Ten Actions Companies Can Take to Eradicate Forced Labor

This post is the second in a series by Amy D. Augustine, Director of Corporate Programs at Ceres, describing key findings on the human rights and supply chain performance of 613 of the largest U.S. companies evaluated in Gaining Ground, along with recommendations for corporate…

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May 21, 2014
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Gaining Ground Report CoverThis post is the second in a series by Amy D. Augustine, Director of Corporate Programs at Ceres, describing key findings on the human rights and supply chain performance of 613 of the largest U.S. companies evaluated in Gaining Ground, along with recommendations for corporate and investor action. Read part one here.

Think about the dozens of products you use every day – from your cell phone and computer to coffee, cosmetics, and clothing. It might surprise you, but many of these items in your home may be connected to child labor and forced labor. In fact, forced labor and human trafficking affect an estimated 21 to 27 million people worldwide.  According to the U.S. Department of Labor’s list of goods produced with high concentrations of child and/or forced labor, over 130 products are affected in industries as varied as agriculture, electronics, and apparel.

In the recently released Gaining Ground report, Ceres and Sustainalytics analyzed the sustainability practices of 613 of the largest U.S. companies, establishing a baseline of corporate performance on human rights and forced labor and identifying opportunities for action.

With complex, multi-tier supply chains stretching down to the farm and factory level, ensuring safe and equitable working conditions is both critical and challenging. While robust human rights policies and supply chain codes of conduct are not enough to protect workers, they are an essential place to start.

Layout 1Yet our analysis revealed only 31 percent of companies have formal policies and statements protecting the human rights of their direct employees; and a mere 13 percent explicitly prohibit both forced and child labor. Equally disturbing is that 42 percent of companies are still not demonstrating any evidence of supplier codes of conduct, and 60 percent do not explicitly prohibit forced and child labor.

These findings point to a significant deficit in effective human rights policies and supply chain engagement, particularly in areas such as forced labor.  Closing this gap is possible, however, if companies recognize the critical role they play.

Here are 10 steps companies can take to address child labor and forced labor:

1. Assess key risks and impacts for direct and indirect operations. From basic education to conducting robust human rights risk assessments, and from mapping supply chains to tracing materials used in products, it is critical to gain a sound understanding of key risks and impacts.

2. These results can then be used to establish effective policies aligned with internationally recognized standards. These policies should be applicable to both direct employees and suppliers, and made accessible in relevant languages.

3. To ensure policies drive change, develop implementation programs and time-bound measurable goals. Leverage workers voices in the creation of programs, where possible, to ensure they are addressing key needs and impacts. Set goals and targets to drive performance.

4. Then, communicate expectations both internally and to suppliers. Clear policies, programs, and performance goals can be used to communicate commitment and accountability from the top.

5. It is also important to align internal processes, including procurement practices and strategic business decisions. These processes should reinforce, not diminish, fair and equitable working conditions.

6. To support achievement of stated goals, invest in training and capacity building. Ensure company employees, management, and suppliers have the training—and incentives—needed to effectively manage and meet expectations. Ensure training and capacity building are cascaded throughout the supply chain.

7. To do so, engage suppliers as partners and innovators. Demonstrate the business value. Support their efforts. Empower them to create solutions.

8. Then, measure performance. Understand that audits, while important, do not provide a full picture of working conditions. Find ways to engage workers; provide robust grievance mechanisms; measure outcomes, not just process.

9. Use those findings to disclose results. Regularly report performance, both quantitatively and qualitatively. Candidly discuss challenges, including actions taken to address and prevent recurrence. Encourage suppliers to report their performance.

10. Use those results to engage stakeholders, companies (both inside and outside of sector), government, and other key partners. No one company, industry, or NGO can solve this issue alone. Collaboration with peers, labor and human rights organizations, investors, government, and others is more effective than going it alone.

To affect meaningful, widespread, and long-lasting changes in all workplaces, from corporate offices to factories and fields, companies must act—and act now.

For additional report findings, including sector analysis, recommendations for investor action, and key resources, please see Hidden in Plain Sight, an in-depth case study focused on the human rights and supply chain performance of 613 of the largest U.S. companies assessed in Gaining Ground. 

Amy D. Augustine is a Director in the Corporate Program at Ceres, advising member companies on sustainability strategy, reporting, and stakeholder engagement. Amy also leads specific initiatives related to The 21st Century Corporation: The Ceres Roadmap for Sustainability, including Ceres’ supply chain work, and recently co-developed the Supplier Self-Assessment Questionnaire (SAQ): Building the Foundation for Sustainable Supply Chains.