Tackling Slavery in Supply Chains – What Can We Do?

By Kate Larsen, Director, Business for the Unseen

Tackling Slavery in Supply Chains – What Can We Do?

The ILO estimates that there are approximately 21 million people enslaved around the world at present – these will include many people who are in bonded labour, those trafficked and kept against their will in enslaved situations – but slavery also exists in global supply chains. Modern Slavery can also take the form of exploitation of labour even when workers are paid: either vastly underpaid at levels below a living wage or national poverty line, or subject to treatment violating labour laws.

To understand the challenges further and what consumers, investors and companies can do to address slavery and labour exploitation in supply chains, Women Advancing Microfinance UK is hosting a panel event, sponsored by the Trust Woman conference on 6th July with leading NGOs, investors and sustainability consultants at the Thomson Reuter’s offices. There are limited tickets available so please book one here if you’re interested in joining. In advance of the event we asked one of our panel speakers, Kate Larsen, Director, Business for the Unseen, an experienced supply chain corporate responsibility, worker rights and sustainability professional with over 10 years living and working in Asia some questions on the topic.

How would you characterize the problem of exploitation in supply chains, which often are located in developing countries?

Even many companies who are responsible enough to look at workers’ conditions in their supply chains publicly admit in Corporate Social Responsibility and other reports that a percentage of workers are still exploited. In the UK, whilst the government promotes a “living wage”, most worker trade unions, NGOs, academics, and many in businesses agree that that is not a living wage, but in fact a poverty wage as the actual levels are not sufficient for sustainable decent family life. A concern that has led to recent shareholder resolutions on the issues, for example at B&Q amongst many more.

As for international supply chains, there are very few countries where the legal minimum wage rate meets what NGOs, academics, and even many in government, would agree is a living wage rate. Yet most factories pay only the minimum wage rate to new and most workers, if that. Many employers also do not pay overtime rates despite demanding long hours, not are they paying all workers the basic legal benefits they are due. For example, in Cambodia, many garment factories breach the law by keeping workers on rolling one or three month contracts avoiding the need to pay maternity or pension support, etc. Approximately, 80% of these workers are women, and their efforts to argue for better deals are often met with violent oppression.

Too often women and men work 50-90 hour weeks and still do not earn enough for decent housing and access to basic services, such as education and health, for their families. On the other hand, many of the companies that employ them are making some of the greatest profits ever seen, and their executives receive some of the highest salary packages ever seen. This is a problem of human rights, and of income inequality. An increasingly prominent issues amongst consumers and investors.

It is June 2016 as I write this and the UK just voted narrowly to leave the European Union through a referendum. If this happens, we risk even more modern slavery and worker exploitation in UK supply chains. Currently, if an European worker comes to the UK, they are legally allowed to leave an employer treating them poorly or report it to the police, and do not risk being sent home.

In a few years, perhaps some seasonal workers may be brought over on temporary visas and tied to one employer, such is the case for domestic workers visiting the UK with Middle Eastern or other employers. If exploited, and wishing to depart an employer treating them poorly, even to the point of slavery, the worker cannot change employer without risk of being sent home. This allows exploitative employers impunity to carry on maltreating vulnerable workers, and further reduces the risk of their hiring a British worker who might know and could enforce their rights.

In 2014 Human Rights Watch documented migrant domestic workers accompanying their employers to the UK were subjected to serious abuses including forced labour, confiscation of passports, confinement to the home, physical and psychological abuse, extremely long working hours with no days, and very low wages or non-payment of wages. The report showed the UK government failed to live up to its obligations under international law to protect migrant domestic workers and enable them to access justice if they are mistreated. Instead of protecting the workers, the legal system can make it harder for them escape.

Many of us remember headlines from the 1990s of the sweatshops that Nike relied on to manufacture their goods – but more recently in 2013 we had the Rana Plaza building collapse and we know exploitation continues. Where does the problem lie – is it with governments, corporates or consumers?

The problem lies with all of us. The Bangladesh garment factories building Rana Plaza collapse in April 2013 killed over 1100 people and causing suffering for thousands more. The catastrophe exposed many issues. Consumers, media and NGOs did and need to continue to call, email and engage on social media with companies demanding better investigation into supply chains, to find and fix poor labour standards. We should also call for businesses to factor into executive compensation packages, incentives to buy from verified factories paying workers ALL legal benefits and treating them decently, whilst obeying environmental laws.

Companies still mainly choose the “cheapest” supplier, instead of selecting factories based on robust investigative worker conditions data. The supplier with the cheapest price right now, often ends up being the more expensive supplier later when issues such as product defects, worker strikes, and poor shipping timing. Or worse, they can lead to major catastrophes, such as Rana Plaza, Tazreen, Ali Enterprises, and many others – which have led to brands paying significant compensation for deaths of workers.

To help address the problem, consumers could ask governments to pass regulations to require companies to transparently publish regularly the names of all factories they buy from – as Levis, H&M, Nike, Adidas, Puma, Patagonia, and now M&S do in response to consumer and investor pressure. Both the new UK Modern Slavery Act, and the California Transparency in Supply Chains Act requires large retailers to report transparently on their efforts to prevent or remediate slavery in their global supply chain.

With increased transparency, worker representative organisations are better able to report violations to brands for faster intervention. Investors voices helped the UK Modern Slavery and California Transparency Acts come into effect, and investors can play a critical role in demanding greater disclosure and improved labour conditions.

With the political instability across large parts of the world in recent years giving rise to a growing migration phenomenon – would you say that the risk of forced or exploited labour in supply chains is higher than ever?

Migration in desperate need of work certainly leaves people at risk of exploitation, and we have more refugees in the world now than ever before, a vulnerable situation to be in if it were us. Reports on exploitation of Syrians, including children, have emerged, such as needing to take work illegally in Turkey for survival making clothes and shoes.

When people are working illegally they can’t report abuse to the authorities, and unscrupulous employers can get away with abuse. Many workers migrating into vulnerable circumstances, such as some Africans and Chinese to Italy, Spain, and the UK, Syrians to Turkey, and even Bangladeshis in the “boat people” from Turkey to Greece are escaping countries with less functioning democracy and/or where governments are often violently repressing voices of dissent.

There is argument that in not supporting a well functioning refugee asylum system in our countries, which to their credit, Canada are now doing, and not strengthening labour standards in trade laws, we indirectly influence the risk of far greater exploitation in supply chains making our clothes, shoes, food, and more – becoming complicit in abuse.

In 2015, some Turkish companies and international brands called for temporary work visas for Syrians in Turkey as they saw that they needed employment, and argued that the legal system may as well reflect the reality of Syrians working. Countries such as Italy currently accept large illegal worker populations from north Africa and China to pick tomatoes, oranges, or sew bags and clothes. The rights of these workers would be better protected if they are given temporary work visas (as they sometimes are), and this would also mean local Italian and European workers rights can’t be undercut. Eritreans often work illegally in Italy as in Eritrea almost all young men are conscripted into the army, and many are then held in forced labour slavery conditions for many years.

In my opinion, the risk of forced and exploited labour in supply chains has been increasing with the growing migration phenomenon and growing trade without influencing enough labour and other democratic law enforcement in countries such as Bangladesh, Cambodia and China.

What more can ordinary people do in their everyday lives if they want to help address this issue?

The ordinary consumer, share or pension holder can ask, by email, tweet, petition or otherwise, that companies we buy from or are invested in increase their efforts, and transparency about labour rights, to ensure decent conditions for workers in their supply chains.

Specifically, a good step right now would be to ask companies and pension funds to support transparency, and the proposed new ILO convention for an international level playing field for worker rights in supply chains. When companies can take less steps in some countries than others, it makes it harder for us to hold them to account, and for the companies taking responsibility to make an effort to compete fairly. Organisations like ShareAction help people ask Pension funds to engage.

Consumers can also join, as a paying member, or on social media, one of the worker rights advocacy organisations such as CleanClothesCampaign and LabourBehindTheLabel, Oxfam, Human Rights Watch, AntiSlavery Intl or Fashion Revolution.

Efforts of some of these and other organisations after the Bangladesh Rana Plaza, led to millions of supporters sending one powerful aligned message in thousands of emails asking brand after brand buying clothes from Bangladesh to join the Bangladesh Accord for worker safety. As a result, over 200 companies agreed to invest millions in a five year partnership

with worker unions to meaningfully improve garment factory structural building safety, and improve rights, and hence conditions, for the people and women who make our clothes.

These charities and NGOs proved they can make a difference with consumer and investor, be it funding, or merely signing their petitions, but far more is still needed. Investors and consumers can used their voice on shareholder engagement, email or twitter to influence companies to investigate deeper, report more transparently, incentivize their leadership teams to factor in worker welfare, and be a part of initiatives like the Accord (such as ILO Better Work, ACT, and others), which are influencing real change for workers, country by country.

It is largely only because of voices like yours that any progress has occurred at all, and that corporate responsibility/worker rights professionals like me have been appointed to work with hundreds of factories assessing how they treat workers. I urge you to not be the reason some brands or investors still stand up and say “but the customer doesn’t care”. If you do care, then make sure your voice is heard.

Kate Larsen, Director, Business for the Unseen, is an experienced supply chain corporate responsibility, worker rights and sustainability professional with over 10 years living and working in Asia. Kate spent six years as Burberry Corporate Responsibility Senior Manager Asia building the Asia team and co-building the global ethical trade and sustainability policies and programme, including co-writing the response to the California Transparency in Supply Chains Act statement on modern slavery. She has also advised firms such as Kering Group, NEXT Plc, and a leading Scandinavian retailer on their ethical trade programmes across Asia. In 2013, following the Bangladesh Rana Plaza factory collapse Kate was hired as Director Social Responsibility Innovation and Engagement for a leading US clothing retailer to work on their Bangladesh, Cambodia, China and global programme, collaborating with GAP, Target, ILO Better Work, etc. In 2015 Kate advised the World Bank on women’s empowerment programmes within the garment sectors in Bangladesh and India, engaging and running workshops with NGOs, government, and brands such as M&S.

Business for the Unseen is a social enterprise partnership with the UK anti-slavery charity Unseen to support remediation of the type of supply chain modern slavery bonded labour cases Kate has worked on remediating in past roles. Business for the Unseen facilitates greater collaboration of business, and with more NGO partners to allow more robust, deeper investigation and engagement to cause change, and for application of worker helplines and modern technology to support worker knowledge and rights, etc.

Share this story