion over using blockchain technology though, because like many suggested solutions it would be a long-term effort and, at the very least, would open up large swathes of the supply chain, working backwards from purchasing the final product. First, it would be prudent, for those who may be unaware, to give a brief explanation of blockchain.
I have written before about how blockchain could reshape work (in the context of decentralised and/or community owned workplaces and services in developed nations; I did refer to factory workers, and this piece happens to be expanding on that) and how we perceive our own data, but I haven’t offered much in the way of a description.
Blockchain is, essentially, an immutable and append-only ledger. The most popular and widely known ones are public blockchains, like Bitcoin and Ethereum, which anyone can access and track any transaction made throughout the history of the ledger. There are also private blockchains that only allow certain people to view transactions or carry out certain actions, for example employees might be able to view everything, but only managers can verify transactions. Private blockchains have been criticised by some (including myself) for completely defeating the purpose of blockchain technology, which is transparency.
I also use the term “transactions” loosely. Bitcoin, which began in 2009, is purely transactions using the cryptocurrency of the same name, but with the addition of Ethereum and others since then, the possibilities grew almost exponentially. Ethereum allowed “smart” contracts, first conceived in the mid 90’s by computer scientist Nick Szabo, to be created – a set of code that ran itself once certain pre-set conditions were met. Intellectual Property can be timestamped by creators who put their work or ideas onto the blockchain. More relevant to this piece, anything of value can be tracked through the blockchain. It is the last bit, and smart contracts to an extent, that offers itself to stamping out modern slavery in supply chains.
Take factories in South East Asia making clothing or electronics. Every item of clothing or every device made can be put onto the blockchain, allowing its journey to be followed from the factory floor to the shipping company and, finally, whichever company or outlet is selling it. Customers, or even outlets, would be able to check where the products were made and whether, due to the location or other factors, slave labour was used to produce it. An informed choice can then be made as to whether they want to buy something that was created via human rights abuses.
That is at a customer or merchant level, however. This could be used by merchants and companies to prevent such items from even entering their stores. A company could have smart contracts in place to have products delivered to their stores at regular intervals. This contract could be used to verify whether or not a particular factory or supplier uses slave labour. If they do, or if the origins of the product are unavailable and therefore unknown, the contract could automatically decline to order from the flagged factories. The contract could find out this information by accessing databases created by human rights groups – if a factory in Thailand is marked as having used child labour, for example, it would essentially be blacklisted until they are able to prove their practices have changed.
This makes the supply chain, on the consumer end, more transparent. Companies would no longer be able to hide where and under what conditions their products are being created, forcing them to either change their practices or face some form of legal, social, and/or reputational backlash. They would also be incentivised to do so because a failure to adopt it would raise suspicions about where they procure their items, either sparking investigation or similar public backlash. Efficiency and lower costs are already good motivators to use blockchain in supply chains, but the transparency aspect isn’t talked about anywhere near as much – that is, at least not in the corporate sector where I researched and wrote previously.
But why stop there? We can go much, much deeper than simply shipping and manufacturing – how about raw materials? We can use the cobalt and cocoa examples I’ve previously referenced from Addressing Modern Slavery as examples (I’ll feel a little dumb if the book also uses these later on). The phone you use and the chocolate you eat didn’t start at the shops or even wherever it was made into that particular product. Ingredients, parts, and materials all come together to form the final product, but every step is important.
Who created the phone’s battery? Was it another factory, and did they use slave labour? Or what about the origin of the cobalt, a large amount of which is sourced in the Democratic Republic of Congo. Was the cobalt mined using child or indebted labour? About a fifth of the country’s supply is. A little more abstract, we could also consider the packaging. Putting aside the need to remove plastic packaging from all production in the first place, was it and the boxes they come in made ethically as well?
Cocoa – 95% of all chocolate cannot properly be certified to be free of slave or child labour. Even if the people who made the chocolate have decent work conditions and pay, what about the workers who man the plantations?
Apply this scrutiny to pretty much every single product and material you can think of. If this could all be made transparent and trackable – as blockchain could allow – I am sure many consumers would welcome the ability to check the ethical implications of their purchases. It really does sound like a miracle solution that could improve the openness of supply chain management and the lives of workers who are currently victim to the hidden industries.
But is it?
Such a solution, while excellent in theory, is definitely something that needs to be worked towards over an incredibly long period of time with an absurd amount of complexity.
The first is the general knowledge and adoption of blockchain as a concept, let alone many of its more ambitious potential goals. Blockchain has taken massive hits due to the volatility of cryptocurrencies – especially Bitcoin, which has crashed a number of times – and because many confuse it as just being cryptocurrency. Given Bitcoins adoption by black markets on the Dark Web, home to services like Ross Ulbricht’s Silk Road website selling drugs or, yes, undoubtedly slave labour, the darkest of which is human trafficking and sexual violence, people have understandably been deterred. (A brilliant book on the internet’s underbelly is The Darkest Web by Eileen Ormsby).
Separating Bitcoin and its darker uses from the actual blockchain technology (keeping in mind there are many legitimate reasons for using Bitcoin as well) is one way to bring people to it. While adoption is in a slump, a majority of companies Deloitte has surveyed have said that they believe blockchain will, in the future, become important, if not critical, to their futures. Corporate domination of the blockchain space, as we have with the internet, cloud computing, etc. is worrying, especially when transparency in supply chains and auditing is the goal. If approached correctly, however, blockchain could become one of the most disruptive and beneficial technologies since the invention of the Internet itself.
The other side to this is the physical implementation of blockchain in all of these areas. It would be, relatively, easy to set it up for the consumer end. Factories and agribusiness in place liked Australia, South East Asia, Europe, etc. would be the obvious targets for this kind of transparency, and being able to track where an item of clothing, a delivery of fruit, or a phone came from is a simple example. Simple, and yet it would require a lot of infrastructure to set up, the willingness of the companies and factories, etc., and the workers having the knowledge and experience to be able to use it, as well as the right to access it in the first place.
Multiplying that out to all locations and individuals, the task is already daunting in size. Going deeper again, theoretically you could track an individual phone and then dive further to track where its components and the materials came from as well. Many remote or distant locations in Africa, South America, India, etc. would also need to implement it to get a comprehensive and complete ledger up and running. This is all, in theory, possible, but it is by no means a “quick fix” and there is absolutely no guarantee that it would catch all, if even most, of the modern slavery market. With over 40 million slaves worldwide, and many more that are probably in comparable positions, it seems impossible to see it making a significant change.
Blockchain technology could be a brilliant tool in unveiling and combating the modern slavery market, but it is by no means a miracle solution. Many idealists who are obsessed with the concept of blockchain can get carried away with just how much it can do, and it is often overlooked that it is merely a tool that we can use alongside other necessary pieces to the puzzle.
States, corporate responsibility (as much as it is), social services, Unions and other worker organisations, human rights groups, the public etc. are all important actors in the fight against modern slavery. Worker’s rights, education, appropriate migrant and prison policies, collectivism, technology like blockchain, etc. etc. are all important tools that we can use to stamp out this vile practice.
It will take time, but if more people become aware of the reality of the products they consume, hopefully the reaction to it will snowball.
Read Part 1 HERE.
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