An important focus on forced labor and global supply chains is underway. While this is good news, recent pronouncements against forced labor indicate a long way to go to eradicate the egregious practice. To take one supply chain, cotton, the fabric of our lives, remains tainted with some of the most egregious forced-labor practices. Yet most companies still practice a policy of looking the other way.
This month the Consumer Goods Forum committed to “strive to eradicate forced labour from our value chains.” and “not to tolerate forced labour within our operations.” At the same meeting, the Vatican committed to “slavery-proofing its own supply chains.” The commitments are welcome. Companies have a responsibility for forced-labor free businesses and supply chains, and the Forum is a group of companies that report collectively employing 10 million people and annual sales of €2.5 trillion (~$2.7 trillion). And clearly there a moral case for dignity.
Yet the commitments against forced labor and human trafficking in 2016 should also give us pause. Forced labor is a crime, committed on a mind-blowing scale. The ILO estimates 21 million people are victims of forced labor, and that their work generates $150 billion in illegal profits.
We are now 85 years after governments, business and workers agreed that forced labor should be prohibited worldwide, and 5 years after government members of the OECD committed to proactively work to ensure companies headquartered in their countries “contribute to the elimination of all forms of forced or compulsory.”
Each and every forced-labor victim is contributing to a company. The sale of every cotton t-shirt depends on work in the cotton field, and at every other point in the company’s supply chain. The International Trade Union Confederation reported this month that leading apparel companies depend on the labor of tens of millions of hidden workers, for whom the companies do not take responsibility. In an assessment of company disclosure practices this month, As Know the Chain reported most companies disclose labor policies but not much about remediating abuses and incentivizing policy compliance.
In 2016 is it progress that companies state commitments to not directly commit this crime and to “strive” to ensure their business partners don’t commit it?
Looking more closely, the specifics of these latest commitments themselves expose two major weaknesses in corporate social responsibility (CSR), the approach to labor and environmental conditions by nearly all companies, not only members of the Consumer Goods Forum.
First, companies rely on audits to know what takes place in their operations and supply chains, and “Ultimately, the audit regime is ‘working’ for corporations, but failing workers and the planet. Labour abuses, poor working conditions and environmental degradation within global supply chains remain widespread,” as Sheffield Political Economy Research Institute’s Genevieve LeBaron and Jane Lister report. As the researchers report, the audit-based model of CSR lacks worker agency, incentives for management to improve, and accountability by the companies most benefiting from the certifications. The latest Know the Chain report echoes these observations, with findings that very few companies report incentivizing compliance, integrating audit findings into company practices, or remediating abuses identified.
Second, most companies restrict their attention to the tip of the iceberg and have not expanded oversight to the entire supply chain, on which their bottom line depends. For example, the vast majority of companies selling us cotton products do not inform consumers, shareholders, or anyone else where the cotton comes from, much less the conditions in which it was produced. Meanwhile, two of the top ten cotton producers, the governments of Uzbekistan and Turkmenistan, use state-orchestrated forced labor to produce it. Since 2008, over 200 apparel brands have helped put a spotlight on Uzbekistan’s practice by publicly pledging to avoid Uzbek cotton while forced labor persists. Yet most companies are not ensuring their t-shirts are free of Uzbek cotton. In case we could take that to assume a more systematic approach, most companies responded with surprise to notifications of forced labor in Turkmenistan, which exports the vast majority of its cotton to Turkey, an apparel-hub.
Furthermore, the risks are not news. In Empire of Cotton: A Global History, Sven Beckert reminded us of cotton’s centrality in the creation of the global economy and the persistence of exploitation throughout the history of cotton. In 2016, the history continues with the steady input of forced-labor cotton from Uzbekistan and Turkmenistan into global supply chains.
Perhaps this year is the year companies shift from stated commitments to actively knowing the source of their cotton and addressing labor violations in its production. That would be the basic business human rights due diligence of a company that relies on cotton. To be sure, moving companies in this direction also requires governments to enforce labor laws, including trade restrictions for labor violations, and consumers can of course support by purchasing clothing from companies that provide assurance of lawful practices from the cotton field to the retail shelf.