Transcript of a Briefings Direct podcast on how Ariba and Made in A Free World have joined forces to give companies a deep insight into their worldwide supply chains.

1. Detecting and Eradicating Slavery and Other Labor Risks
Across Global Supply Chains through Business Networks
Transcript of a Briefings Direct podcast on how Ariba and Made in A Free World have joined
forces to give companies a deep insight into their worldwide supply chains.
Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android.
Sponsor: Ariba
Dana Gardner: Hello, and welcome to a special BriefingsDirect Podcast series, coming to you
from the 2015 Ariba LIVE Conference in Las Vegas.
We're here in the week of April 6 to explore the future of business commerce.
We'll learn how innovative companies are tapping into business networks to
harness the power of communities, to discover, connect and collaborate with peers
and partners across the street or around the world.
Not only are these leaders better managing their spend in buyer/seller interactions,
they're also gleaning insights and intelligence to learn from the past, capitalize on
the present, and chart an effective course for the future, all in real-time from a
single platform.
I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of
Ariba-sponsored BriefingsDirect discussions.
Our next business networks best practices panel discussion focuses on the issue of unsavory and
illegal labor practices that may be hidden deep inside supply chains
and what companies and consumers can do about it.
We’ll hear from Made in a Free World, a nonprofit group in
San Francisco. It's partnering with Ariba, an SAP company, and regulators to shine more light
across the supply chain to not only stem these labor practices, but also reduce the risks that
companies may unwittingly incur from within their own ecosystems.
To explain some practical and effective approaches to forced-labor risk determination and
mitigation, we're joined by our guests. We're here today with Tim Minahan, Senior Vice
President of Ariba, an SAP Company. Welcome back, Tim.
Tim Minahan: Thanks, Dana, it's great to be here.
Gardner: And we're here with Justin Dillon, CEO and Founder at Made In A Free World in San
Francisco. Welcome, Justin.
Gardner

2. Justin Dillon: Thanks, thanks for having me, Dana.
Gardner: Our pleasure. Justin, tell me how Made In A Free World came about?
Non-profit organization
Dillon: Made In A Free World is a nonprofit organization that was started few years ago. I
learned about the issue years ago, almost about 10 years ago now, just reading an article in The
New York Times, and really wanted to figure out a way to get more people
involved, not only in knowing about it, but in finding very practical ways to do
that.
So that started with consumers, just everyday individuals getting involved and
being able to leverage their own network, their personal networks. That's now
graduated into figuring out how to get businesses to leverage their own
networks.
Gardner: What is the problem we are talking about? Is this slavery? Is this breaking the law in
terms of labor regulations, tell me a bit about the panoply of issues that you embrace?
Dillon: Just for definition’s sake, we define slavery as anyone who is being forced to work
without pay under threat of violence, being economically exploited and unable to walk away.
There are over 30 million people who fall under that definition today. In some cases, these people
find themselves in the sex industry, but in most cases, they're in informal sectors, agricultural or
service industries, much of which is finding its way into supply chains.
Part of what we believe is that we have to find a way to be able to connect the dots and figure out
how we can use the systems that currently exist to protect the world's most vulnerable resource.
Gardner: Justin, you've been working on this for 10 years, but Tim, why is this becoming such
an important issue now for businesses?
Minahan: Over the past decade, as companies begin to outsource more processes
and manufacturing and assembly to low-cost regions, they've really looked to drive
the cost down. Unfortunately, what they haven't done is really take a look at their
sub-tier supply chain.
So they might have outsourced a process, but they didn't outsource accountability
for the fact that there may be forced labor in their suppliers' suppliers. That's a real issue, getting
that transparency into that problem, understanding whether there's a potential risk for the threat
of forced labor in a sub-tier supply chain.
Dillon
Minahan

3. Gardner: Tim, how big a problem is this in terms of scope, depth and prevalence? Is this
something that happens from time to time in rare instances or is this perhaps something that's
quite a bit more common than most people think?
Minahan: Dana, this is far more pervasive than most people think. Slavery really has no
boundaries. There are incidences of forced labor in all industries, from conflict minerals in the
Congo to fishing in Malaysia to, unfortunately, migrant workers right here in the United States.
Gardner: Justin, any additional depth that you can add to how this manifests itself and how
common it really is?
Palm oil problem
Dillon: It's really not a problem that “exists over there." Just one statistic alone: by 2020, half
of all the products you can purchase in a grocery store will have a commodity, palm oil, which
has a huge incidence of forced labor, particularly around the Malaysia region and Indonesia.
This small commodity, mostly because it's so easy to pick and harvest, is now finding its way
into a myriad of products -- and that's just in agriculture.
Gardner: And if there is, why should companies be concerned? Isn’t that not someone else's
issue, if it’s below the level of their reach?
Minahan: You can certainly outsource process or manufacturing, but you can’t really outsource
accountability. Secondly, there is a big movement afoot from regulators, both here in the United
States, Federal laws, California state laws, as well as overseas in the UK to hold companies
accountable, not just for their first-tier supply chain, but for their sub-tier supply chain.
Gardner: And, Justin, of course visibility being so prominent now, a camera around every
corner, social media, people can react, damage can be done, irreparable damage to a company's
reputation. Do you have any examples of where this has come to bear, where not knowing what's
going on within your supply chain can be such an issue economically and otherwise?
Dillon: Well, people love to hate the ones they love. So everyone is complaining about Apple
products, while they're using their Apple iPhone. But in a recent article in The New York Times,
one of the supply-chain folks for Apple said that the days of sloppy globalization is over and
they're taking this quite seriously. I would argue that some Apple's work is some of the most
innovative human rights work that we've seen.
They've dug deeper down into the sub-tier suppliers and, if their reputation as innovators has
anything to do with their products, it certainly has to do with their supply chain as well. They are
a great example of a company who sees these challenges, sees the connection to not only their
brand, but also to their products and they're taking some remediative work against it.

4. Gardner: Okay, we understand the depth of the issue and why it’s important. Now, now how do
we do get the tools to combat this effectively? What have you done? I understand you have a
database, and it’s ongoing. Tell me a little bit about the tools that you’re bringing to bear to solve
this problem and to help companies take better accountability.
Dillon: The most important thing to do first is to realize where we are in history. We aren't
operating in the '90s anymore, in the sweatshop era. That was an era that where we found
problems in supply chains and we started to build solutions around that, auditing, monitoring, all
the rest of that. That was 25 years ago.
Era of big data
We're now in the 21st Century, in the era of big data, and we need to be able to use those tools
to be able to combat 21st Century problems. For us as an organization, we've realized this was a
space where we could be helpful to business. Our mission is to use the free market to free people.
That’s what we do as an organization.
We've realized that there is a lot of data missing, and there is a lot of synthesis of data missing.
So we, as an organization, decided to pull together the bible of databases, when it comes to
supply chains, the UNSPSC. Then, we built off of that taxonomy a risk analysis on every single
thing good, service, or commodity that can be bought or sold. That becomes the lingua franca, so
to speak, when it comes to supply chain, risk management.
That database and analysis are now available to anyone, any size, any sector, to leverage their
influence to the extent that they can. We've recognized that you can't be everywhere at all times
but you’re somewhere at some times and that's the place we feel like any company can make the
greatest influence.
Gardner: Now, Tim, the labor issues that we’re talking about are certainly a risk issue, but at the
same time, we’re looking to find more ways to automate and make visible other types of risk,
any kind of risk, in the supply chain in procurement, buy-and-sell environment.
Tell us a little bit about how this particular risk fits into a larger risk category, and then how the
databases for each of them, or many of them, come together for a whole greater than the sum of
the parts.
Minahan: As Justin said, the information here is shining a light on a particular issue, being able
to mass, for the very first time, data points from hundreds of different data sources around the
world to predict and project the threat of forced labor.
Extending that further, that's one risk indicator that companies need to manage. Companies are
managing a whole host of sustainability issues around social and eco-responsibility, but also
financial risk, and threat of disruption risk.

5. Being able to pull all those together into a common risk factor is what we're attempting to do
through the power of business networks. By connecting the world’s businesses and connecting
their supply chains and automating their processes, that was phase one.
Phase two is harnessing all the information from all of those interactions to provide a better level
of visibility that raises that transparency for everyone. Then, you can predict future risk. Being
able to tap into what Made In A Free World has done in this particular area, pull that into the
network, and expose that as another risk factor that companies can evaluate is a very powerful
opportunity for us together.
Gardner: As we've seen in other aspects of the networked economy, the better the data, the more
influence, the more action as a result of that data, that encourages more people to see value and
add more data back into the pool and so on and so forth. Tell us a little bit about the news here at
Ariba LIVE and how that works into this notion of a virtuous adoption cycle.
New partnership
Minahan: Ariba and Made In A Free World are announcing a new partnership to bring the
power of the Made In A Free World database together for predictive analytics of forced labor
with the power of the Ariba toolset and the Ariba Network to help the Global 2000 and beyond
be able to have the transparency they need to identify potential risk, in this case, of forced labor
and their supply chain, and be able to take action and rectify it.
Gardner: Justin, how do you see this announcement benefiting your cause?
Dillon: Well, it moves us past the point of saying there is nothing that you can do as a company.
That is no longer an option on the table. What you're going to do is the next question. We have
removed the word ‘if’ in this conversation and we couldn’t have done that without Ariba.
Gardner: So we have a private and a non-profit, and there is also the public sector, governments,
regulations. It must vary from region to region and country to country. Is the awareness that you
are creating from such announcements also impacting what happens in the public sector and in
the regulation field.
Dillon: It truly is a virtuous tsunami of activity that’s happening in government. We've been
doing this for a while and we've realized that it requires the public, the NGO, and the media. We
all create this ecology of movement around this, but we're seeing this happen in the federal
government as well, particularly our country’s supply chain, when it comes to being the biggest
buyer in the world.
There are now standards that are not suggestions. And being able to step up to those standards
and exceed in those standards is going to become the new normal. We're a part of that database
as well, if you will, that network. And we can see how the Ariba Network is going to be helpful

6. in that, because companies are coming to us and coming at the federal government saying, "What
are we supposed to do? How do we move forward? This seems like a huge problem." They're
right, and the solution is right in front of them.
Gardner: Tim, for organizations that are now more aware of this problem and of the general risk
issue across supply chains, how do they start? Where do they go to begin the process for getting
better control that allows them to have better accountability?
Minahan: That’s exactly what Ariba and Made In A Free World are trying to do -- provide the
tools necessary for companies to get started. We mentioned together the technical solution that
we 're bringing to bear to allow folks within the Ariba community to be able to access the Made
In A Free World input and be able to project potential issues of forced labor in their supply chain.
We've been working together as organizations for a number of years now and we've been
working collectively with the Ariba customer community to help understand this issue, to help
dig into this issue, and begin to share best practices on how to get started. Together, through that
effort, we've developed a playbook that provides suggested guidelines for folks to get started.
In addition, there is a whole ecosystem of companies that are really looking at this issue hard.
The thing that’s most exciting about it is that everyone is very transparent and they're willing to
share. So you have companies from Patagonia to Apple and the like that are sharing their
practices freely, because this is an issue that we want to address. The business world has the
opportunity to address probably the most serious issue facing us today, and that is modern
slavery.
Learning more
Gardner: Justin, any suggestions for resources that companies and individuals can go to, to
learn more about this to take a start themselves?
Minahan: Well, you can’t fix what you don’t know about. You can’t improve without having
some understanding of where you fit in the mix. We believe that data and doing an analysis on
the freedom platform is the best way for a company to get started.
We think it’s the best synthesis of practices, data, influence, and the network effect that anyone
can begin to take. We suggest that they start to look at their own risk based on what they are
buying and based on their own exposure. Every company that comes to us, we're able to do this
risk analysis with them, and they're are getting new insights.
What’s great about being at this point in the story is that we're already getting from our partner
companies ideas about how to improve and what to do better. We have every expectation that our
partnership with Ariba is going to improve this tool, not just for us, but for the planet.

7. Gardner: Just quickly, Justin, how does it work? When a company comes in and gives you
information about who their suppliers are, how do you come up with inference, insight and some
sort of a predictive capability that identifies the risk or the probability that they could be in
trouble?
Dillon: We are using all the best databases that currently exist on the issue. Everything from
forced-labor databases to child-labor databases to rule-of-law, governance, migration, trade
flows. All of that is synthesized into an algorithm that can be applied to any individual’s spend
data. You're able to get a dashboard on all that spend, which gives you some optics into your sub-
tier suppliers, which is where we need the optics. It’s not a crystal ball, but it’s the next best
thing.
Gardner: It strikes me that this is a game of numbers. If enough companies examine their
supply chain sufficiently and then eradicate the areas where there is trouble, the almighty Dollar,
Peso, or what currency it may be, comes to bear, and things like corruption don’t work and bad
labor practices don’t get supported. Is this a rolling-thunder sort of thing. If so, what’s the
timeframe? Is this something that can be solved in a fairly short amount of time if people
actually come together and work on it?
Dillon: To me, it’s the greatest story ever told. This is the thing that we all appreciate, and
frankly we all benefit from it. We're all benefiting from a free market and the way that we look at
change in our organization is that we say that change is more about judo than karate. How can
we use the force against itself to actually change it, and the marketplace is the way to do that.
So yes, this can move quite quickly. In my opinion, it's much quicker than governments can
move. We think that they're going to be followers in this case and we highly expect them to be
followers.
Gardner: Tim, if companies do this right, if they leverage data, if they examine risk properly,
what do they get, other than of course the direct reduction of that particular risk? It strikes me
that we are not just tackling risk, but we're putting into place systematic ability to manage risk
over time, which is way more powerful. Is that what we're going to get?
Looking at risk
Minahan: Absolutely. Companies are looking at risk holistically, and this is one key vital
input into that. As they continue to address that and, as Justin said, we're using free markets as a
powerful lever to free people. They can, through their buying patterns and their buying policies,
begin to adjust the market, shine a light not just on their own supply chain but change the sub-
tier supply chain practices to make sure that there is fair labor. It becomes unappealing to have
forced labor and it becomes a detriment to their ability to win new business by doing that.
That's really what the power of data and the power of business networks can deliver in this
scenario.

8. Gardner: Last word to you, Justin. What’s missing here? What did we not talk about that a
company should be aware of in order to get a better handle on this to benefit themselves, the
ecosystem,, and ultimately workers in a far-off land perhaps.
Dillon: Businesses are the heroes in the story. It's not the non-profit, and it’s not government.
Anytime you associate business with human rights, businesses are often qualified as Darth Vader
who actually think that they are Luke Skywalker in the story. And for us an Ariba, I don’t need to
put that on them, but we are just Yoda.
We're giving them the tools that they need to fight the evil empire and we are going to do it
together and celebrate it together. But this is one thing that we'll have to do in concert. We all
have individual roles to play, and business has a very clear, distinct role to play.
Gardner: Very good, I am afraid we will have to leave it there. We've been exploring the issue
unsavory and illegal labor practices that may be hidden deep inside supply chains and what
companies and consumers can do about it.
So a big thanks to our guests. We've been joined by Tim Minahan, the Senior Vice President of
Ariba, an SAP Company. Thank you, Tim.
Minahan: Thanks, Dana.
Gardner: And we've also been joined by Justin Dillon, CEO and Founder at Made In A Free
World in San Francisco. Thanks, Justin.
Dillon: Thanks so much.
Gardner: And thank you to our audience for joining this special Podcast coming to you from the
2015 Ariba LIVE Conference in Las Vegas.
I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of
Ariba-sponsored BriefingsDirect discussions. Thanks again for listening and come back next
time.
Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android.
Sponsor: Ariba
Transcript of a Briefings Direct podcast on how Ariba and Made in A Free World have joined
forces to give companies a deep insight into their worldwide supply chains. Copyright Interarbor
Solutions, LLC, 2005-2015. All rights reserved.
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