While most companies disclose that they have a corrective action process in place for their suppliers, only three companies, Unilever, Kellogg, and Coca-Cola, achieve the full score for their corrective action disclosure by comprehensively outlining their corrective action process, including a means to verify the implementation of corrective actions, consequences for suppliers, and providing an example of their corrective action process in place.
Thirty out of 38 companies give some information on their corrective action process. However, only 18 out of 38 companies describe how they verify that corrective actions have been implemented by suppliers. For example, Kroger conducts follow-up audits within 60 days, and Lindt varies the number of visits to a farm that it conducts each year, depending on the corrective actions the farm is supposed to be implementing.
Twenty out of 38 companies describe the potential consequences for suppliers who fail to implement corrective actions. This mostly includes terminating the business relationship with the supplier. Tesco, however, provides more detail on these consequences and discloses that suppliers who fail to implement corrective actions are provided with a three-month notice period before ending the business relationship, with a view to ensuring that workers’ rights are not impacted by canceling orders on short notice.
Only four out of 38 companies provided a summary or example of their corrective action process in practice. After requiring a supplier to implement corrective actions, which included documentation of payment processes and worker signatures to ensure workers received their wages, Kellogg followed up and interviewed workers to make sure that they were aware of the new payment processes and their entitlements.
We identified 12 companies in the 2018 benchmark with one or more allegations of forced labor in their supply chains. A total of 41 allegations were identified, and 15 met KnowTheChain’s threshold. Seven allegations involved seafood supply chains, four involved palm oil, two involved lettuce, one involved beef, and one involved coffee.
Across the benchmark, 11 out of 38 companies gave some detail on their remedy process, including timelines for dealing with grievances, responsible parties, or engagement with affected stakeholders. PepsiCo discloses that it forms a working group to deal with grievances, including staff from procurement, human rights, public policy, and sustainable agriculture, who advise on the grievance and decide on steps to take with the supplier involved. Additionally, it reports that it has a Grievance Committee comprising senior management, which meets quarterly to review individual cases and the operation of its grievance mechanism. Archer Daniels Midland outlines its process in detail and discloses that, upon receiving reports of violations, it evaluates the issue and, within four weeks, assigns it to a regional team that engages with the stakeholders involved. The next four weeks are scheduled for investigation and development of an action plan, during which the team compiles a report and communicates the issue to the company’s public register. The company reserves the final phase for monitoring and reporting on the implementation of the action plan.
Of the companies for which no forced labor allegations were identified, only one company discloses outcomes for workers of its remedy process. Coca-Cola discloses that, upon discovering that migrant workers at a sugar supplier in Côte d’Ivoire were in situations of debt bondage, the mill returned documentation materials to the workers, and the supplier received training to ensure full compliance with labor laws and the company’s policy.
Of the companies for which KnowTheChain identified allegations of forced labor, ten out of 12 published a public response to the allegation. However, public responses generally fail to address the allegation comprehensively, omitting to describe the steps taken to address each aspect of the allegation. Only three out of 12 companies disclose the steps taken to address the allegation. Only one company, Wilmar, explains in detail how it addressed the allegation and discloses outcomes of the remedy process with respect to the allegation. Concrete remedy outcomes for workers included the establishment of a top-up system in order to achieve at least minimum wage earnings for workers otherwise not receiving this pay (within the established piece rate system), the conversion of all contracts to permanent employment contracts, and the immediate removal of a discriminatory leave policy. Tesco and Nestlé do not disclose outcomes for workers but go further than other companies by providing some information about how they addressed allegations. Tesco provided training to its Spanish suppliers on ethical standards, guidance on the monitoring of labor agencies, and effective grievance procedures. Nestlé responded by engaging expert organizations to undertake assessments of its seafood supply chains and committed to using the findings to develop and implement a time-bound action plan.
Notably, despite the severe nature of the allegations and although some companies disclose that their process includes engagement with affected stakeholders, no company discloses evidence that any remedies provided were satisfactory to the victims of the allegation, or the groups representing the victims.