The transparency gap: disclosing cases of forced labor
With an estimated 50 million people living in conditions of modern slavery in 2021, it continues to be one of the most devastating abuses of human rights globally. About half of the cases of modern slavery can be classified as forced labor, meaning that affected people are forced to work. We are all connected to forced labor in some way since it is used to produce goods we are all familiar with: from laptops and cars to chocolate bars. Companies have a responsibility — and, increasingly, a legal obligation — to identify and remedy forced labor in their supply chains. Transparency of forced labor cases is essential for all stakeholders, including civil society and consumers, to better understand how companies address the issue. But how often do companies publicly report instances of forced labor in their operations and supply chains? Are companies transparent about what is happening during the production process?
Tracking reports of incidents by companies
Since 2016, Walk Free and Wikirate have been monitoring companies reporting under the UK and Australian Modern Slavery Act through the Beyond Compliance project, including disclosures of incidents related to forced labor. The ‘incidents metric’ records examples of these concrete incidents reported in Modern Slavery Statements. While disclosing incidents related to forced labor is not mandatory under the Act, it is reasonable to expect companies to be transparent about their findings.
The incidents metric sorts reported incidents into seven different categories. The specifications for each category can be found here. Importantly, the category ‘modern slavery’ was only selected when a company specifically identified a case of modern slavery and referred to it as such.
Do companies disclose cases of forced labour?
Few companies report incidents
Only about 14% of the modern slavery statements assessed between 2016 and 2024 contain descriptions of incidents. The low rate of reporting on violations stands in stark contrast to the prevalence of forced labor in high-risk sectors observed by NGOs such as Walk Free. It indicates a lack of transparency in modern slavery reporting or the failure to implement solid due diligence processes to identify forced labor cases.
Companies disclose violations that are indicators of forced labour
Companies tend to report on incidents that point to “risks of forced labor”, such as excessive working hours, but they rarely acknowledge that forced labor cases were found in their supply chains. Such explicit disclosures were found in only 16 % of reports identifying at least one incident.
Incidents related to wages and working hours were the most commonly reported, appearing in about half of all statements containing incident disclosure. Those incidents include instances of underpayment of wages or excessive working hours. While the occurrence of just these two indicators does not always constitute a case of modern slavery, they are significant risk factors for modern slavery, suggesting instability and lack of safety in a workplace.
We also found that most companies (71%) reporting violations identified two or more types of incidents. This may indicate that companies adopting due diligence processes are more likely to detect a broad range of forced labor-related cases.
Reporting rates vary by sectors
Reports of incidents of modern slavery vary by industry. We compared reporting rates for sectors in which we had at least 100 reports.
The garment, electronics, and hospitality sectors are among the most at-risk sectors for forced labour. While in the electronics and garment sectors, about a quarter of reports contain disclosures of incidents (28% and 25% respectively), less than 1 in 10 reports from the hospitality sector disclose violations.
This data offers initial indications of reporting rates in different sectors. However, larger sample sizes for each industry would be necessary to reach more decisive conclusions.
How do companies respond to cases of forced labor?
When they do disclose cases of forced labour, how transparent are companies about their response to such cases? What kind of remediation have they put in place? Publicly reporting on remedies is essential for civil society to ensure that companies address cases of forced labour or violations in ways that adequately compensate workers.
The Beyond Compliance project tracks companies’ remediation policies. We capture the remedial actions companies report implementing — or would implement — in their modern slavery statement (Remediation Metric).
Remediation is not worker-centric
Our analysis reveals that only 49% of companies disclose the remediation processes they have or would put in place in case of violations. Worker remediation — a type of remedies that involve engaging with affected workers and focusing on their needs — is not widely adopted by companies. Given the prevalence of forced labor-related incidents in high-risk sectors, the lack of transparency regarding remediation strategies is disturbing. It is essential that companies not only report incidents of modern slavery but also take meaningful action to address them.
Conclusion
These findings shed light on the urgent need for companies to report transparently on violations occurring in their supply chains — because real change begins with transparency and a commitment to ethical practices in every corner of the supply chain.
We acknowledge the challenges associated with the disclosure of sensitive information, such as the exposure to legal consequences. However, this transparency is increasingly becoming a legal requirement, not just a voluntary measure. The German Supply Chain Due Diligence Act now mandates incident reporting, and the EU’s Corporate Sustainability Reporting Directive is setting new standards for transparency in sustainability reporting.
Both the UK and Australian governments have recently conducted comprehensive reviews of their respective Modern Slavery Acts. While these reviews signal positive intent, we need to see concrete actions that align with their recommendations. Key recommendations from both reviews include strengthening enforcement mechanisms, introducing financial penalties for non-compliance, mandating incident reporting, and establishing clear remediation requirements.
Companies should view incident disclosure not as a reputational risk but as an opportunity to demonstrate their commitment to addressing modern slavery. By reporting both incidents and their remediation efforts transparently, businesses can contribute to building more ethical supply chains and help combat forced labour.
Contributors: Tess Sheedy and Indigo Casablanca (during their internship with Wikirate), Auréliane Froehlich (Wikirate), and Abigail Munroe (Walk Free)
