New Technology for Supply Chain Surveillance
Supply chains in architecture, engineering, and construction, as in other industries, are historically opaque to protect supplier relationships, which are generally considered proprietary trade secrets. Whether intentional or not, the lack of transparency in supplier information has allowed forced labor used to procure and create building material supplies to continue unabated. Forced labor is most likely to occur at the beginning of the supply chain, where engineers, architects, and builders have the least visibility.
It is difficult to assess the risk of forced labor in suppliers because of the inscrutability of supply chains. At most, large public companies are required only to list their most critical suppliers, and private companies have no obligation to disclose their supply chains at any level. Standard practices for evaluating one’s suppliers involve “third party risk” assessments by large information providers, drawing on geographic and industry risk, news reports, government assessments like the U.S. State Department’s Trafficking in Persons Report1 and other sources of information. Private audits are generally not shared across customers.
Supplier questionnaires and pledges to abide by agreed-upon standards provide some procedural assurance against forced labor in supply chains, but at best, these tools provide insight into only the top two layers of a supply chain that can be considerably deeper, from finished building product to source materials and commodities. Company ESG (Environment, Social, Governance) reports and metrics are largely self-reported, very limited in coverage, and aggregated in different ways by different ratings producers.2
When media reports identify bad behavior, such as the recent scandals around forced labor in the shrimp industry,3 most of the reporting names only the well-known companies at the end of the supply chain. Very little information is provided about the identities of the suppliers and processors at the beginning of supply chains where most of the bad acts occurred. It is therefore hard for companies to learn anything further about which suppliers to avoid near the origin of the supply chain, and it is easy enough for companies to change their names and hide their role in past actions. Disclosure of company ownership is opaque in many jurisdictions, enabling the hiding of many bad acts, including the use of forced labor.
Some recent technical developments can be leveraged for these purposes, including the use of new standards based on blockchain technologies and new methods to supplement on-site audits.
Recently, U.S. Customs and Border Protection implemented a proof of concept, leveraging emerging blockchain-based technologies for making supply chains auditable while preserving trade secrets using emerging open technical standards. Supplier transaction data is stored by the source and only accessible to authorized parties, allowing organizations to selectively publish sensitive trade secrets or private information on a record-by-record basis.
Recipients of the private data can independently verify that the data retrieved hasn’t changed since the link was recorded. This approach avoids the need for all parties to submit sensitive information to a central, hackable datastore. However, such a system would enable tracking goods from bad actors to their end products and enable customers to make better sourcing decisions.
Recent developments in surveillance include the use of high-frequency commercial satellite imagery for surveillance purposes. Satellite imagery can be used to identify the locations of producers of goods potentially made with forced labor; for example, brick kilns in Southeas Asia.4 Automatic Identification System (AIS) signals can be used to trace shipments on the high seas in order to identify suspicious behavior or attempts to conceal suspicious behaviors.5 Finally, contract tracing apps, such as MIT’s “Safe Paths” project, recently in the news because of the pandemic, enable privacy-preserving auditing of movement within and without an industrial complex in ways that could provide indicators for forced labor assessments for both building materials and job sites. Similarly, “voice of the worker” apps such as “Ulula” facilitate more frequent and transparent contact with workers in potentially risky operations, creating less need for costly and defeasible on-site audits of risky plants and operations.
While none of these technologies is in widespread use yet, these all might contribute to the all-seeing provenance engine Phil Bernstein imagines above, enabling architects and builders to design buildings that are slave-free while producing and revising their design artifacts and preserving trade secrets.
[1] Trafficking in Persons Report, U.S. Department of State. 2020.
[2] Idenburg, Florian and Kölbel, Julian and Rigobon, Roberto. “Aggregate Confusion: The Divergence of ESG Ratings,” Social Science Research Network (SSRN). May 18, 2020.
[3] Htusan, Esther and Mason, Margie. “More Than 2,000 Enslaved Fishermen Rescued in 6 Months,” Associated Press. September 17, 2015.
[4] Scoles, Sarah. “Researchers Spy Signs of Slavery from Space,” Science. February 19, 2019.
[5] Howald, Blake. “Toward More Inclusive Economies: Creating a Fairer Economic System for Those Left Behind,” Trust Conference. November 13, 2019.
