Forced labor is a massive global problem. It generates around $150 billion worth of illegal profits annually. And $34 billion of that is in sectors like manufacturing, construction, mining and utilities. An estimated 21 million people globally are victims of forced labor.
So, what are companies doing about the problem? KnowtheChain released its first report on the efforts of tech companies to mitigate forced labor in their supply chains. The report evaluates 20 global information and communications technology (ICT) companies, including Apple, HP and Microsoft, in seven categories: commitment and governance; traceability and risk assessment; purchasing practices; recruitment; worker voice; monitoring; and remedy.
KnowtheChain found both good and bad news. Eighteen of the 20 companies have a public commitment in place to address forced labor. Two companies had the highest score: HP with a score of 72 and Apple with 62. But the average score was only 39 out of a possible 100 — not exactly high marks. And three companies scored under 15 points: Canon, BOE Technology and Keyence.
“While we recognize that some companies are trying to meaningfully address the issue of forced labor in their supply chains, this report demonstrates that far more can and should be done,” said Ed Marcum, managing director of Humanity United, the foundation leading KnowTheChain, in a statement. “For investors and consumers, this report also shines a light on those lagging companies who are doing little to fulfill their ethical and legal obligations.”
Why start with the ICT industry? Workers that make the components in ICT companies’ supply chains are often migrant workers who are “particularly vulnerable to exploitation during the recruitment process and in their workplaces,” according to the report. A 2014 report by Verité found that almost a third of migrant workers in Malaysia’s electronics sectors are victims of forced labor. Migrant workers end up owing money to recruitment agents, find their passports seized, and are forced to work long hours for little pay until the debt is paid off. They are trapped in a nightmare.
Good and bad news
Commitment and governance had the highest average company score (64). This category evaluated both a company’s awareness of and commitment to addressing forced labor, supply chain standards, management processes, training programs and engagement with stakeholders. The high average score shows that companies have high levels of awareness about addressing forced labor in their supply chains. HP is one company cited as a notable example: It provides first-tier supplier training, but has also trained 422 of its sub-tier suppliers.
Even though commitment and governance is the highest scoring category, problems remain. Six companies (ASML, BOE, Canon, Keyence, Murata and SK Hynix) lack publicly-available codes of conduct requiring their suppliers to follow international standards that prohibit forced labor. KnowtheChain recommends that companies consult local non-governmental organizations (NGOs) and experts on forced labor risks. It also recommends that companies extend supplier training to high-risk suppliers.
Worker voice is the category with the lowest average company score (16). It is a one that “is critical to reducing instances of forced labor in supply chains,” the report states, so it is imperative that the ICT industry work to improve it.
Over half of the companies evaluated (11 out of 20) said they have a grievance mechanism in place that is available to suppliers’ workers. However, only four of them disclosed how the mechanism is “proactively communicated” to these workers. And not one of the companies gave examples of the steps they took to create an environment in which workers can organize when freedom of association is constrained. They also didn’t provide examples of engaging supply chain workers on their labor rights outside of the workplace. The report recommends that companies take steps to ensure that workers within their supply chains are able to organize.
Image credit: Flickr/Karlis Dambrans