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US State Department Leverages Blockchain Tech to Combat Forced Labor

Unethical work practices remain a core issue for many industries, however the U.S. State Department is looking to tap blockchain technology to combat forced labor worldwide.

According to Reuters, the State Department, Coca-Cola Co., technology company The Bitfury Group and blockchain specialist Emercoin are launching a project that will use blockchain’s digital ledger technology to develop a security registry for workers to combat forced labor issues. The State Department said this is the government agency’s first major project leveraging blockchain to fight forced labor, which demonstrates the technology’s potential for fortifying compliance in industry supply chains.

Blockchain Trust Accelerator (BTA), a non-profit organization involved in the project, told Reuters the group is working to develop a secure registry for workers and their contracts that leverages blockchain’s digital notary and validation capabilities. As a leading platform for harnessing blockchain technology to solve social impact issues, BTA will work with the project’s other partners on executing positive impact.

For its part, the State Department will provide labor protection expertise and enforce compliance among major industry players. Scott Busby, the State Department’s deputy assistant secretary, told Reuters that while blockchain cannot prompt companies to follow labor contracts, it could establish a credible chain of evidence that might urge them to comply with labor contracts.

The Bitfury Group will develop the project’s blockchain platform, while Emercoin will provide blockchain services as part of the project.

Beverage companies, including Coca-Cola, are also working to address the risk of forced labor in their supply chains. According to a 2017 study by KnowTheChain (KTC), a partnership established by philanthropic organization Humanity United, Coca-Cola, one of the 10 companies analyzed by KTC, pledged to conduct 28 country level studies on forced labor for its sugar supply chains by 2020. Coca-Cola is also working with the State Department on the project to improve working conditions on a global scale.

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“We are partnering with the pilot of this project to further increase transparency and efficiency of the verification process related to labor policies within our supply chain,” Brent Wilton, Coca-Cola’s global head of workplace rights, said in an email to Reuters.

The State Department’s project comes on the heels of other blockchain developments in the apparel sector, as more fashion companies seek to boost transparency and foster sustainability in their supply chains.

At SXSW, H&M’s transparency and Higg Index project manager Nina Shariati discussed how the company has mapped out most of its suppliers at the tier one and tier two levels. Even though H&M was credited to being one of the first fast fashion companies to tackle transparency, some companies haven’t followed suit. Shariati attributed two factors—public scrutiny and exposing business intelligence information—for the apparel industry’s lack of response to transparency issues.

China’s largest retailer, is also making moves to accelerate AI and blockchain R&D. recently introduced its Beijing-based AI Catapult accelerator, which will collaborate with emerging blockchain startups to pilot their technologies.