Compliance Procurement Risk: Crowd-Workers

Patrick Henz

 

1984 is relevant for futurists, especially if they paint a darker picture of the future. Not only because of George Orwell’s famous novel and the introduction of “Big Brother”¹ into pop culture, but it was also the year where William Gibson finished “Neuromancer”², the book which defined “cyberpunk”. A dystopian vision, where skilled hackers work in virtual realities. The society is highly automated, but without a universal basic income or at least a guaranteed minimum salary. Humans do not benefit from the automation, on the contrary, the value of human skills are diminished, and to compete in the labor-market, most individuals augment themselves with implemented chips and software.³

 

In today’s reality, “crowd-workers” may become the modern migrant workers, as Artificial Intelligence replaces many white-collar positions, especially jobs with a higher part of repeating tasks as these skills become devalued. The replaced employees have the choice to develop new skills, or offer their existing ones for a lower salary to compete against intelligent algorithms. Organizations may outsource such jobs to personnel providers or directly to crowd-sourcing platforms. The subcontracted employees work from home, using their private computers, connected via a virtual network to their temporary employer.

 

The less variety a job includes (“flexibility”, “creativity”,) the higher the possibility that the human will be replaced. If the employee in a monotone position does not get replaced but peered with AI hard- and software like exoskeletons, Virtual Reality glasses, voice-based interphases, etc., the equipment has a high control over the person. Most AI experts predict that AI is most effective if it acts together with a human. The type of symbiosis determines the human’s position. If the individual dominates inside the relation, the salary is high. If the AI is the stronger partner in the relation, the salary is low. This in accordance with history is where employers had two options:

 

1) automate production and / or

2) ship automatization to countries with a lower income (often regions with a lower level of rule of law)

 

Slavery is by far a completed chapter from the past. The Walk Free Foundation publishes annually “The Global Slavery Index.” It reports, together with the International Labour Organization and the International Organization for Migration, for 2018 an estimated 40.3 million people living in the condition of modern slavery; witharound 70% being female. These numbers are based on local data and include predictive algorithms to create reliable data for countries without official statistics. The Walk Free Foundation includes forced labour, human trafficking and slavery, and slavery like practices into the concept of “Modern Slavery”⁴.

 

To fight modern slavery, the United Kingdom implemented in 2015 its Modern Slavery Act. The law defines that a person (natural or legal) commits an offence if:

 

a) the person holds another person in slavery or servitude and the circumstances are such that the person knows or ought to know that the other person is held in slavery or servitude, or

b) the person requires another person to perform forced or compulsory labour and the circumstances are such that the person knows, or ought to know that the other person is being required to perform forced or compulsory labour.

 

Due to latter section 54 of the Modern Slavery Act, all commercial organizations carrying out business (even if only in parts) inside the UK with a turnover of GBP35 million, are required to prepare a slavery and human trafficking statement for each financial year, including its supply-chain.

 

Even if Artificial Intelligence is not new, it is in fashion, especially if it implies Machine Learning. AI became a marketing term and companies try to convince potential clients with the promise to solve defined tasks based on intelligent algorithms. With this we return to William Gibson, because there are two problems:

 

1) Algorithms cannot deliver the promised results. For example, photo and video-recognition still does not work flawlessly.

2) Based on economic principles, tasks get automated if the AI is cheaper and / or more efficient than the human employee.

 

To overcome these problems, companies still hire human employees to team up with the algorithms or even work instead of the promised AI. A high number of these jobs include basic tasks like reviewing of images, videos and comments, or filling out surveys. The crowd-workers can even attend clients’ requests camouflaged as chat-bots. Doing so, companies hide their human employees before the customer’s eyes, requiring them to mimic a bot.

 

 

As a high number of these jobs only require lower levels of education, they can easily get outsourced to low income countries. Due to the described lack of transparency, consumers or even corporate clients cannot easily estimate if providers are outsourcing such services to countries, where crowd-workers find similar working conditions as in the infamous “sweatshops” known from the textile-industry.

 

Even if an organization dose not need to comply with the UK New Slavery Act, potential problems from the supply chain would damage the company’s reputation. To avoid such pitfalls, it is required for the procurement department to keep curious and questioning of the AI provider. This is to gain a basic understanding of how the promised services gets provisioned. Besides, providers must learn about the company’s clear position on modern slavery, defined in the code of conduct for suppliers. If the enterprise risk assessment identifies a higher risk for modern slavery inside the supply chain, adequate due diligence is mandatory. Furthermore, audit rights not only have to be included into the contracts, but audits must be conducted on a regular base.

 

Procurement is a classic target group for Compliance. Even if the described scenario still sounds like pure science fiction, in a globalized world it can become soon a reality. Companies should be prepared and can now include a case discussion in their regular tailor-made Compliance dialogues.

 

1 Orwell, George (1949): “1984”

2 Gibson, William (1984) “Neuromancer”

3 Henz, Patrick (2018) “Tomorrow’s Business Ethics: Dick vs. Deming”

4 The Global Slavery Index (2018)

 

Links:

The Global Slavery Index (2018): https://www.globalslaveryindex.org/

UK Modern Slavery Act 2015: http://www.legislation.gov.uk/ukpga/2015/30/section/1/enacted

 

Governance&Compliance, Futurist, Author.

 

Patrick Henz started his career in Corporate Information and Compliance at the end of 2007, when he was responsible for the implementation of an Anti-Corruption system in Mexico and several Central American and Caribbean countries. Together with these tasks, he gained valuable insights into Global Compliance programs, with focus on Latin America. Author of “Business Philosophy according to Enzo Ferrari” and “Tomorrow’s Business Ethics: Dick vs. Deming”.