BREAKING THE CHAINS

In the view of many, blockchain technology is a hype word describing the fairly complicated, unclear, difficult to understand computer network which was supposed to change everything but has changed little. It was supposed to be this revolutionary tech that was going to change the World but which finally doesn’t do anything more than what a well-maintained Excel spreadsheet can do. These views are very similar to what an average person would probably think back in 1989 when she/he would hear that Sir Tim Berners-Lee of CERN invented the thing called “world wide web”. The rest of the story is well known… WWW has changed the World for the benefit of humanity.

In a similar manner, blockchain finds its applications in more and more domains, industries and is changing the ways we think of many areas. But can blockchain do any good like the world wide web did 30 years ago? Indeed, blockchain can be one of the tech enablers for addressing some of the most tragic breaches of Human Rights in current times — The Modern Slavery and Exploitation.

According to the CNN Freedom Project despite the abolition of trans-atlantic slave trade more than 200 years ago, it is estimated that there are more than 40 million men, women and children in slavery around the world. This is clearly a shocking number for the 21st century taking into account Article 4 of the Universal Declaration of Human Rights which states simply and boldly “No one shall be held in slavery or servitude”. Modern Slavery may involve multiple forms such as human trafficking, forced labor or debt bondage. All three of these aspects of modern slavery involve an important common motive: exploiting people to perform work against their will for no or little compensation.

According to Antislavery.com more than 24 million people are trapped in forced labor worldwide. One of the main reasons enabling such a spread of forced labor are long and complex supply chains which make it difficult to establish who are the actual bottom-lever Tier suppliers of final products and who is actually working where and under which conditions. The affected sectors include electronics, agriculture, fashion and other industries. As stated by Ariel Clay it is wise to note that many large fashion brands do not have full control over their supply chains, thus making illegal work practices possible (including sweatshops, trafficking and servitude). Moreover as illustrated in this video by Standard Chartered only 6% of businesses have full visibility on their supply chains leaving an immense swath of space for malicious business practices including modern slavery and other forms of abuse.

/statista.com

This is exactly where blockchain technology comes into play: deciphering the long, complex global supply chains. Some of the most intrinsic properties of blockchain such as immutability of recorded transactions, automatic traceability of records and high level of data security thanks to cryptography make this technology an ideal enabler for more transparent supply chains. Each step of product manufacturing can be recorded on-location including for example GPS location at a given point of time and place of occurrence. This makes counterfeiting of information about the location and time of manufacturing much less likely as the effort for the generation of falsified information starts to generate larger costs — the exact opposite of what abusers of forced labor need. Blockchain’s decentralized nature makes it a perfect fit for deployment across multiple global sites with multiple stakeholders who at each level are required to guarantee compliant and abuse-free manufacturing processes of any goods.

Blockchain as technology has therefore potential to bring tech-enabled transparency into deep, complex and global supply chains. Transparency in terms of immutable records of locations and timestamps related to the occurrence of individual manufacturing steps within the supply chain. This makes verification of compliance to slavery-free supply chain requirements much easier. For example, considering the fashion industry, manufacturers of clothes would now have the opportunity to force the full supply chain of a given product to enter information about each manufacturing step in a blockchain system. This means that the location record of each manufacturing step must be the same as the intended actual physical location of that given manufacturing step. Together with the immutable timestamping of such blockchain records, their counterfeiting becomes less likely. This way blockchain recording of supply chain steps can contribute to the improvement of supply chain transparency and thus reduction of modern slavery risks.

Solutions for transparent supply chain management are available already in other industries. For example, 3IPK develops supply chain management solutions for highly regulated environments such as the aerospace industry. These industry segments are characterized by stringent regulatory frameworks which require, for example, aircraft manufacturers to be able at any time to document and prove the origin and history of any component. These requirements for traceability have been put in place in order to guarantee safety to passengers. Implementing similar solutions in other industry verticals is a matter of choice not a matter of technical barriers as systems such as the ones developed by 3IPK can be easily configured to provide blockchain-based recording capabilities to any manufacturing or supply chain environments.

Additional supply chain oversight measures bring, of course, additional costs. One of the main advantages of blockchain is the low costs of transactions at the given data security level when compared to centralized solutions providing the same level of performance and data security. However, disregarding the marginal costs, is it not in our interest to pay more for transparent supply chain information about the food we eat, about the piece of clothing we wear and to be more confident that the products we consume were produced with less likely involvement of forced labor — the most common modern slavery practice?

3IPK develops blockchain-based solutions automating certification, supply chain and maintenance of processes for aerospace, defence & other consumer goods.