Study: Migrant Worker Abuse Bad for Business

Who gets to decide which workers are deserving of a truly living wage and who can get by on less?  Can multinational companies continue to turn a blind eye toward human rights abuses in their supply chains? Watchdog groups are highlighting a pervasive problem with migrant worker abuse that has largely gone unnoticed, despite its part in the global economy.  Business analysts increasingly see a lack of accountability about human rights as an industry risk.

In its Human Rights Outlook 2016 report, the Verisk Maplecroft firm identifies refugees and migrant workers forced into low-wage labor as a key risk to global businesses.  This is because a lack of transparency in the supply chain prevents top-level decision-makers from being accountable for what is happening on the local level. Some people who've needed safe passage out of their home countries ended up in a modern version of indentured servitude. Report authors assert that ignoring human rights as it applies to the supply chain threatens the reputation of companies doing business around the globe.

“The risks for business are amplified by increasing public scrutiny of unmapped tiers of the supply chain and benchmarking of company human rights performance,” states Dr Alexandra Channer, principal human rights analyst at Verisk Maplecroft. “Damage to hard-earned brand equity, consumer backlash and divestment by ethically-focused investors pose real threats to companies who are found to be knowingly or unknowingly complicit in abuses.”

The International Trade Union Federation also reports grim concerns about a so-called hidden workforce of people who are often exploited for extremely low wages in questionable working conditions.  The ITUC report lays out these key recommendations for companies to be more mindful of supply chains:

• Supply chain: Know whom you contract from and publish this


• Safe work: Inspect sites, fix hazards and recognize workers’ right to safety committees


• Secure work: End short- term contracts


• Minimum living wages: Pay wages on which people can live with dignity


• Collective bargaining: For wage share and decent wages and working conditions

Even the luxury industry is getting in touch with its up-and-coming customer base that is more likely to demand socially-conscious sourcing. TriplePundit previously reported this via Positive Luxury.  Consumers who can afford the very best luxury goods are expecting an inherent value in socially-conscious production.

Many of the guidelines available for global businesses to follow are completely voluntary, while some are woven into national or regional lawmaking. The United Nations offers some guiding principles on human rights, although these are not necessarily enforceable.  The U.K. Modern Slavery Act puts businesses on notice in the United Kingdom that they are responsible for transparency in their supply chains as it relates to human rights.  The Act specifically calls for business reporting that shows a mindfulness toward preventing the use of human trafficking and abuse by suppliers. In the United States, proposed new rules about the origin of seafood could potentially protect workers in the global fishing industry.

The Verisk Maplecroft report suggests that better education, more widespread human rights reporting and accountability by suppliers can help minimize the business risk of worker abuses.  ITUC is even more critical, asserting that entire business models for multinational corporations have been built on supply chains that systematically allowed exploitation and abuse of workers.  From low wages to poor working conditions to pollution of regions where a low-wage workforce lives, ITUC is calling out conditions that must be improved if businesses are to truly say they're operating within a socially responsible framework.

Organizations like Ethical Corp. with its Responsible Business Summit are aiming to provide solutions to companies that want to do business in a more socially-responsible fashion.  B Lab, the group behind B Corp certification, is another positive example of a leading social responsibility group that is helping companies be more mindful of their work forces and supply chains.

Social responsibility is no longer a novelty that an elite few businesses can afford to focus on. Per concerns about human rights issues such as what's happening with migrant workers halfway around the globe, socially-responsible supply chains are more often seen as a requirement for companies that want to succeed.

Image courtesy: Evan Bench via Creative Commons