Week 3: Combating labour exploitation in supply chains
With the right political will we can reduce labour exploitation in global supply chains
It is now widely accepted that forced and precarious labour are common within global supply chains. According one study, "71% of companies believe there is a likelihood of modern slavery occurring at some stage in their supply chains". However, there continues to be heated debate regarding who should be held responsible when forced labour is found to have actually taken place. Existing regulations governing supply chains frequently suffer from a combination of legal loopholes and failures of enforcement. National laws rarely extend beyond national borders or citizens, creating ‘governance gaps’ between different legal systems. Corporations are only legally responsible for workers they employ directly, so any abuses that take place at the hands of companies to whom they have subcontracted fall outside their legal obligations. In addition, governments routinely fail to enforce their own labour laws without consequences.
The key question is therefore not whether or not there should be any regulation of supply chains. Supply chains are already regulated to some degree. Instead, the key challenge is to update and globalise worker protections for the 21st century. One of the most high profile responses to this challenge is corporate social responsibility (CSR), which has dominated the field for over two decades now. The main principles of CSR are self-disclosure and self-regulation. The basic idea is that responsible corporations – working hand in hand with responsible consumers – can play a transformative role in cleaning up (or keeping clean) their supply chains. Established regulations remain on the books, but are also argued to be supplemented via voluntary action by good corporate citizens. Thousands of different initiatives have recently been introduced to bolster labour and environmental standards in supply chains, covering products such as bananas, tea, cocoa, t-shirts, and computers. Some CSR initiatives are specific to individual corporations, such as Apple, Microsoft or Coca-Cola. Others take the form of industry coalitions, such as the International Cocoa Initiative and the Ethical Trading Initiative.
The most common application of CSR principles involves the publication of policies, principles, reports and stories relating to the treatment of supply chain workers. In some cases, these publications are little more than general statements of principle that outline the values to which corporations aspire, but contain little or no information on how these values will be realised in practice. Others contain detailed material on codes of conduct, internal audits, and budgets. A good example of the latter is Apple’s annual supplier responsibility reports. Despite these variations in practice, there is nonetheless a common strand linking together most CSR initiatives. As a general rule, they are voluntary, so there are no automatic or direct penalties for non-compliance or poor performance. Companies determine their own standards, policies and associations, and decide when and how much to disclose about their overall performance to the public.
In recent years, a coalition of workers, civil society groups, investors, trade unions, and some industry and government representatives have argued that the current model of CSR-based solutions isn’t working. They have argued that a fresh approach is necessary, where global supply chains are regulated by global laws. The basic idea is for established regulations to remain on the books, but to supplement current models via expanded regulation at the national and international levels to close down ‘governance gaps’. This means introducing a new regulatory framework with global reach that would legally curtail corporations’ ability to outsource liability for the working conditions associated with the production of the goods that they sell. In other words, holding corporations legally accountable for serious labour abuses across their entire supply chains. Much the same logic applies when it comes to improving pay and conditions for all workers.
View a transcript of Part 1
Welcome back everyone to week three of our course on forced and precarious labour in the global economy. Last week we looked at the problems associated with global supply chains. This week you're once again in the good hands of Neil, who is going to take you through some of the ways in which these problems might be addressed politically and strategically.
Thanks very much Joel. Yes indeed, last week we looked at the root causes of exploitation in global businesses and this week we are going to be looking at what we can do about it. Things like innovative forms of labour organising, increased labour protection, redistribution of land, of money and of the resources that people need to stay safe in the world of work. Welcome back.
View a transcript of Part 2
Welcome back everybody. Last week we spoke about the structural root causes of forced labour in supply chains. This week by contrast, we are going to examine some of the things that we can do to make supply chains fairer and to fight against exploitation. These ideas come from struggles taking place all over the world and together they can form a framework for making a fairer global economy.
The first and immediate starting point is to ensure better enforcement of labour standards. As we mentioned last week, governments worldwide are not protecting their workers in the way that workers need. We therefore need governments to make reforms which promote worker rights and which increase the size and the mandate of their labour inspectorate's to ensure that businesses are respecting the rules. This in turn requires shifting budgetary priorities – in other words taking more money from business and spending it on the enforcement of worker rights.
Other strategies with regards to workers’ rights include the creation of penalties for businesses that violate labour standards. A good example here is Brazil's dirty list, which shames companies found to have used forced labour. We can also think of targeted enforcement of standards in sectors where there is a high risk of exploitation, and we can think of support for collective action and the right to organise, for example via unions. There are also innovative, worker-led strategies that we can promote. These include, for example, involving worker centres or unions as monitors of labour standards, in partnership with the state and with business. The Coalition of Immokalee Workers in the United States, for example, is a farm work organisation which has pioneered this type of worker-led standards enforcement that can serve as a model for others. Its work is underpinned by a worker-drafted code of conduct agreed to by partner firms.
A second move is to redistribute value in global supply chains and to push for living wages. Major firms need to be encouraged to pay more to their suppliers, to keep less of the profits, and to share value more equitably. Activists and worker organisations can be supported to bargain with big businesses for a greater share of the value that they help to produce. One example here is the Asia Floor Wage Campaign. This regional research initiative seeks to establish a living wage for garment workers across Asia by bargaining across countries with the big brands who sit at the top of the clothing supply chains.
A third set of reforms are those which tackle poverty. Think of it like this, if being poor increases a person's vulnerability to forced and exploitative labour, then policies which reduce poverty will likely reduce the supply of people vulnerable to those kinds of labour. It is a no brainer. In practice this means massive redistribution, higher taxes on those who have wealth, closing tax loopholes, and ensuring that the have-nots receive more. This means increased social protection, stronger social safety nets, and more extensive public goods provision – for example, health care for all.
Another option for tackling poverty is unconditional basic income. Unconditional basic income is defined as a cash payment given regularly without means test or work requirement. It's like a wage that we all receive simply for being human beings. Ideally this could be rolled out at a global level, but it can also be rolled out at a national level. The key point though is to give everybody enough money to be able to resist the kinds of exploitative work that we saw last week, which takes place all across the world in global supply chains. Until recently UBI was thought of as a utopian or fanciful strategy, but it's recently started to be trialled by governments and authorities across the world. A recent trial run by the United Nations Children's Fund UNICEF in India found that basic income reduced forced labour. This is something that has to be built on when we're thinking of how to overcome the poverty that structures forced labour in supply chains.
A fourth strategy for improving workers’ rights in supply chains involves better immigration policies and pushing for more migrant rights. If unfair policies which target migrants facilitate the use of forced and exploitative labour, then it follows that the rules governing migrant workers’ work must play an important role in curtailing the supply of migrant workers who are vulnerable to forced labour. A simple example of a reform that would be useful here in the UK would be ensuring that migrants, like non-migrants, can access free health care or legal support. Another would be shifting the costs of bringing over a foreign worker onto the employer, rather than the foreign worker paying for themselves to come over. Abolishing tied visas would also be useful. Tied visas restrict a migrant’s work rights to employment with a single, specific employer. In cases where the employer is exploitative, the migrant ultimately faces a choice: do they leave the employer and protect themselves at the cost of getting deported, or do they accept the exploitation? Abolishing such visa schemes would be a massive step forward for migrant rights and for migrant workers’ conditions in supply chains.
Fifth, we showed last week that the lack of protective legislation at the global and national levels allows exploitation to take place. Employers and major corporations have been largely made responsible for checking on the working conditions in their supply chains. We know that this self-regulation doesn't work, so what we need is binding legislation.
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