2020 Information and Communications Technology Sector Benchmark
KnowTheChain released its third benchmark on the Information and Communications Technology (ICT) sector, assessing the efforts of the 49 largest global companies to address forced labor risks in their supply chains. With an average score of 30/100, and more than three-quarters of companies scoring less…
June 8, 2020
KnowTheChain released its third benchmark on the Information and Communications Technology (ICT) sector, assessing the efforts of the 49 largest global companies to address forced labor risks in their supply chains. With an average score of 30/100, and more than three-quarters of companies scoring less than 50/100, the sector is ill-prepared for the rising risks caused by the COVID-19 pandemic.
Forced labor is pervasive across the sector, with an investigation revealing ICT workers in Malaysia trapped in debt bondage, and a recent study finding ICT companies sourcing from Chinese factories using forced labour. The COVID-19 pandemic is exacerbating these conditions, with factories shutting down production, cramped accommodation increasing risk of infection, and migrant workers not being covered by government protections.
Hewlett Packard Enterprise ranked first in the benchmark with a score of 70/100, closely followed by HP (69), Samsung (69), Intel (68), and Apple (68). These five companies all disclose repayment of fees to workers in their supply chains as well as steps to better understand–and thus ultimately prevent–fees from being charged to workers. That said, the highest score achieved in the benchmark is 70/100, showing that even the stronger-performing companies in the sector can do much more—especially in closing the gap between policy and practice.
Companies scoring 10/100 or lower include the US semiconductor company Broadcom (10/100), the German semiconductor manufacturer Infineon (9), and the Swedish electronics equipment company Hexagon (8). The three lowest-scoring companies include the world’s largest surveillance equipment manufacturer, Hikvision, and Largan Precision, which manufactures lenses for electronic devices and is a supplier to Amazon and Apple. Xiaomi, the world’s fourth-largest smartphone manufacturer, is the only company to score zero in the benchmark
No one should have to pay for a job. Yet this is the reality faced by low-income workers in electronics supply chains, who may have to pay recruitment fees amounting to several times their monthly wages, forcing them to work to pay off the debt. Thirty-six of the 49 companies (73%) have a policy prohibiting worker-paid recruitment fees in their supply chains. But company disclosure reveals a disparity between policy and practice—only 13 companies disclose evidence that fees have been repaid to workers, and no company sets out a comprehensive process to prevent workers being charged such fees in the first place. Further, every company scored zero on its efforts to ensure supply chain workers are free to organize and collectively bargain for better working conditions – which is key to eliminating forced labor.
“This research shows that the majority of these high-profit companies are still not doing enough to eliminate the appalling abuse of workers who make the computers and smartphones we use every day,” Felicitas Weber, KnowTheChain Project Director at Business & Human Rights Resource Centre said. She added: “Despite the sector’s poor average performance, there are companies that prove tackling forced labour and a healthy return on investment is achievable. Yet even stronger-performing companies must make significant improvements to fill the gap between policy and practice.”
This benchmark analyzes the disclosure and performance of 49 companies against seven benchmark themes, and it provides good practice examples and recommendations for companies as well as recommendations for investor action. It also highlights the nature of forced labor risks in the ICT sector and explores the role of industry associations. An investor briefing explains why investors should be concerned about forced labor risks in the ICT sector and proposes actionable steps and tools for investors.
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