Rice farmers working in the field in Kandal province. ILO/ Khem Sovannara/Flickr. (CC BY-NC-ND 2.0)
The world’s high level of interest in modern slavery and trafficking exists in part because many leading brand companies have been shown to profit from the use of exploitative labour practices in their supply chains. The campaigns and exposés demonstrating these links have pressured big firms into accepting more responsibility for the workers producing their products. And, over the past few years, we’ve seen an increasing number of corporate and governmental initiatives aimed at improving the labour standards of the world’s workplaces. These initiatives have generally taken increased supply chain transparency as their primary mechanism for improvement, rather than punitive regulation or sanction, on the theory that ‘good’ companies will discover and address hidden exploitation, while ‘bad’ companies will be exposed for what they are, and will be punished for it by consumers and the market.
The drive toward ‘decent work for all’ received a boost in 2015 when the United Nations recognised it as one of 17 sustainable development goals to be accomplished by 2030. Since then a large network of institutional actors known as Alliance 8.7 – it takes its name from the part of SDG 8 specifically dealing with forced labour – has formed to spearhead the global effort around this SDG. There is, perhaps unsurprisingly given its composition, a lot of enthusiasm within Alliance 8.7 for voluntary, private sector-led governance approaches to eradicating forced labour in supply chains, including those that seek to increase supply chain transparency. There is only one catch: there is very little evidence to support their enthusiasm.
Severe labour exploitation remains endemic across many sectors and regions of the world. As a large body of academic research, investigative journalism, and worker campaigns has by this point made clear, forced overtime, wage theft, the manipulation of debt and credit relations, sexual harassment and violence, and various other forms of coercion and exploitation are thriving in the global economy. If Alliance 8.7 is to realise its goal of eradicating forced labour, human trafficking, modern slavery, and the worst forms of child labour within the next thirteen years, or even make demonstrable progress toward it, dramatic action needs to be taken to address the root causes of these problems within global supply chains.
The limits of transparency
The initiatives and strategies currently on the table generally involve an expansion of existing social auditing, ethical certification, and awareness raising programmes. As continuations of the status quo, they disregard the growing body of empirical research questioning the effectiveness of these types of programmes, and demonstrate little awareness that a serious change of approach is needed in order to rise to this challenge. Why?
There are serious questions about the integrity of industry-led ‘monitoring’ initiatives.
Transparency initiatives’ low level of effectiveness comes in part from problems in their design. The quality of social or ethical audits, for instance, varies widely because the companies commissioning them have discretion over their depth, stringency, and scope. Most audits furthermore focus on Tier 1 suppliers, those producers directly hired by the lead firm to produce their products. However, we know that forced labour thrives amongst workers employed by labour agencies and contractors rather than direct producers, amongst unauthorised subcontractors, and within the informal and illegal sector, ranging from home based work to illegal mining operations. These workers are rarely encompassed within the scope of social audits. Relatedly, audits are also generally focused on product supply chains, as opposed to labour supply chains. Thus they overlook the “often unregulated networks through which forced or trafficked workers may be recruited, transported, and supplied to business by third party agents”.
‘Good faith’ corporate initiatives have been further called into question by a number of recent high profile discoveries of labour exploitation in ‘ethically certified’ supply chains. The collapse of the Rana Plaza garment factory in Bangladesh in 2013 shortly after it passed an audit; the discovery of rampant worker abuse including murders by employers in the ‘ethically certified’ Thai fishing sector; and the discovery of child labour on coffee plantations certified as exploitation-free all raise questions about the faith placed in voluntary supply chain governance programmes.
These problems raise serious questions about the integrity of industry-led ‘monitoring’ initiatives. There is little solid evidence that they work to address forced labour, modern slavery, or trafficking in global supply chains, and a lot of evidence that they are flawed.
And the limits of ‘light-touch’ legislation
Recent high profile government initiatives – such as the California Transparency in Supply Chains Act (2010), the UK Modern Slavery Act (2015), and Australia’s proposed modern slavery in supply chains reporting requirement – also prioritise improving transparency over punishing violations. Dozens of such laws have been passed since 2009. Such laws require large companies to disclose what they are doing to prevent and address forced labour in supply chains, however under most jurisdictions there is no penalty for reporting that they are doing nothing. Most of this legislation is low in stringency. It increases reporting obligations but, crucially, does not establish extraterritorial liability, does not create binding public standards, and does not sanction non-compliance.
My colleague Andreas Rühmkorf and I recently published a study of the effectiveness of this legislation in the journal Global Policy. We looked at 25 major companies and studied whether and how their codes of conduct, supplier codes of conduct, terms and conditions for purchasing, and sustainability reporting evolved in the wake of the UK’s Modern Slavery Act. We found that very little substantive progress was made.
Building a better mousetrap
The approach that Alliance 8.7 takes to tackling forced labour and slavery in global supply chains should be informed by evidence about what works. At present, there is a distinct lack of evidence that soft law transparency legislation and voluntary industry efforts effectively reduce the worst forms of labour exploitation in the entirety of global supply chains. It remains an open question whether it would be better to re-start from scratch or to seriously work to improve existing initiatives. But either way, it’s important to understand that the primary obstacle to success with either option is not technical, but political.
One curious feature of many supply chain governance initiatives is that they often sideline and marginalise workers in their design and implementation, rather than empowering them to exert their rights and to police initiatives’ effectiveness. Furthermore, when workers are given a seat in multi-stakeholder initiatives they often report that their participation wasn’t allowed to be anything more than superficial.
When companies push for regulation there is a need to question their motivations.
This should be an enormous red flag. If the goal of these initiatives is to reduce forced labour and slavery, then workers are key assets in that struggle. Nobody has more reason to monitor and promote labour standards than they do, and they are best able to perform those functions when they are an organised and involved part of any initiative’s implementation. The ‘worker-driven social responsibility’ programmes now being led by groups like the Coalition of Immokalee Workers in the United States, for instance, are good examples of how workers can be meaningfully included in supply chain governance.
Another big red flag is the eagerness with which companies have embraced transparency legislation. A fundamental assumption of the political economy literature on business is that companies resist all regulation that impinges upon their operations. Yet companies have actually been pushing for transparency regulation.
In the UK, for instance, the government pulled the transparency in supply chains clause from a later version of the Modern Slavery Act, and it was actually an industry coalition that pressured the government to put it back in. Companies are not benevolent humanitarian organisations, so when they push for regulation there is a need to question their motivations. Is this particular type of legislation being promoted in order to head more stringent forms of legislation off at the pass? Such questions must be taken seriously if meaningful progress is to be made.
Finally, we need to think carefully and feel extremely skeptical about the disproportionate power of industry actors in the inception, design, and implementation of both public and private anti-slavery initiatives. Corporate power is standing in the way of tackling the root causes of labour exploitation in global supply chains. Although the reasons underlying business demand for forced labour vary across business type, sector, and industry, there are clear patterns of root causes that could be addressed. To do that, however, requires fundamental changes to the business models that have become dominant in the global retail economy. If Alliance 8.7 wants to do its job right that’s what it should be pushing for.