Collaboration is key to achieving change, in particular on systemic issues such as forced labor. While remaining cognizant of the limitations of the role that industry- and multi-stakeholder initiatives have played to date in ensuring respect for human rights, KnowTheChain believes that such initiatives can play an important role in changing the conditions under which people work in their global supply chains when working jointly to increase leverage. We therefore believe that it is important to recognize and reward initiatives which show strong efforts to address forced labor (1) and equally hold initiatives accountable where their efforts fall short.
As such, in addition to ranking companies, KnowTheChain also focuses its analysis on industry- and multi-stakeholder initiatives themselves. Such analysis started in 2017 with a focus on the sugar and leather industries, and since 2020 has been built more systematically into sectoral benchmark reports. The 2020 ICT sector benchmark assessed the efforts of the Responsible Business Alliance, and the 2020 food & beverage sector report assessed AIM-Progress, the Leadership Group for Responsible Recruitment, The Consumer Goods Forum, and the UN Global Compact, as all four initiatives have some focus on addressing forced labor in the food and beverage sector, yet are “commodity agnostic.”
Looking at the average score of companies participating in industry- or multi-stakeholder initiatives addressing forced labor, KnowTheChain found that these companies on average scored higher than companies which are not part of such initiatives, demonstrating a strong correlation between membership in initiatives and stronger efforts taken to address forced labor risks. On the other hands, with average scores ranging between 39/100 to 54/100, companies that are part of such initiatives still have a long way to go.
KnowTheChain also assessed the initiatives to understand to what extent the initiatives themselves have strong standards and governance structures in place, enable learning and engagement among members, but also make sure that member companies ensure workers’ rights are respected (2). KnowTheChain shared its assessment with each of the initiatives ahead of publication for additional input and appreciated the feedback provided by the Responsible Business Alliance and The Consumer Goods Forum.
KnowTheChain also welcomes the follow up engagement with several initiatives including a formal response from the The Consumer Goods Forum “Human Rights Coalition – Working to End Forced Labour (which had not been fully assessed in KnowTheChain’s report as it was in the process of formation at the time of report writing). The coalition’s response reads:
“We believe our role and responsibility as an industry organisation has been misrepresented and today wish to correct the perceptions which have been presented in this report. … Below we set out our primary concerns…
Governance and Stakeholder Representation: … this is not something the CGF and the HRC are designed for …
Standards: … Whilst we do not have an explicit reference to the ILO core labour standards, this does not preclude our member companies from supporting and integrating them into their approaches….
Grievance Mechanisms: This … points to a misunderstanding of what the CGF and the HRC are designed to do: primarily drive engagement, understanding, exchange, advocacy and collective action …
Comparing Pears and Apples: This brings us onto our final point: we are not sure to which extent it is helpful to compare our respective initiatives when each offers varying value propositions and activities which cannot be easily quantified to provide objective comparisons ….
Nonetheless, there are several key takeaways for us to reflect upon, notably around accountability mechanisms and transparency … with the upcoming official launch of the HRC on the 10th December, and finalisation of our strategy and key frameworks, we will endeavour to integrate the recommendations from KnowTheChain, notably to regularly report on member performance and the impact and positive outcomes for workers.”
KnowTheChain welcomes the constructive engagement with The Consumer Goods Forum since 2016 and is looking forward to engaging with the newly formed “Human Rights Coalition – Working to End Forced Labour,” including on the recommendation on transparency on member performance and outcomes for workers and on KnowTheChain’s assessment criteria ahead of the next benchmark publication.
(1) KnowTheChain aims to highlight good practices and gaps on initiatives in its benchmark reports. In addition, since 2018, where companies disclose membership in initiatives that a) address forced labor, and b) disclose relevant membership requirements, to reduce reporting burden, companies may be given default credit for certain elements. Details have been shared with all benchmarked companies.
(2) KnowTheChain assessed initiatives against five criteria:
- Governance: Workers in global supply chains are the ones on the ground who have the strongest understanding of issues as well as what solutions are needed. Any initiative that puts addressing labor rights issues at their core, should ensure that that rightsholders participate in the design, implementation, and monitoring of any solution which can help ensure immediate feedback and effective solutions that work for rightsholders.
- Standards: The UN Guiding Principles on Business and Human Rights clearly defines companies’ responsibilities to respect human rights, both in their supply chains and through the ILO core labor standards. Initiatives should support these standards, rather than choose weaker and/or vaguer standards, something that KnowTheChain has observed in the supplier codes of a number of the largest global companies.
- Accountability Mechanisms: Initiatives that set out to address forced labor should hold themselves and their members accountable. This should include public reporting on progress and clear consequences for non-adherence to standards to ensure credibility. As an example, the Fair Wear Foundation publishes the results of its annual “performance checks” for its of its members.
- Grievance Mechanisms: The UN Guiding Principles on Business & Human Rights note that “industry, multi-stakeholder and other collaborative initiatives that are based on respect for human rights-related standards should ensure that effective grievance mechanisms are available.” The Fair Labor Association is an example of an MSI which requires members in certain membership levels ensure that mechanisms are in place at suppliers, and also provides a mechanism where third parties can raise grievances related to rights violations in members supply chains.
- Learning and Engagement: MSI Integrity notes that a key role MSIs can play is “building trust and relationships, experimentation, learning and knowledge exchange, engaging corporations.”