We’ve asked, many responded: How engaged are technology, food, and apparel companies on forced labor?

To drive awareness and continued corporate action on the issue of forced labor in supply chains, this year KnowTheChain is benchmarking a total of 60 global companies from the information and communications technology (ICT), food & beverage, and apparel & footwear sectors on their efforts…

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August 29, 2016
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To drive awareness and continued corporate action on the issue of forced labor in supply chains, this year KnowTheChain is benchmarking a total of 60 global companies from the information and communications technology (ICT), food & beverage, and apparel & footwear sectors on their efforts to address forced labor in their supply chains.

Ahead of analyzing the companies’  disclosed policies and practices, we reached out to all 60 companies and invited them to update their websites, or to respond publicly to a set of engagement questions related to the benchmark indicators. (Company responses to these questions are published on www.business-humanrights.org).

KnowTheChain selected these sectors based on their high-risk of exposure to forced labor. Each of these sectors has been identified by the U.S. Department of Labor for sourcing goods using forced labor and Verité’s Forced Labor Commodity Atlas identified forced labor in commodities in the supply chains of all three sectors.

So, are companies in these three sectors aware of their exposure to this issue and are they actively addressing it?

The level of responsiveness gives a good indication of the extent to which the sectors are engaged on the issue and recognize the need for transparency.

LEVEL OF ENGAGEMENT* APPAREL & FOOTWEAR ICT FOOD & BEVERAGE
High engagement 80% 55% 45%
Low engagement 10% 10% 30%
Awareness 10% 5% 15%
No engagement 0% 30% 10%

 

*High engagement = company sent response to questions.  Low engagement = company sent link to disclosure.  Awareness = interaction between KnowTheChain and the company. No engagement = company did not acknowledge KnowTheChain’s outreach.

The apparel & footwear sector was the most responsive, followed by the ICT sector, with the food & beverage sector showing lower levels of engagement.

Most notably, because the Business & Human Rights Research Centre’s regional researchers were able to follow up with companies in their local language, we managed to have at least an email exchange or phone conversation with all 20 apparel and footwear companies – and 80% of those disclosed additional information through our engagement questions.  On the other hand, even though we managed to get in contact with most food & beverage companies, only 45% of them provided a response to our questions.

These results are not surprising. They are reflective of the level of media attention and civil society pressure companies in each of the sectors have received, as well as of the role and leadership – and lack thereof – we have seen from industry associations and individual companies over the past decades.

Revelations about sweatshop conditions and child labor have put the spotlight on labor issues in apparel supply chains since the 1990s, and pressure has continued with recent incidents such as the Rana Plaza factory collapse in Bangladesh. A number of organizations are since working with companies to address working conditions in their supply chains: From initiatives founded in the late 1990s following sweatshop scandals, such as the Ethical Trading Initiative and the Fair Labor Association, to more recent initiatives working exclusively with apparel companies, such as the ILO’s Better Work Programme and the Sustainable Apparel Coalition. While the garment industry is far along in terms of industry initiatives, this does not mean it is close to ensuring a forced labor-free supply chain: further work is needed for example at the level of spinning and weaving mills, and in purchasing practices by brands that can trigger “undeclared” subcontracting to factories where oversight is non-existent and forced labor risks are therefore much higher.

Attention to labor abuses in the ICT supply chain started much later. Most notably highlighted in the press were the suicides of Foxconn workers linked to working conditions in 2010. Following a more recent report from Verité into forced labor in the manufacturing of electronic goods in Malaysia, in 2015 the Electronic Citizenship Industry Coalition (EICC) updated the code of conduct for more than 100 member companies. The code now includes a ban of recruitment fees for workers, including supply chain workers, and a requirement to pay back any such fees.

The food and beverage industry, on the other hand, had traditionally not received as much pressure from civil society or the media on labor issues in its supply chain until Oxfam launched the “Behind the Brands” Campaign in 2013. This was followed soon after by media coverage of forced labor in the Thai fishing industry. Subsequently, in December 2015, Australian retailers signed a pledge to address forced labor in their supply chain, and in January 2016 the Consumer Goods Forum published a resolution to develop an action plan to eradicate forced labor through collaboration between retailers and manufacturers.

In June 2016, leading companies across several sectors came together to form the Leadership Group for Responsible Recruitment, with a committing to ensure that recruitment fees are paid by the employer, not the worker.  This initiative has representatives from both the ICT and the food sector – and while the apparel industry has done well in improving management of labor issues in the supply chain more broadly, including working on enabling factors such as living wages through collaborations with trade unions such as ACT (Action, Collaboration, Transformation), leadership to address forced labor specifically is somewhat absent.

Where does this leave us?

A look across three sectors with high-risk of forced labor shows that company action is too often a reaction to the media uncovering poor labor conditions, rather than a proactive analysis and mitigation of risks. Companies in all sectors need to be alert to risks and respond to them, particularly at the lowest levels of the supply chain in the production of commodities and extraction of raw materials where forced labor can be more widespread. That said, it is encouraging that all three sectors are moving in the right direction. The number of companies that did not engage with KnowTheChain was low across geographies, with North American companies being the most unresponsive companies (16%), followed by Asian companies (15%).

Benchmarks such as KnowTheChain’s can help accelerate this movement, by recognizing the leadership of companies pressing ahead, and identifying gaps and opportunities for improvement for those lagging behind. As such, benchmarks can be a tool for companies themselves, their industry associations and third party stakeholders such as investors and civil society to drive faster progress in eradicating forced labor from global supply chains.