Ending forced labor and modern slavery in global supply chains requires binding legislation, rather than corporate self-regulation and self-disclosure. Yes or No?
Genevieve LeBaron and Joel Quirk
Garment & Allied Workers' Union
UN Special Rapporteur on Contemporary Forms of Slavery
Queen's School of Business
International Labour Organisation
Formerly of the Coca-Cola Company
The Freedom Fund
International Organisation for Migration
National Commission for the Eradication of Slave Labour
Leonardo Sakamoto an activist, journalist, researcher and Director of the NGO Repórter Brasil, YES.
The Brazilian case is a powerful story of how binding public disclosure legislation can eradicate forced labour in supply chains. Since the 1970s, civil society in Brazil has systematically denounced the existence of contemporary forms of slave labour. In 1995, after decades of pressure, the Brazilian government acknowledged before the United Nations the persistence of this type of exploitation on its territory. A public policy project based on labour inspections and involving the presence of police officers and public prosecutors was established to address ongoing abuses. These teams investigate complaints, free workers in exploitative situations, hold employers accountable for paying salaries and labour rights, and initiate legal actions for compensating employees or criminally punishing the people responsible for corporations involved in forced labour practices. Since then, over 50,000 workers have been rescued.
From 2003 to 2014, citizens and corporations who were caught benefiting from slave labour were entered in a public transparency database. This was established by a Ministry of Labour act, and was referred to as the ‘dirty list’. The corporations would remain on the list for two years, during which time they would be required to repay their debts to both workers and the state and refrain from recidivism. Unlike corporate social responsibility approaches, which typically involve self-disclosure and self-reporting, this database was established and enforced via governmental act.
In December 2014, the Supreme Court granted an injunction to an association of construction companies that suspended the dirty list initiative. Following this setback, civil society organisations used the Brazilian Freedom of Information Act to rebuild and relaunch the database in order to re-establish transparency regarding slavery cases. Several companies have used this new list for their risk management analysis or to avoid relationships with their counterparts who use slave labour.
After changes were made in the decree guiding the dirty list, the Supreme Court authorised its return in May 2016. However, the Ministry of Labour has yet to publish a new update.
In Brazil, when some publicly listed companies were added to the biannual dirty list report, their stocks suffered significant decreases in the market. This happened with major companies producing sugar and alcohol, as well as construction companies. Having limited access to credit, along with the negative impact suffered by the brand in the media, investors pressured the corporations to adopt policies to prevent the problem from happening again. We have cases of supply chains that have improved considerably as a result of this process.
Slave labour is not an anomaly, but must instead be regarded as instrument that serves competitiveness and profit.
Most companies have not engaged in this out of their own free will. Action only took place as a result of pressure from the press and civil society. Other legislative measures are also beginning to have promising effects, particularly in relation to the forfeiture of property and the annulment of corporate registration following conviction for using forced labour. In this regard, two important laws have been approved: one in São Paulo – the wealthiest state in the country – which banishes companies that benefit from slave labour for ten years. The other is a federal law that makes provision for forfeiture with no legal compensation of rural and urban properties where slave labour is found. Forfeited land can then be allocated to land reform or housing programs.
This mix of financial punishment and public disclosure has influenced investors to take seriously the risk of damage to the brands involved if labour abuses are publicly exposed. This is important, because consumer boycotts can only work in the short term or not at all. In many cases, corporate policies to combat slave labour are only adopted if there is a real risk of economic loss for an enterprise.
Independent audits, self-regulation and self-declaration do not ensure the same quality of monitoring and control in comparison to public labour inspectors and legislation that guarantees punishment for those who profit from this crime. This does not mean, however, that this will be an easy or straight-forward exercise. In a world of extreme poverty and plenty, some states have effectively become hostages to global economic forces or international and national companies, either through financing their governments or through controlling their economies.
However, we must remember that the issue of global supply chains does not start or finish in a single country. Accordingly, I welcome the push for creating a binding treaty which obliges companies to adopt minimal human rights criteria, including the eradication of contemporary forms of slavery. In June 2014, the UN Human Rights Council adopted Resolution 26/9, which established an open-ended Intergovernmental Working Group to discuss a legally binding instrument on business and human rights.
No policy concerning supply chains will succeed without action and investment from states or the international community. No policy concerning supply chains will succeed without the credible threat of punishment for those who are benefitting from contemporary forms of slavery. Slave labour is not an anomaly, but must instead be regarded as instrument that serves competitiveness and profit.
This text is based on a statement for the event, “Ending Contemporary Forms of Slavery in Supply Chains”, at the 30th Human Rights Council.