Addressing forced labour in fragmented chains of production

Addressing forced labour in fragmented chains of production

Fabiola Mieres and Siobhan McGrath

University of Durham

30 April 2015

What are the prospects for protecting workers in global supply chains? From UN principles to business and worker efforts, the range of initiatives is impressive – but many remain seriously flawed.

We love buying exotic and low-priced food, cheap T-shirts, and eye-catching novelties. We love all these things that make us feel ‘special’. And as informed readers we might also have a sense of the long journey Uzbek or Brazilian cotton makes through China or India to become that precious T-shirt later resold in other parts of the world.  This dispersion and fragmentation of global production is celebrated as one of the key features of the global economy. Indeed, Cattaneo et al. describe it as constituting its backbone and central nervous system.

What are the consequences of this for forced labour in supply chains? In this piece we examine several different initiatives aimed at addressing forced labour within globally fragmented production. Our goal is to highlight examples of what may or may not work as we begin to tackle this problem. We briefly discuss the global template provided by the UN Guiding Principles on Business and Human Rights. We explore one corporate initiative in electronics, and we end with a grassroots action as an example of worker-driven responsibility.

UN guiding principles on business and human rights

While global corporations have been reaping the benefits of the fragmentation they have pursued, at the global level there has been some acknowledgment that there are human rights issues emerging from such fragmentation. Fragmentation in global production refers to the geographical slicing up of supply chains in search of low-cost suppliers offshore, which raises questions around where to locate the responsibility for human right abuses. This prompted the United Nations Commission on Human Rights to appoint John Ruggie, a professor at Harvard University, as the UN Secretary-General's Special Representative on business & human rights in 2005. Six years after Ruggie began his investigation, the Human Rights Council endorsed the ‘UN Guiding Principles on Business and Human Rights’, informally known as the ‘Ruggie Principles’.

These principles attempt to link multinational corporations to the human rights abuses in which they are implicated. In doing so, they resort to nation-states’ duty to ‘protect’ their citizens from human right abuses by third parties, including business enterprises. They call on companies to ‘respect’ those human rights, as well as recognise the need for greater access by victims to judicial and non-judicial remedies. As they stand, however, the guiding principles fall short of adequately addressing forced labour in fragmented supply chains. As ‘guidelines’, they constitute voluntary regulation that may require nothing more than updating fancy social responsibility websites (yes, more CSR).

Some nation-states have been pushing for these guidelines to become more substantive, taking the shape of a legally binding instrument on transnational corporations with respect to human rights. Led by Ecuador and South Africa, a resolution was adopted by the UN Human Rights Council in June 2014 to:

establish an open-ended intergovernmental working group on a legally binding instrument on transnational corporations and other business enterprises with respect to human rights, … to regulate the activities of transnational corporations and other business enterprises.

This was signed by Bolivia, Cuba and Venezuela. There were 20 further votes in favour, and unfortunately, a similar number against. The path towards a binding instrument therefore seems riddled with difficulties. Not only do conflicts between nation-states stand in the way of progress, but so do those powerful governments that host the largest transnational corporations.

In the meantime, consumers await the latest technological gadgets, à la mode trends and the availability of cheap foodstuffs in supermarkets. Production processes do not pause for nation-states’ negotiations. Retailers, not to mention armies of suppliers and subcontractors, keep business running as usual. Can workers who face abusive conditions afford to wait for countries to agree on the passing of an instrument? Even so, what space would forced labour have within the broader spectrum of human rights abuses?

There are no clear-cut answers to questions such as this, but a number of other organic initiatives around forced labour in supply chains are beginning to emerge. These responses have different, and at times competing, rationales but a preliminary look depicts a complex landscape.

Subcontracting in electronics

So is there any hope?  There are some rare but promising cases. Recently Apple announced that it will assume the responsibility of paying the fees that workers disburse to recruiters to begin employment. Fees paid to recruiters are a key element in bonded labour. Apple repaid more than USD 3.96 million to foreign contract workers for excessive recruitment fees charged by labor brokers. In 2014, nearly one in every three foreign workers (32% of the study sample) in the electronics industry in Malaysia was found in situations of forced labour. Findings showed that forced labour is linked to recruitment fee charging and the indebtedness that follows. Fully 92% of all foreign workers surveyed in the study paid recruitment fees in order to get their jobs. This prompted Hewlett Packard to launch the HP Foreign Migrant Worker Standard.

Developed in collaboration with Verité, the organisation that authored the report, the HP standard bans suppliers from outsourcing the migrant-worker employment relationship to third party labour intermediaries. The use of labour contractors is a key source of vulnerability for workers: migrant workers in particular are charged recruitment fees and their passports are routinely retained. Verité’s study states that 94% of foreign workers in the sample reported that their passports were held by the facility or their broker/agent.

Theoretically, the HP Standard eliminates the practice of charging fees and withholding of documents. We have yet to see how well this will be implemented or enforced. So far the HP Standard is framed within the supply chain responsibility programme that includes annual factory audits and risk-based assessments. Nevertheless, the HP Standard serves as a proof of concept that the end buyer can assume responsibility for upstream abuse, in this case the problems associated with labour subcontracting. Also, it shows that not all CSR initiatives are equal; some may be promising when they respond to grassroots pressures to address the fragmentation of production itself, rather than only the consequences.

Fair food programme

A more developed initiative from the fields of Florida in the US also offers signs of hope. Farmworkers in US agriculture have experienced harsh working conditions for decades. These have included situations of ’slavery’, in which individuals have been held against their will, threatened with violence, and forced to work for little or no money at all.

The Coalition of Immokalee Workers (CIW) has, since their early campaigns in 1993, pushed for a ‘worker-driven social responsibility’ paradigm that offers an alternative to ‘top down’ approaches of corporate social responsibility. The implementation of the Fair Food Programme (FFP) has been a milestone in the development of this paradigm.

Much can be learned from the FFP, but we would like to stress two salient aspects. First, workers play a central role as trained social auditors, reinforcing and filing complaints as they appear. Second, farm labour contractors have historically managed and provide the labour pools in different states of the US—with many instances of violation of rights. Growers participating in the programme, however, are required to directly hire and pay the workers engaged in harvesting, irrigation, planting and other non-supervisory roles. The fragmentation that occurs at the workplace through the presence of farm labour contractors disappears by bringing back growers into the picture as active partners in guaranteeing good working conditions.

To sum up, if fragmentation of production is the key feature of the global economy, then we need to pay further attention to the social foundations of this process. While the application of the Ruggie Principles are being discussed in the international arena, other actors are engaging with fragmentation in socially constructive ways. Banning labour subcontracting in supply chains, and worker-led models of social responsibility offer hope of more substantial remedies for the ills of the global economy. We hope to see more ahead.

Originally published in: Beyond Trafficking and Slavery, Open Democracy, 4 March 2015

The views expressed in this blog post do not necessarily express the views of the DemandAT project consortium as whole