In the subway tunnel under Grand Central Station in New York City, a new advertisement touts the ability of a business intelligence provider to use big data to help companies avoid the risk of slavery in their supply chains. The very existence of this first-ever anti-slavery ad by a big business highlights how forced labor, an issue that hovered at the edges of the anti-sweatshop movement for close to two decades, is now firmly in the mainstream.
The problem of modern slavery and forced labor is massive and systemic, touching every sector, industry and most consumer products. Given the breadth and depth of this problem, it is tough to measure progress at a global scale, but we can measure the efforts major companies are making to understand and address the problem in their extended supply chains.
Unfortunately, the results are disappointing. Outside of meaningful efforts by a handful of companies, very few have taken the most basic steps to understand forced labor in supply chains and address the risks they face.
A report released recently by KnowTheChain quantifies the massive gap between the attention to this issue demonstrated by a small number of leading apparel and footwear companies and the rest of the field. This follows on the heels of similar findings by KnowTheChain in the information, communications and technology, and the food and beverage sectors.
Companies can reduce their exposure and the risks facing the workers who make the products with the following actions, according to the report.
1. Eliminate recruitment fees
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The payment of job placement fees by migrant workers to recruitment agencies is widely recognized as the single biggest driver of vulnerability for workers. Workers take on debt to pay fees at high interest rates, and are then paid less than they were led to expect, leaving them in a condition of debt-bondage.
But KnowTheChain’s report on the apparel and footwear sector presents a picture of weak performance. Only six out of 20 companies surveyed prohibit recruitment fees, and only three ensure recruitment agencies in their supply chains are audited. Such prohibitions are the easiest and most obvious step that these firms could take.
2. Listen to the workers. One of the most effective mechanisms to ensure that workers aren’t exploited is to solicit their input directly. In the absence of effective collective bargaining, so-called “workers’ voice” approaches—including new efforts facilitated by mobile technology and high-quality worker-focused social audits—can put management in a position to understand the impact of its decisions on workers.
3. Trace their supplies
Corporations can only address the risk of forced labor if they understand the overlap between high-risk geographies and the location of their suppliers. This is particularly challenging when the company is buying raw materials, like all of the apparel and footwear companies surveyed in the report. While most companies surveyed have a process in place to trace their supply chains, visibility into the performance of individual suppliers and their agents or labor recruiters would be more beneficial, but requires deeper engagement than most companies undertake.
Brands and retailers have a long way to go before they can credibly claim to have understood and addressed the risks of forced labor in supply chains. But promisingly, entrepreneurs are creating new ways to illuminate and solve these widespread problems.
In the past two years, two ethical recruitment businesses were launched, anew unit of workforce solutions specialist FSI Worldwide and the Fair Hiring Initiative. Technologists are trying to identify cheaper, more efficient and more secure ways to trace products within supply chains. Start-ups are working to use mobile technology to gather information directly from workers and share it to inform how companies buy manufactured and commodity products. New toolkits from the U.S. government provide a step-by-step pathway to take companies from identifying the issue to resolving it. New risk maps from NGOs show companies where they should look for modern day slavery, meaning their social responsibility expenditure can be more efficient.
With all this momentum, there is no excuse for corporate performance to lag on these vital issues. Investors, consumers and competitors now also have the tools to hold companies accountable. Publicly disclosed benchmarks like KnowTheChain’s should drive company performance upward, illustrating that changes can be made and that companies can and should do better.
Dan Viederman is a managing director at Humanity United, focused on efforts to engage entrepreneurs and tech innovators in pursuit of new tools to scale improvements for vulnerable workers in global supply chains.