PALERMO 20TH ANNIVERSARY SPECIAL
Are we better off on the inside?
Maria Grazia Giammarinaro
International Committee on the Rights of Sex Workers in Europe
Kathryn Babineau & Jennifer Bair
Supply chains have been heavily criticised since the onset of COVID-19, as shortages of PPE and other medical equipment have laid bare the vulnerabilities they create for consumers. But labour and human rights activists were raising the alarm over the dark side of supply chain capitalism well before the current crisis. In many industries, the global brands that sit atop these chains directly employ only a relatively small number of workers. They depend on armies of contractors and subcontractors to actually produce the goods they sell or market. Typically smaller and less profitable than their clients, these suppliers compete for orders from lead firms and frequently, to win them, they must find ways to cut costs. Labour-related costs are almost always their first port of call. This, in a nutshell, is how supply chain capitalism exerts downward pressure on wages and working conditions worldwide.
Recently, legal efforts to address this problem have focused on trying to influence lead firm behaviour. Both ‘hard law’ like the UK Modern Slavery Act and ‘soft law’ projects like the United Nations Guiding Principles on Business and Human Rights rely on lead firm transparency and due diligence requirements to rein in the excesses of supply chain capitalism. Critics of this model frequently note that, beyond reporting, it imposes no substantive obligations on buyer firms. They are not required to improve conditions for suppliers or the workers their suppliers employ. As such, transparency legislation is highly compatible with conventional corporate social responsibility (CSR) schemes, which rest on two core principles: voluntarism and unilateralism. Lead firms (or closely aligned third parties such as commercial auditors) decide what standards will be acceptable in their supply chains, when they are being met, and what happens if they are not. Often there are no consequences for suppliers that fail to comply with standards.
The Fair Food Program (FFP), created by the Coalition of Immokalee Workers (CIW), represents a radically different approach to supply chain regulation. In our contribution to this series, we examine why the FFP works and how it differs from conventional CSR approaches. We also emphasise the conditions that have enabled the FFP not just to succeed, but to expand when so many other labour organisations remain on the defensive. We begin by explaining how the FFP grew out of anti-trafficking work in Florida’s tomato industry, and the realisation that a criminal justice approach to labour trafficking was never going to sufficiently address the root causes of the problem in agricultural supply chains.
Towards a root cause analysis
Until recently, Florida’s fresh tomato industry was a hotspot for labour trafficking. The civil rights division of the United States Department of Justice described the fields in central and southern Florida in the late 1990s as “ground zero for modern-day slavery.” This is where, in 1993, the group that would become the CIW began to organise farmworkers. In addition to low (and declining) wages, health and safety hazards, and verbal and physical abuse, the CIW shone a spotlight on forced labour in the fields. They also pushed for the passage of the Trafficking Victims Protection Act (TVPA) in 2000. Once the TVPA was enacted, CIW cooperated in a series of successful forced labour cases, providing critical assistance to government investigators.
While these victories were widely celebrated at the time, they also pointed to a deeper challenge: the fact that serial prosecutions were necessary suggested that the TVPA was not deterring would-be traffickers. Preventing crimes from taking place is always preferable to intervening once injustice has already occurred, and it requires a focus on root causes – in this case, the structural conditions that enable forced labour in the fields.
“If [growers] see awful things, they can say that they aren’t responsible.”
Prominent among these is the pervasive use of farm labour contracting (FLC). Under the FLC system, contractors, known in the industry as crewleaders, provide labour for growers by recruiting and managing crews of workers. This creates fertile conditions for crewleaders to exploit the workers they recruit, with abuses ranging from wage theft to, in extreme cases, forced labour. These problems persist because other actors in the supply chain tend to assign sole responsibility for them to the contractor. Both farmers and consumers can claim that they have no way of knowing if workers are being trafficked or otherwise abused by the crewleaders contracted to harvest crops.
As we learned from our research on agricultural supply chains, outsourcing via the FLC system has long been central to the labour process in commercial farming, and the problems associated with it are widely known. One US official whom we interviewed emphasised that the FLC system “allows [growers] to close their eyes and not really see what is going on with those workers; they feel shielded from the problems of wage theft, substandard housing, and other responsibilities. And if they see awful things, they can say that they aren’t responsible.” The question for CIW was how to eliminate the plausible deniability of actors higher up the chain; in other words, they needed to create a way to close the accountability loophole in the supply chain.
Leveraging supply chain dynamics to empower workers
In order to achieve meaningful change for farmworkers, CIW decided to leverage the dynamics of the supply chain. Instead of targeting individual farms that grow tomatoes, CIW decided to focus on the small and highly concentrated set of powerful buyers that purchase the bulk of fresh tomatoes from Florida suppliers: retailers, food service companies, and restaurant chains. As large, visible corporations with names well known to consumers, the companies purchasing tomatoes made better targets for consumer-driven activism, like boycotts and student-led campaigns, than the farms themselves.
Building a broad alliance of workers, student and faith groups, and other allies, the CIW successfully orchestrated boycotts of fast food companies and grocery chains in order to pressure buyers to sit down and negotiate with CIW. Four years after the launch of the Fair Food Campaign, this strategy finally bore fruit: Taco Bell’s parent company, Yum Foods, signed the first enforceable agreement with CIW, committing it to buy Florida-grown tomatoes only from farms that comply with the Fair Food Code of Conduct, a rigorous set of labour standards designed by the CIW with extensive worker input.
With the first buyer agreement executed, the CIW’s Fair Food Campaign continued to pressure others to join suit and one by one they did. The Fair Food Program (FFP) went into full effect in Florida’s tomato fields in 2011, after reaching a critical mass of signatory buyers and growers. Under the programme, farms that do not comply with the Fair Food Code of Conduct face an escalating series of sanctions, including a suspension of all tomato purchases from participating buyers. There are a few ‘zero tolerance’ provisions in the code that merit automatic suspension, one of which is forced labour.
The code also requires all growers participating in the FFP to hire and pay farmworkers directly. Crewleaders continue to operate on farms as supervisors, but they are no longer the employers of those they supervise as is the case under the FLC system. Instead, workers are employed by the grower, who issues each worker a pay cheque in their name – a practice that dramatically reduces the scope for trafficking in the tomato supply chain and ensures that growers are held accountable for any abusive practices that occur.
Compliance with the direct hire requirement, like the other elements of the code, is overseen and enforced by the Fair Food Standards Council (FFSC), the Fair Food Program’s monitoring arm. In addition to conducting yearly audits, which include extensive worker interviews on all participating farms, FFSC staff also run a 24-hour helpline that workers can use to report suspected code violations. FFSC reports indicate that, to date, auditors have conducted more than 26,000 worker interviews over the course of 264 audits; drafted and supervised the implementation of 189 corrective action plans for participating growers; and fielded over 1,800 complaints from workers via the helpline. The CIW, meanwhile, conducts education sessions on all participating farms so that workers know about their rights and responsibilities under the Fair Food Program.
The expansion of the FFP rests on the willingness of consumers to put pressure on lead firms and on the susceptibility of corporate targets to this kind of mobilisation.
While tomatoes continue to be the programme’s core crop, the FFP has expanded to include both new crops (primarily bell peppers and strawberries) and new buyers, including Walmart, which joined in 2014. It now includes participating growers in eight states stretching from Florida to New Jersey. Taken together, these efforts constitute one of the most rigorous labour rights monitoring and enforcement efforts in the history of American agriculture.
Learning from successful supply chain regulation
The FFP model works largely because it differs from conventional CSR in two ways. First, the FFP is not a unilateral, business-led initiative designed and overseen by industry actors. Farmworkers, as represented by CIW, are parties to the Fair Food Agreements. The Fair Food Code of Conduct reflects their experiences, and they play an active and ongoing role in enforcing the code through their participation in audits and their use of the helpline. Second, the FFP departs from the voluntarism of the traditional CSR model. When buyers sign Fair Food Agreements they make binding commitments that are enforceable, when necessary, by arbitration. Similarly, the FFP uses market consequences to enforce the obligations of growers; in other words, buyers are prohibited from purchasing from non-compliant suppliers.
Can this model be replicated? The worker-driven social responsibility model created by FFP has been replicated successfully both in the United States, in the dairy sector, and abroad, including a new agreement to address gender-based harassment and violence in Lesotho. Other campaigns are ongoing in a variety of sectors around the world, including the US construction industry. So, the real question is, what are the conditions under which this model can be replicated?
To answer this query, we need to identify the model’s elements. The Fair Food Program grew out of organising efforts that, over time, gave CIW intimate knowledge of supply chain dynamics and an understanding of the issues confronting the migrant worker community. Beyond its roots in the CIW’s work, the creation and expansion of the FFP rests, ultimately, on the willingness of consumers to put pressure on lead firms and on the susceptibility of corporate targets to this kind of mobilisation. In addition to consumer-facing brands, unequal bargaining power is another critical element of this supply chain model. CIW recognised that lead firms can use their weight to require suppliers to meet labour standards, just as they require them to meet quality standards or price specifications. Lead firms are also the supply chain actors best positioned to absorb the higher costs associated with better standards; in the case of the FFP, this includes a “penny per pound” premium that signatory buyers pay to augment workers’ wages. More symmetrical supply chains may offer fewer opportunities to leverage lead firm power into improvements for workers. Finally, the FFP is supported by a legal system that includes both state and federal labour regulations (even if poorly enforced) and a functioning judicial regime capable of upholding the Fair Food Agreements in the event of a dispute. Sustaining supply chain labour agreements where these elements are absent will be more challenging, as developments regarding the Bangladesh Accord on Fire and Building Safety suggest.
While these caveats make clear that there are limits to this model’s replicability, worker-centred supply chain regulation may be possible in contexts that share these conditions: the presence of an organisation with the knowledge and legitimacy to represent workers, and the existence of one or more lead firms with sufficient market power over suppliers and recognisable brands vulnerable to consumer pressure. Where these elements are present, supply chains might represent opportunity structures that can be mobilised to workers’ benefit.